- The Washington Times - Wednesday, June 7, 2000

Elected officials in Montgomery County, Md., risk losing credibility among taxpayers if they don't roll back a 20 percent income-tax increase imposed in 1992 to avoid deep budget cuts, council member Isiah Leggett said yesterday.

"If we don't honor that promise now, when can we?" Mr. Leggett, a Democrat, asked after introducing two tax-cut proposals.

One would cut Montgomery County's "piggyback" income-tax rate to 55 percent of what residents pay in Maryland income tax. It would be phased in over five years and would save an average Montgomery taxpayer, earning about $75,000 annually, $110 when fully implemented in 2005.

Another would set the county's earned income-tax credit for working-poor taxpayers at 12.5 percent more than matching the 10 percent credit Maryland has set and the county already has agreed to match. Doing so would return those Montgomery taxpayers about $44 more.

The additional across-the-board cut would cost the county $9 million in 2001 less than the nearly $10 million extra council members recently learned the county expects to collect that year.

County economists released the updated projections about a week after the council approved the budget last month.

The council must act on the proposal for the broad income-tax cut by July 1 the date when it must report the county's piggyback rate to Maryland's comptroller, who collects the tax.

Council members backing the cut who include Democrat Marilyn Praisner and Republican Nancy Dacek would have to persuade two more of the council's nine members to join them.

The council sets the income-tax rate, so it would not need the approval of County Executive Douglas M. Duncan, a Democrat, who has not advocated a further cut.

Montgomery County implemented a plan last year to reduce the income-tax rate from 60 percent, the highest rate allowed by state law, to 58 percent. That's estimated to save $50 on the average tax bill.

Mr. Leggett said it would be an "uphill battle" to pass broad new income-tax relief this year, but he said pushing the issue establishes a foundation for getting it done soon.

There's a better chance of passing an increase in the earned-income-tax credit for the working poor, he said.

Maryland and the county each are slated to increase the working-poor tax credit to 15 percent next year.

A public hearing on the proposal to increase the earned-income credit this year is scheduled for June 27, and the council is likely to act on it this summer, council staff said.

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