Downtown business leaders were urged today to support proposals to revamp Maryland's tax laws by Robert Linowes, chairman of the Maryland Commission on State Taxes and Tax Structure.
Linowes heads the commission, which last month issued a report that called for major increases in state taxes, a fairer tax structure and increased revenues for education and transportation.
The report proposes increasing the income tax rate, forcing local governments to reduce property tax rates, instituting a 2 percent annual tax on cars and boats, and raising the sales tax rate to 5.5 percent from the current 5 percent. The report also recommends increasing corporate taxes from 7 percent to 7.5 percent, and taxing two dozen services, ranging from dry cleaning to lawn care.
Linowes told the businessmen the changes "are fair, they are equitable, they are just and they are right."
Two-thirds of Maryland taxpayers would actually see a tax decrease, he said. Of the new revenue generated by the taxes, 41 percent would go to education, 23 percent for local transportation, 13 percent for state transportation and 12 percent to assist the state's 12 poorest districts.
The Linowes commission worked three years on preparing its report, but its chairman said the difficult task still lies ahead in convincing legislators to enact its proposals. He and other commission members now are traveling throughout the state speaking to business leaders, educators and community organizations and urging them to support the plan.
So far, the business community has reacted cautiously. The Maryland Chamber of Commerce appointed a committee to research the report and has yet to take a position on it.
The Maryland Retail Merchants Association also is waiting to learn more about the report, but Tom Saquella, executive director of the association, said merchants have concerns about the plan.
Saquella today said retailers are worried about the proposed half-cent increase in the sales tax coming at a time when consumers already are reluctant to buy. He said they also are concerned that a proposed tax on telecommunications might have an adverse impact on telemarketing. And the group opposes dedicating any tax toward one budget area, such as education, because it fears a designated tax would make businesses targets for future tax increases.
"We definitely are concerned," Saquella said. "A lot of our concerns have to do with the timing of it."
But in Baltimore, which stands to gain an additional $83 million, officials are praising the report. Mayor Kurt L. Schmoke, who also addressed the business leaders today, urged them to support the plan.
Laurie Schwartz, executive director of the Downtown Partnership, said the extra revenue would help city businesses. "Disparities between Baltimore City's needs and the city's resources work to the detriment of the city and the businesses within the city," she said.