State tax battle about to begin Tax bills are introduced in a skeptical Assembly.


The battle over Gov. William Donald Schaefer's bills to raise more than $1 billion in new taxes annually may begin in earnest now that the proposals have been introduced in the General Assembly.

The controversial bills, which were introduced last night, will face a particularly rough road during coming weeks since many lawmakers have vowed to oppose major tax increases.

The so-called Tax Fairness Act of 1991 would raise $800 million a year by restructuring income taxes; expanding and raising the state sales tax; and imposing a 2 percent tax on cars and boats.

The bill mirrors the recommendations of a gubernatorial tax commission headed by Montgomery County lawyer R. Robert Linowes.

The second tax bill includes a provision applying the state's 5 percent sales tax to motor fuel, on top of the current 18 1/2 -cent-a-gallon state fuel tax. The bill, which would provide money for stalled transportation projects, would increase the price of gasoline by an estimated 6.5 cents per gallon initially.

The transportation tax bill would raise motor vehicle fees, along with car and truck registration fees. Overall, that bill seeks to raise $1.5 billion over five years for road construction and maintainance.

Maryland Transportation Secretary O. James Lighthizer unveiled a lengthy list of projects, including improvements to U.S. 50 and the Baltimore Beltway, that may be deferred if a tax increase is not approved.

Administration officials admit they hold little hope of seeing both bills passed in their entirety this year, especially in light of the uncertainties caused by the recession and Persian Gulf war.

House Speaker R. Clayton Mitchell Jr., D-Eastern Shore, said yesterday that the legislature does not have enough time remaining before it adjourns in April to consider the Linowes proposal as fully as it would like.

Several lawmakers have suggested that the Tax Fairness Act be studied during the summer for possible legislative action next year. Small pieces of the bill, however, could be enacted this year, they said.

Overall, the Tax Fairness Act would:

* Increase the sales tax from 5 percent to 5.5 percent and make it apply to cigarettes and a variety of services from haircuts to auto repairs.

* Raise income taxes for wealthier Marylanders while lowering levies for many taxpayers who earn less than $40,000 a year.

* Change the way property is assessed and lower property taxes.

* Impose a 2 percent personal property tax on cars and boats.

If passed, the various parts of the Linowes plan would be phased in during the next two years. The revenue generated would help pay for public schools, transportation projects and aid to poorer areas, such as Baltimore.

Alan Keyes, president of the Washington-based Council for Citizens Against Government Waste, said Marylanders will not stand for the tax increases proposed by the Linowes Commission.

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