- The Washington Times - Sunday, March 10, 2002

ANNAPOLIS, Md. (AP) A State Senate committee yesterday rejected Gov. Parris Glendening's plan to delay a 2 percent Maryland state income tax cut. Mr. Glendening hoped a delay in the tax cut would help balance the budget.
The vote came as the Budget and Taxation Committee approved hundreds of millions of dollars in spending cuts to make sure the $22 billion budget for next year winds up in the black.
The 2 percent income tax reduction, which took effect Jan. 1, is the final step in a 10 percent tax cut the legislature passed in 1997.
Delaying it for 18 months would cost taxpayers about $170 million.
Sen. Barbara Hoffman, Baltimore Democrat and chairwoman of the committee, said the General Assembly made a promise to taxpayers in 1997 and should honor that promise, even though lawmakers are struggling to curtail spending until June 30, 2003, by more than $1.2 billion.
"The point is this [tax] is in effect today," Mrs. Hoffman said.
She noted that withholding tables were adjusted at the beginning of the year to reflect the tax cut and that less money is being withheld from paychecks.
"You would have to go back to the people and take money away from them," Mrs. Hoffman said.
The vote was unanimous on the 13-member committee, but some senators voted reluctantly because they said the state needs the money to maintain funding for education, health and other programs that directly affect Marylanders.
Sen. Nathaniel McFadden, Baltimore Democrat, said he is aware of the political problems some lawmakers could face running for re-election in November if they voted to postpone the tax cut.
When the General Assembly approved the tax cut in 1997, the legislature voted to phase it in over five years with the final 2 percent this year.
By rejecting the governor's plan, the Senate committee made its difficult job of balancing the budget even more difficult. Tax revenues have virtually stopped growing as a result of the economic downturn.
To keep the current budget balanced and prevent the 2003 budget, whose fiscal year begins July 1, from falling into the red, the legislature is dipping into cash reserves and is either freezing funding for many programs at the current level or cutting back the growth rate in spending.
Senate and House budget committees also plan to divert millions of dollars from land preservation funds into other programs.
As they insist that the income tax cut take effect as scheduled, committees in both houses are considering an increase in the cigarette tax to bring in money that could be used for education and health programs.


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