The Maryland Senate Budget and Tax Committee voted today to cut at least $22 million from Gov. Harry Hughes' budget instead of raising taxes on cigarettes, wine, beer and liquor as the governor has proposed.
The 12-to-1 vote came during an informal meeting in committee Chairman Laurence Levitan's office that was called after several committee members told Levitan they would not vote for a budget that included tax increases.
Hughes has proposed raising $22 million by increasing the so-called "sin taxes" on cigarettes from 13 to 16 cents a pack, on liquor from $1.50 to $1.75 a gallon, on wine from 40 to 50 cents a gallon and on beer by 9 to 10.5 cents a gallon.
The vote, which directs the three budget and tax subcommittees to begin scouring the $6.4 billion budget for fiscal 1984 for cuts, sets up the possiblity of a major confrontation with Hughes and the House of Delegates, where leaders have said major cuts are not being considered.
Hughes said after hearing of the committee vote: "As has been said, this is a carefully crafted budget. I just don't think you can do that cut $22 million without hurting people. This is a very tight budget in very tough times."
House Speaker Benjamin L. Cardin, who has said that the House will not decide on either the tax measures or budget cuts until the first week in March, said today, "It is my feeling from talking to our chairmen and fiscal analysts that there are not $22 million in responsible cuts you can make in the general fund area." However, he added, "Until they identify specific cuts, I can't say whether it's acceptable."
According to Levitan (D-Montgomery), the committee "did not want to go to the 'sin taxes' and wants to use cuts to balance the budget instead. We're not trying to create a surplus. If we don't need to cut, we won't. There are other options we're looking at, like pension reform, increased revenue estimates, a new lottery."
Levitan said the committee will wait to vote on the Hughes tax package until after it has approved budget cuts.
At the meeting in Levitan's office, the commmittee was given a list prepared by the Department of Fiscal Services of possible cuts and money-saving efforts totaling $103 million that would affect all levels of state government. Some of the reductions were similar to those included by the governor in a list of "hostage" programs that could be cut if his tax package were not approved.
Among the possible reductions, all likely to be controversial, are: $16 million by freezing all step increases for state employes and faculty members at state schools, $3 million by increasing undergraduate tuition at the University of Maryland by $500 per student, nearly $2.5 million in health grants to local governments, $500,000 in reductions in the state's program aimed at drunk drivers, $250,000 in salaries for new law clerks at the courts of appeal and nearly $700,000 by delaying the opening of new veterans' facilities. The committee did not discuss specific cuts, leaving that up to the subcommittees during the next few weeks.
Committee members singled out three areas where cuts are likely: They asked the fiscal department to draft legislation to transfer or eliminate $6.3 million from the power plant siting program, indicated that nearly $9.7 million in Medicaid reimbursements seemed unnecessary and said the state should curtail travel costs and consider reducing mileage reimbursements.
"The point is that there is nothing sacrosanct in this budget, from the governor's office to the judges to the bureaucracy," said Sen. John C. Coolahan (D-Baltimore County), one of those who told Levitan that he will not vote for tax increases.
Said Sen. John J. Cade (R-Anne Arundel, who proposed the motion to cut instead of tax: "There's absolutely no need for new taxes right now. I believe $22 million in budget cuts can be made without cutting into human services. But at a time of depression or recession we shouldn't be levying new taxes, especially against people who can least afford them. And every one of these taxes is regressive, hitting poor people more than others."
Sen. Tommie Broadwater Jr. (D-Prince George's) was the sole committee member to vote against the decision to cut. "If we can find $22 million in legitimate cuts I'll support it. But mostly when we make wholesale cuts the poor and the minority community suffer. If you can make cuts that won't affect the communities in need, then let's do it."