Maryland's state surplus has soared above $300 million, but none of the anticipated windfall will result in direct tax relief, state officials said yesterday.
The latest surplus figure -- the second highest in state history -- added impetus to a legislative move to pass pending limits for future budgets and return some of the surplus to taxpayers.
This year, however, most of the budgetary excess arising from unexpectedly high state lottery, income tax and sales tax returns has been earmarked for next year's spending programs, according to Gov. Harry Hughes.
"The worst thing you can ever have is a surplus," said Sen. Frederick Malkus (D-Eastern Shore), one of a long time of witnesses touting the spending limit proposals today before a joint Senate-House of Delegates committee hearing here. "When you've got it, you spend it."
The proposals to limit state spending have been trotted before the legislature in past years, but never with any success. This year, though, they have the backing of a broadbased legislative committee and are championed by the Maryland Taxpayers Coalition, a citizen group headed by a prominent state business leader.
The popularity of such proposals was evidenced by the standing-room-only turnout at the committee hearing today.
"If those people in the audience really put the pressure on, it could go through [the General Assembly]," said state Budget Secretary Thomas Schmidt, who testified against the proposals. "There's a lot of sentiment there."
The spending limit proposals, however, have plenty of powreful opponents including Baltimore Mayor William Donald Schaefer, the Maryland Association of Counties and the Hughes administration, represented by Schmidt.
The budget secretary told the committee today that cutting programs, rather than placing spending limits on the state, is the "answer to our problems."
House Speaker Benjamin L. Cardin also said last week that he has "grave reservations" about the spending limit approach, which he fears would lessen aid to cities and counties.
The House and Senate leadership are expected to take a position on the complicated package of spending limit bills later this week, and that action could determine their success or failure in this General Assembly session.
Even if the measures -- amendments to the state constitution -- pass the legislature, they would still need approval by the state's voters at a referdum to go into effect.
The key proposal in the package of bills would limit the growth of the state budget to the percentage growth in the total personal income in the state -- the combined incomes of all the state's taxpayers. That number is the "fairest gauge of a person's ability to pay taxes, whether income taxes, property taxes or sales taxes," according to Sen. Francis X. Kelly (D-Baltimore County), one of the proposals staunchest backers.
Another part of the package would force the state to return a portion of its surplus to taxpayers, under certain circumstances. Had the proposal been in effect this year, for instance, the average income taxpayer would have received a credit of approximately $25 on his tax return, according to a state budget analyst.
The state's giant surplus this year allowed the administration to fund several new programs without raising taxes, including:
$90 million for transportation needs including money for Washington and Baltimore transit systems and funds to build and improve roads in rural areas of the state.
$65 million for increased aid to local school districts.
$2.7 million to help Baltimore city increase the salaries of its police officers next year.
Today's revenue estimate, made by the state's top fiscal officials, gave the governor $9 million more to spend in the 1980-81 budget. But Hughes said he already has received more than $100 million in requests to fund various programs.
He said he is "not optimistic" about applying the extra funds to a tax relief program, which he had hoped to propose when he had received even higher surplus projections two weeks ago.