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  •   Md. Assembly Braces for Tax Battle

    By Daniel LeDuc and Robert E. Pierre
    Washington Post Staff Writers
    Thursday, January 14, 1999; Page B1

    The pomp, flowers and flowing speeches that marked yesterday's opening ceremony of Maryland's General Assembly created an aura of gentility that masked a hard question facing lawmakers during their 90-day session: In these times of plenty, do they dare vote to raise taxes?

    Some key lawmakers – most notably Senate President Thomas V. Mike Miller Jr. – say that with a surplus in the bank, this is no time to ask the taxpayers for more. But others – most notably House Speaker Casper R. Taylor Jr. – are saying the current good times may be an opportunity to raise the revenue necessary to catch up with looming road construction and mass transit needs.

    "The public perceives us as tripping over money," said Sen. Thomas McLain Middleton (D-Charles), who sits on both a special transportation committee and the Budget and Taxation Committee. "I realize the need; the public doesn't."

    Senate Budget and Taxation Committee Chairman Barbara A. Hoffman (D-Baltimore) said a tax increase would be difficult to sell. But, she added, "the public is pretty smart and understands when it's explained."

    Still, Hoffman and others may have to convince their own colleagues before they go to work on the public, and tax debates could dominate the coming months in Annapolis.

    "I don't like to talk of any type of tax increase as long as we have a surplus," said Miller, the powerful Prince George's County Democrat whose continued opposition could derail any increase. "From where I come from, you don't raise taxes unless the cupboard is bare."

    Despite the Senate president's recalcitrance, Gov. Parris N. Glendening (D) has joined Taylor (D-Allegany) in citing the need for a transportation revenue increase, and there is growing interest among some key legislators for raising the sales tax to provide it.

    The state is enjoying a budget surplus approaching $250 million. But with much of that money slated for school construction and other popular projects, legislators are struggling to find a way to make up a looming shortfall in money for road construction and mass transit.

    They are contemplating increases in the gas and sales taxes, the latter of which would be the first increase in 22 years. In addition, they will grapple with whether to raise cigarette taxes to discourage teen smoking and whether to speed up the phasing in of a 10 percent income tax cut.

    A committee of legislators, transportation officials and business leaders has determined that the special fund that pays for transportation is perilously close to running short of money.

    That panel says that about $200 million a year in additional transportation money is needed to keep pace with current and anticipated demands. The special fund draws its revenue from the state gas tax, motor vehicle fees and federal aid. Some of that federal aid may not be available if Maryland cannot come up with its own share of revenue.

    Maryland is one of the few states that subsidizes mass transit systems in two urban areas from a special fund. Traditionally, all transportation spending comes from that fund, so the surplus in the main state budget is not slated for helping those transportation needs – especially since the governor and legislators have other priorities, such as school construction projects, for that extra money.

    The gas tax, which was last raised in 1992 to 23.5 cents per gallon, provides the biggest chunk of transportation money. But there has been a long debate in Maryland about whether that money should also continue to subsidize mass transit in the Washington suburbs and Baltimore.

    Some legislators argue that there needs to be another funding source for mass transit, and they have advocated a sales tax increase from 5 percent to 5.5 or 6 percent as an alternative. Glendening's spokesman said yesterday that the governor prefers to use the gas tax and other transportation-related revenue for road construction and mass transit.

    Even with a sales tax increase, several lawmakers said that a rise in the gas tax would also be necessary but that it would take a lot of work convincing taxpayers.

    "I don't think it has any chance," Sen. Edward J. Kasemeyer (D-Howard) said of a sales tax increase. "That's not the way to go."

    "There's no groundswell of support for raising the gas tax," said Sen. Nancy Jacobs (R-Harford). "None of us campaigned on raising the sales tax or on raising the gas tax."

    That said, Del. William A. Bronrott (D-Montgomery), said that while new taxes are always tough, residents understand that services come with a price.

    "I wouldn't rule out a sales tax or a gas tax at this point," he said.

    © Copyright 1999 The Washington Post Company

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