Schaefer budget to undergo double dose of cutting State Senate may take even more off the budget or approve sales tax on snacks.


The Maryland Senate could make deeper cuts than the House or propose a sales tax on snacks in order to balance the Schaefer administration's proposed $11.6 billion budget.

The House budget package includes a pair of tax increases that lawmakers could support in order to restore nearly $74 million in cuts to state aid to subdivisions before sending the budget to the Senate for action.

But even before the full House of Delegates takes up the plan tomorrow, top Senate leaders are saying they have their own ideas about how to handle the budget.

The differences between the two legislative bodies aren't serious yet, said one lawmaker, but they could disrupt what was hoped to be an orderly budget-balancing process during a time when the state faces troubling deficits and revenue shortfalls.

"This is a step-dance," said House Appropriations Committee chairman Del. Charles J. Ryan, D-Prince George's. "We take a step and then they take a step and, in the end, we're doing the cha-cha."

Meanwhile, the dance partners are not in step.

When the Senate gets its chance to work on the budget, possibly as early as next week, deeper cuts may be made and at least one substitute tax plan could be developed, according to Sen. Laurence Levitan, D-Montgomery, chairman of the influential Budget and Taxation Committee.

The Senate seems likely to approve a House plan to raise about $36 million in new funds by raising the tax on cigarettes, said Levitan. But he said another House plan to raise $40 million by repealing the state's 40 percent capital gains tax exemption appears to be headed for oblivion if and when it reaches the Senate.

A similar bill died in the Senate four years ago, largely due to opposition from lawmakers who contended that exempting a portion of capital gains from taxes encourages people to spend money and help the economy.

If the full House approves the capital gains tax only to have the Senate reject it, the House budget-balancing tax package will fall short of raising enough money to ensure that subdivisions get enough financial assistance, say House leaders.

If that turns out to be the case, the Senate may consider either proposing another tax -- such as the so-called "snack tax" to close loopholes on some snack foods or a tax on some cafeteria meals -- or cutting deeper into the budget.

"We think we can make more cuts than the House made," said state Sen. Barbara A. Hoffman, D-City. "It's not that we want to hurt anyone, but there is no area that's a sacred cow."

One potentially deep cut under consideration by some senators would remove $3.5 million budgeted for University College, an alternative classroom program of the University of Maryland.

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