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Glendening Rejects Call To Cut State Property Tax

By Charles Babington
Washington Post Staff Writer
Wednesday, December 10, 1997; Page B01

Maryland Gov. Parris N. Glendening rejected calls for suspending the state property tax yesterday and signaled plans to steer most of the state's budget surplus of about $300 million toward schools, children's health insurance and a cushion against future economic downturns.

For the first time, Glendening (D) said he would support about $200 million for school construction next year, a 33 percent increase over this year's $150 million, according to legislative leaders who met privately with him yesterday. That would mark a victory for suburban counties such as Montgomery and Prince George's, which say they have major school construction needs.

Glendening also told legislators he supported about $50 million in annual new education spending for poor children, an issue that once threatened to divide the state politically but now seems largely resolved. State School Superintendent Nancy S. Grasmick has drafted one plan to divide the additional funds among Maryland's 24 jurisdictions, but the governor did not indicate how he plans to do that.

In previewing his new legislative agenda, Glendening also provided details of his plan to expand state spending on children's health care, an initiative the General Assembly rejected during its last session.

Aides said the governor supports spending about $30 million a year in state funds to help provide health insurance for those 17 and younger who live in families with incomes no more than double the federal poverty level. Many such youths do not now qualify for the state's Medicaid program. A new federal program would supply twice as much money per youth as the state would have to pay.

Yesterday's meeting with about two dozen legislators suggested that with a potentially tough reelection campaign looming next year, Glendening will for now emphasize education and children's health rather than possible new tax cuts. Aides cautioned that his plans could change before the General Assembly convenes Jan. 14.

The governor released two letters sharply criticizing a proposal that the state stop collecting a tax on real property that generates about $240 million a year. The proposal was from Harford County Executive Eileen H. Rehrmann, who is challenging Glendening for the 1998 Democratic nomination.

The letters attacking Rehrmann's plan were written by state Comptroller Louis L. Goldstein and Treasurer Richard N. Dixon. By seeking and then releasing the two letters, aides said, Glendening has essentially ruled out any support for the property tax cut plan. Goldstein and Dixon said such reduced revenue might force the state to pay more to borrow money for capital projects.

Glendening already portrays himself as a tax-cutter because he helped get enacted the 1997 law that will reduce income taxes by 10 percent over five years. Some aides and legislative observers say the governor now appears more inclined to use surplus money generated by higher-than-expected economic growth for new initiatives, rather than a new round of tax cuts.

"I don't think he's going to do a tax cut," said House of Delegates Majority Leader John A. Hurson (D-Montgomery). In the Democrat-controlled General Assembly, Hurson said, "I don't think there's a lot of enthusiasm for any tax cut."

However, House of Delegates Speaker Casper R. Taylor Jr. (D-Allegany) said he likes Rehrmann's idea of cutting the state property tax, which is set at a far lower rate than the part collected by county governments. "About 25 percent [of the state surplus] ought to go back to the people," Taylor said.

Taylor disputed parts of the letters from Goldstein and Dixon, noting that Rehrmann advocates keeping the property tax law in place but declining to collect the tax when economic times are good.

Glendening indicated to lawmakers that he plans to propose $54 million for state pay increases and $10 million for tuition credits for college students studying technology and related subjects. His spending plan would leave $50 million or more available for future problems or other initiatives. Glendening's staff says the state surplus will be about $250 million; legislative analysts say it will be $311 million.

© Copyright 1997 The Washington Post Company

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