ANNAPOLIS Retailers touted the success of last summer’s week of tax-free clothing shopping, but a key lawmaker expressed reservations yesterday about whether the reprieve could be extended because of this year’s tight budget.
In August, the state held its first tax-free week, a one-time offer intended to spur retail sales and encourage Marylanders to shop at home rather than going out of state to look for bargains. Neither Delaware nor Pennsylvania taxes clothing.
By offering the promotion in August, lawmakers hoped to reach families gearing up for the school year.
Bills introduced this year look to build on last year’s offer with a similar promotion this summer, or by making the tax-free week permanent.
Legislation sponsored by Sen. Edward Kasemeyer, Howard County Democrat, and Sen. Thomas Middleton, Charles County Democrat, would drop the sales tax on items of clothing and footwear costing less than $101 for the week of Aug. 16-22. Accessories would not be exempt from the tax.
Sales tax also would be dropped on school supplies which was not offered last summer.
“We view this as something that the public really responded to, and in this [economic] environment, we view it as a stimulus,” Mr. Kasemeyer told the Senate Budget and Taxation Committee.
Another bill offered by Sen. John Hafer, Allegany County Republican, would make the tax-free week an annual event.
But Sen. Barbara Hoffman, Baltimore Democrat and chairman of the committee, noted that the tax-free week would cost the state $9.4 million in revenues in fiscal 2003 at a time when the economic downturn has caused the state budget to tighten.
“My problem with this whole thing is it’s not a lot of savings to the customer, but it’s a pretty big hit to the state,” Mrs. Hoffman said.
Retailers said it did help them, and that was good for jobs and the state’s economy.
Thomas Saquella, president of the Maryland Retailers Association, said last year’s promotion was “quite frankly, even more successful than we anticipated.”
According to the MRA, retailers saw a 25 percent increase in sales during the tax-free week of Aug. 10-16, and a 10 percent increase for all of August.
Maryland was one of eight states plus the District that offered tax-free shopping days in 2001. This year, 13 more states are considering it.
Environmental groups are supporting legislation they say would reduce the reduce the risk of mercury contamination in Maryland.
The bill that was the subject of a hearing in Annapolis yesterday would require all items containing mercury to be labeled so consumers would be aware of the dangerous metal’s presence.
The bill also would require any item containing mercury to be recycled.
The Chesapeake Bay Foundation told the House Environmental Matters Committee that there were high levels of mercury in many places in the Chesapeake Bay and its tributaries. Mercury is toxic to humans, especially to young children.
Lawmakers yesterday honored former state Treasurer Richard Dixon, who resigned last month because of health problems related to diabetes.
In the Senate, Mr. Dixon was given the First Citizen Award in recognition to his service in government. Sen. Larry Haines, Carroll County Republican, called Mr. Dixon an “outstanding, honorable individual.”
Sen. Walter Baker, Cecil County Democrat, and Sen. Thomas Bromwell, Baltimore County Democrat, also received First Citizen Awards. Mr. Baker is chairman of the Senate Judicial Proceedings Committee, and Mr. Bromwell is chairman of the Finance Committee.
A proposal to increase Maryland’s cigarette tax by 70 cents a pack drew support from health care organizations at a hearing yesterday.
Supporters say it would discourage young people from smoking and encourage adults to give up the habit.
Members of the Senate Budget and Taxation Committee also were told that the bill would produce about $200 million in new tax revenues for the state at a time when lawmakers were struggling to balance the budget.
Opponents say the bill would impose an unfair tax on smokers, and they say they are not sure if a higher tax would help reduce smoking.
Maryland’s tax on a pack of cigarettes is currently 66 cents.