- The Washington Times - Tuesday, March 18, 2003

ANNAPOLIS The decision by Maryland Gov. Robert L. Ehrlich Jr. to include a 5 cents property-tax increase in his budget has provoked sharp criticism from within his Republican Party and from special interest and conservative groups that say the governor broke a campaign pledge.
Republican leaders called the proposed increase a "brutal" tax hit for families. Advocates for seniors said older residents would be disproportionately hurt. And one of the state's foremost taxpayer advocacy groups said the governor was "taking the easy way out" of a budget crunch.
Critics noted that Mr. Ehrlich became Maryland's first Republican governor in 34 years because he promised to reduce government and make it more efficient, not raise taxes.
"We need a more streamlined, efficient government," said Dee Hodges, president of the Maryland Taxpayers Association. "If we have to extend the [General Assembly] session, let's do it. Maryland has to stop and take a look at [cutting] excessive, worthless programs and not put the tough choices on the taxpayers."
Shareese DeLeaver, an Ehrlich spokeswoman, said the administration had already cut $518 million in spending and more cuts were on the way. However, other measures were deemed necessary.
"Given the severity of our budget woes, it is a small price to pay," she said.
Mr. Ehrlich said taxes on income, sales, gasoline, alcohol and tobacco are no longer part of a budget negotiations.
He also said the only increase he would consider besides those in property taxes is increasing filing fees for corporations or removing some of their tax advantages.
The House Ways and Means Committee will decide today on sending a tax package to a floor vote. The bill includes more than $200 million in corporate taxes, such as repealing exemptions for the health maintenance organization premium tax and corporate-transfer taxes and increasing corporate filing fees.
The governor's plan to increase real property tax from 8 cents to 13 cents per $100 assessed value a roughly 63 percent increase would boost the tax bill on a $185,000 home by about $93.
"That's really a brutal tax to put onto someone," said Delegate Jean B. Cryor, Montgomery Republican. "It hits hard."
Miss Cryor said she supports Mr. Ehrlich and that he was forced to accept the tax increase as part of a budget compromise.
AARP Maryland, an advocacy group for Marylanders age 50 and over, favors a combination of income, sales and property taxes when the state needs more revenue.
Property tax is the most regressive tax of those three because the tax continues to increase as people age and their income is either stagnant or is going down," said Frank Bailey, the AARP Maryland director.
The Maryland Association of Realtors is not expected to support the increase because it could compound rising assessments and anticipated property tax-rate increases in Maryland counties and cities also facing budget shortfalls, said Bill Castelli, the group's vice president of government affairs.
Mr. Ehrlich agreed to the property-tax compromise to help bridge a $2 billion budget gap and keep alive his bid to legalize slot-machine gambling at horse tracks.
The proposed increase will generate about $165 million more in taxes to pay off the budget deficit. The state has not increased property taxes for 22 years.
A property-tax increase is attractive to lawmakers because they don't have to vote on it. The rate is set by the Board of Public Works made up of the governor, comptroller and treasurer.
Among Republican lawmakers in Annapolis, the harshest criticism of Mr. Ehrlich has come from freshman legislators.
"All I heard from the very beginning was, 'No new taxes,'" said Delegate LeRoy E. Myers, Western Maryland Republican. "I think [property tax] falls into that category."

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