Prince George's Del. Gerard Devlin, seeking to funnel more money to local governments facing the prospect of losing federal dollars, has introduced a bill to create a new revenue-sharing program for the state's counties, cities and towns.
Under his bill, local governments would forgo their portions of seven state-imposed revenue sources and taxes, on items such as cigarettes, beer and distilled spirits, in exchange for a grant tied to a percentage of the state's sales tax. Unlike those so-called "nuisance taxes," which have performed erratically in recent years, the sales tax is expected to raise more money while the state's economy remains strong. The sales tax is expected to generate more than $1 billion dollars this fiscal year.
Devlin, a Democrat, also said he hoped to protect the financial stability of local governments that could lose their federal revenue sharing dollars under the budget proposed by President Reagan.
Although Gov. Harry Hughes has refused in the past to consider proposals to share the sales tax with local governments, Devlin said his bill is both moderately affordable and "something the governor has expressed an interest in."
Hughes' aide Benjamin Bialek took a dim view of the proposal. "My reaction is that at this point in the year it's unlikely that there will be any change in state-local fiscal relationships except as provided in the governor's budget," he said.
Devlin's bill is similar to a proposal introduced by the Baltimore City delegation earlier this year, except the city's bill would give counties and municipalities an amount equal to 10 percent of sales tax receipts each year, while Devlin's bill would distribute an amount equal to 3.5 percent.
Both bills would distribute the money to give more to less affluent jursidictions, unlike the current system, which distributes the money based on a variety of factors.