Interest rates, financing state transportation trust funds and new business taxes will consume much of the time of the Virginia and Maryland state legislatures, which begin new sessions Wednesday.
In addition, the legislatures will begin asessing the damage to state programs caused by the Reagan administration's federal budget cuts, which could mean increases in taxes.
An added attraction in Virginia will be the presence of governor-elect Charles S. Robb and the presentation of the budget by outgoing Gov. John N. Dalton. Many legislators there are waiting for the new administration before proposing legislation. The Virginia Division of Industrial Development isn't advancing any legislation until Robb is inaugurated, a division spokesman said.
Robb, however, hasn't yet formulated his own legislative package and hasn't yet determined what changes he would like to make in the budget once he takes office, according to his press secretary, George Stoddart.
In an interview late last year, however, Robb said he would "work vigorously against any alteration in the present character of the right-to-work law." He also said he would try to reduce regulations considered burdensome to business and promote coal production and exports.
Robb has rejected tax incentives for business as "giveaways" and "other ill-conceived schemes designed to benefit one taxpaying class at the expense of another." The idea of enterprise zones, which offer special business incentives in depressed economic areas, should be studied, Robb said.
Robb also said he would like to see a one-stop licensing and information service for small business.
Transportation is expected to be a major issue facing the legislature. A motor vehicle fuels tax based on a percentage of sales rather than a fixed cents per gallon rate is the subject of numerous proposals before the Virginia legislature, a Virginia Chamber of Commerce spokeswoman said. The tax would be used for the state's transportation trust fund to build and repair highways and other modes of transportation, the spokeswoman said.
Virginia bankers and retail merchants will seek the removal of the 18 percent finance charge ceiling for credit cards. Proposals already have been made to raise the ceiling to 21 percent and to lift it entirely.
Last year the credit card issue created a stir in the legislature, but it finally failed in the House Committee on Corporations, Insurance and Banking. Soon afterward several banks began charging their credit card customers fees, which are not regulated by state law, to make up for the high costs they were forced to pay for their money.
An effort will also be made to repeal the sales tax on food and prescription drugs. Such legislation was killed last year in the senate, Priddy said. If the tax is repealed, it would cost the state about 1 percent of its overall revenue, Priddy said.
Another familiar bill to be presented this year would establish a deposit for non-returnable bottles and cans in an effort to curb the growth of litter and to recycle resources. Such legislation has also been killed in the past.
Other proposed bills would determine sites for and ways of handling hazardous wastes within the state and place a mandated spending limit on the state budget to control the growth of state government, according to the Virginia Chamber of Commerce. The state may attempt to place a 4 percent sales tax on newspaper advertising inserts and legislation may be proposed to prevent that, Priddy said.
In Maryland, legislature-watchers also expect a brouhaha over the state's transportation fund. Gov. Harry Hughes has said he will submit proposals for a 4 percent tax on motor fuels at the wholesale level, and that is sure to stir controversy this session, according to spokesmen for the Maryland State Chamber of Commerce.
The transportation fund, which provides money for highways, ports, airports, mass transit, railroads and other modes of transportation, is shrinking. The bulk of the fund's money comes from a 9 cent-per-gallon fuels tax. However, fuel consumption has dropped recently and so has money in the trust fund.
In addition, inflation has increased the cost of highway and other projects so many legislators and the governor are pushing for a percentage tax linked to inflation, chamber spokesmen said.
One possibly controversial tax bill would adopt a unitary tax system on petroleum companies in the state, said Ernie Honig Kent, a chamber lobbyist. That bill would force petroleum companies in the state with divisions or subsidiaries located elsewhere to be taxed by the state on profits made in those other divisions.
Currently, Maryland taxes are based on the number of employes, sales and property owned by a company within the state. Only profits of the portion of the business within the state's boundaries are taxed, Kent said.
Although the draft legislation only targets petroleum companies, Kent said, it could later set a precedent and be used to tax other types of firms. Kent said such a tax, while increasing revenues to the state, would have a chilling effect on economic development.
There is also an effort to repeal the state's new auto emission inspection program, which is scheduled to go into effect next year, Kent said. Some factions feel the legislation is burdensome while others feel if auto emissions aren't curbed to comply with the federal clean air regulations, pollution from factories will be forced to carry more of the burden of cleaning the air, Kent said.
Credit and interest rates are always an issue during the sessions. Some proposals would eliminate all interest rate ceilings on credit and others would place higher limits on interest rates.
Organized labor is expected to push for changes in calculating unemployment insurance, basing it on a percentage of the average weekly wage rather than the current flat rate, said chamber lobbyist Samuel Christine. Labor interests are also seeking to increase the tax rate on employers to get more money in the state unemployment insurance fund, Christine said.
Legislation has been filed to eliminate the state's three-member medical board, which determines occupational disease workmen's compensation cases. Labor organizations for years have attempted to eliminate the board, which it claims is pro-business. Instead, the labor groups want to have the workmen's compensation commissioners who hear accidental injury cases decide the occupational disease matters, Christine said.