Three years ago, Baltimore Mayor William Donald Schaefer unsuccessfully joined forces with Prince George's County Executive Parris Glendening to propose an income tax increase designed to raise $289 million a year, most of it for local education.
But this year, when Attorney General Stephen H. Sachs proposed increasing funding for local education through a penny increase in the sales tax rate, the mayor, who is facing Sachs in the Democratic gubernatorial primary, was adamantly opposed. Schaefer insisted that the state had the money it needs to aid education, but just needed to shift it around.
One such shift, the mayor said in a recent interview, would be to consider funneling an estimated $23 million in revenue from the state's popular Lotto instant lottery game to local jurisdictions. That distribution system was used during the game's first year.
Schaefer denied that there was a conflict between his positions now and in 1983. The money would have been there without taxes in 1983 or any other year, he suggested, if Gov. Harry Hughes had been willing to provide it.
"I have been talking about financial difficulties of cities for years," he said. "I took that to Harry Hughes time after time and he wasn't interested because he never understood poor people, the number of poor in the city of Baltimore."
In his past efforts -- including the income tax proposal that would have hit affluent taxpayers hardest and his support of a lawsuit by the city against the state to get areas such as Montgomery County to provide more local education funds to Baltimore -- Schaefer has angered representatives of wealthy jurisdictions. He has argued that they should be willing to assume part of the tax burden of supporting Baltimore, a city that is cash poor despite having the highest property tax rate in the state.
Although now Schaefer continues to argue that a strong Baltimore means a strong Maryland, he has distanced himself from controversial proposals that would clearly benefit the city but potentially harm other jurisdictions' budgets.
As an example, he applauded a report last week by the Regional Planning Council, an independent agency that monitors transportation, housing and recreation needs for Baltimore and five neighboring counties. The council said that Baltimore needs increased state support to meet the demands on its budget, a position reminiscent of past statements by Schaefer.
But, as the newly cautious gubernatorial candidate, Schaefer stopped well short of endorsing a new tax distribution plan suggested in the report that would, in part, restructure the way the state reimburses local jurisdictions for the local taxes collected on individuals' state tax bill. Various guidelines suggested by the commission would redistribute the money based on wealth or even provide tax relief to Baltimore residents who pay disproportionately high tax bills.
The report, Schaefer said last week, is "idealistic, but it's not realistic."
A better way of creating new revenues for localities than either Sachs' tax proposal or the council's recommendations, Schaefer said, is his Lotto idea. "In certain areas there could be a formula developed where some money could go to areas of need and we wouldn't be taking money from any subdivisions," he said.
The proposal avoids the controversial issue of redistributing wealth because a majority of the funds raised in Lotto are from sales in Baltimore and Prince George's County.
Some political observers say the mayor is being shrewd in a political year by avoiding talk of taxes. "Schaefer could come out with any plan he wanted as long as he was mayor of Baltimore and not running for anything else," said state Sen. John C. Coolahan (D-Baltimore County), a veteran critic of Schaefer's fiscal strategies.
Others, such as state Senate President Melvin A. Steinberg (D-Baltimore County), say that both candidates have missed the mark. By doling out Lotto money, he said, "you're diluting the third largest source of revenue for the state" after income and sales taxes.
But a penny on the sales tax, he added, "is a terrible fiscal policy to follow. You can't start a policy that will develop a special source of revenue for a single problem."
Sachs, who has been traveling the state and buying broadcast time to sell his sales tax proposal, is critical of the Lotto idea.
"He is proposing a substantial change in funding that results in a shortfall to the state," Sachs said.
Sachs said that more accountability as well as new revenues are needed. "If [Schaefer] says there is enough money for education and [enough] to make up for the shortfall that would be created by the Lotto decrease, I'm glad he's not doing my household budget," said Sachs.