Prince George's delegates last week voted to kill a bill sponsored by Del. Charles S. Blumenthal (D-Oxon Hill) that would have lowered county income tax rates substantially.
The county currently receives 50 percent of the income tax revenue the state collects in Prince George's. Blumenthal's proposal would have lowered this "piggyback" rate, which now is at the statewide maximum, by 5 percent of total revenues. In effect, this would lower the total tax that county residents would pay by 5 percent.
The purpose of the income tax proposal, Blumenthal said, was to attract more wealthy people to the county from places such as Montgomery, where the income tax rate is 50 percent. At the same time, Blumenthal said, the lower rate would discourage well-to-do county residents from seeking shelter in neighboring Charles and Calvert counties, which already have lower rates.
Blumenthal said county revenues probably would have increased despite the lower rate. He told delegates that the $12 million extra the county expects to receive from the state next year, the unexpected $1.5 million in impact aid for schools, and revenue generated from other tax bills now before the Maryland General Assembly make 1982 a good year to lower the county income tax rate.
If lower tax rates did not attract wealthier residents, Blumenthal said, the county could lose no more than $9 million, and delegates could restore the higher tax rate next year.
"It still didn't sway them," Blumenthal said after the vote. "I think there were only six (delegates) for it." Two of the bill's cosponsors voted against it.
While Prince George's delegates defeated Blumenthal's proposal, the Montgomery County delegation killed a similar bill Del. Robin Ficker (R-Potomac) had filed in retaliation. Ficker calculated that his bill would save Montgomery taxpayers $15 million a year, and would "ensure that Prince George's will not be at a competitive edge."