- The Washington Times - Wednesday, March 26, 2003

ANNAPOLIS A Senate committee has proposed an alternative to the proposed business tax increases in a bill that has passed the full House, offering instead a mix of revenue proposals to help cut a $2 billion budget deficit.
The House bill, sponsored by Delegate Sheila E. Hixson, Montgomery Democrat, would bring in more than $200 million in additional taxes from businesses. The plan includes business owners paying an annual filing fee from $750 for businesses with 21 to 49 employees to $20,000 for those with more than 500 employees.
This week, the Senate Budget and Taxation Committee proposed reducing the increases and instead increasing state revenue through such measures as taxing chewing tobacco and other nonsmoking tobacco products to raise $16 million.
Under the revised Senate bill, businesses will pay a flat $250 fee that would raise $47.1 million and pay a one-time 10 percent surcharge on corporate income tax that would raise $33.4 million.
Sen. Ulysses Currie, Prince George's Democrat and chairman of the Budget and Taxation Committee, said a sharp increase in corporate filing fees could have a terrible effect on small-business owners.
"We know it is difficult and we tried to scale them back realizing what it poses," he said. "We think it was kind of fair."
Yesterday, a number of Republican delegates gathered outside the State House with small-business owners and taxpayer groups to protest the House bill, which also includes a 2 percent health care tax on health maintenance organizations.
House Minority Leader Alfred W. Redmer said the increases in filing fees would have a "lingering impact" on Maryland's economy.
Delegate Herbert McMillan, Anne Arundel Republican, said, "Money going to the tax man means fewer jobs and less pay for workers."
The lawmakers held out budget cuts and the governor's proposal to legalize slot machines at four racetracks in Maryland as a means to solving the deficit.
"We have to take this riding crop to the Senate and pound it on the senators' heads," said Delegate James E. Rzepkowski, Anne Arundel Republican. "The people we are trying to protect cannot be victims."
Gov. Robert L. Ehrlich Jr. said yesterday he would be willing to work with the General Assembly on raising corporate filing fees, saying it was an issue with "room to negotiate."
However, the governor has said he will veto most other tax increases.
Small-business owners said their companies and their employees' jobs would be jeopardized if the House bill became law.
P.C. Price, a former Baltimore police officer, said he has worked 20 years to build up his small business.
"Some of my employees are former drug users who have been rehabilitated," he said. "I have many single moms working for me. If the state passes this tax, we will all be forced out of work. In the end, people who are doing illegal things are going to win."
Kathleen Snyder, president of the Maryland Chamber of Commerce, said the increases would cause several companies to leave Maryland.
"They may decide this is too much, sell their business or move sales offices out of Maryland," she said. "This is very bad economic policy."
She said the group supports the Senate proposal, including the 10 percent corporate income tax surcharge.
Meanwhile, a bill reducing sentences for those found in possession of marijuana for health reasons advanced yesterday in the state Senate. A bill that would allow the installation of speed cameras to ticket violators driving 10 miles above the posted limit also advanced.
The two bills could come for a vote as early as today.
The bill on speed cameras allows for maximum fines of $100 for racing through neighborhoods or school zones.
The marijuana bill would allow people found in possession of small amounts to get a $100 fine and no jail sentence if they can prove they have a medical condition that can be helped by smoking marijuana.
Mr. Ehrlich has said he supports medical marijuana but has not taken a position on the bill. However, he has expressed opposition in the past to speed and red-light cameras.

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