- The Washington Times - Friday, March 26, 2004

ANNAPOLIS — House lawmakers approved a $670 million tax package last night, despite a promise from Gov. Robert L. Ehrlich Jr. that he will not support tax increases.

Mr. Ehrlich, a Republican, said after the vote that he doubted the House tax package would pass the Senate and that he nevertheless would veto it.

“I don’t think [Senate approval] is going to happen,” he said.

Mr. Ehrlich said House Speaker Michael E. Busch and other House leaders “obviously fell far short” of the support they wanted and that they had to “twist arms and break knuckles” just to get 75 votes.

Senate leaders said Maryland is already one the country’s most expensive states and increasing the sales tax along with increasing fees on income, vehicles and some foods could force an exodus.

“I am concerned about increasing any taxation,” said Senate Majority Leader Nathaniel J. McFadden, Baltimore Democrat. “We are trying to get the middle class to come back into the city, not drive them away.”

Sen. Ulysses Currie, Prince George’s County Democrat and Budget and Taxation Committee chairman, said it was unlikely that senators would agree to such widespread increases.

“It is going to be difficult for the Senate to agree with the House version,” he said.

House lawmakers voted 75-65. The House’s 43 Republicans were joined by 22 Democrats in voting against the taxes. One Democratic delegate did not vote.

Democrats were led by Mr. Busch, of Anne Arundel County, who wants to increase sales and motor-vehicle titling taxes from 5 percent to 6 percent and to increase the income tax on the state’s highest wage earners from 4.75 percent to 6 percent.

Mr. Busch agrees with the administration that its fiscal 2005 budget is balanced, but said he and other lawmakers are concerned about future budgets.

House Minority Whip Anthony J. O’Donnell, Calvert and St. Mary’s counties Republican, said the taxes are unnecessary.

“This is a lot more than a couple of lattes,” he said last night during the floor debate that lasted about an hour. “This is a huge tax increase.”

Mr. O’Donnell has predicted that the vote will lead to the party’s demise.

“Unfortunately, I think the speaker’s action in this area is going to politically cost some people their seats,” Mr. O’Donnell said.

Mr. Busch said he is not worried about losing House seats to Republicans because of yesterday’s vote.

“I think the [lawmakers] can defend this vote.” he said. House Majority Leader Kumar P. Barve, Montgomery Democrat, agreed, saying the tax increase is no different from the governor’s proposals to raise transportation fees and impose a sewer fee surcharge.

David F. Roose, of the state Comptroller’s Office, said wage earners making $225,000 would pay as much as $300 more in taxes and families making $1 million would pay $10,000 more.

The state is facing a nearly $1 billion shortfall left by former Gov. Parris N. Glendening, a Democrat, and is searching for a way to fund the $1.3 billion needed for the Thornton Education Act, which attempts to decrease the disparities between rich and poor public school systems.

The full budget likely will pass today in the House, then go to a House and Senate conference committee, then back to the General Assembly for final approval. There are 17 days left in the session.

The Senate has already passed Mr. Ehrlich’s budget but with some changes, including a tax on salted snacks. A House committee killed that tax proposal.

Senate President Thomas V. Mike Miller Jr., Prince George’s County Democrat, said he does not think the Senate will approve such a major tax package.

House Democratic leaders said they offered the bill as a long-term solution to the state’s fiscal problems and a better alternative than Mr. Ehrlich’s proposal to bring slot machine gambling to Maryland to pay for public education.

It would put the biggest chunk of the revenues into a special trust fund for public education, guaranteeing that there will be money in future years to pay for the Thornton plan.

Republicans argued next year’s budget includes money for the Thornton plan.

“You can try to spin this any way you want, ladies and gentlemen, but it is the largest tax increase in Maryland history,” said Delegate Christopher Shank, Washington Republican.

Republicans also said Mr. Ehrlich’s slot machine bill, which passed the Senate but has not had a hearing or a vote in the House Ways and Means Committee, would be a better way to raise the money.

The House tax package also includes about $350 million in property tax reductions and tax credits for low-income Marylanders, leaving a net cost to taxpayers of about $670 million.

The bill also would reduce the property tax rate, which was increased by Mr. Ehrlich last year, by 8 cents for every $100 of the assessed value of property.

This article is based in part on wire service reports.

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