Leaders agree to seek more in Md. taxes Proposed package aims at $95 million to save programs


ANNAPOLIS -- General Assembly leaders tentatively decided yesterday to raise more taxes than they earlier planned to provide money to Baltimore and to finance several programs for which no other cash is available.

The plan, worked out in private meetings of House and Senate leaders, incorporates part or all of the revenue-raising measures previously approved by the two houses. They include higher taxes on cigarettes and capital gains and the closure of sales tax loopholes for food.

In addition, Senate leaders said yesterday that they intend to support a Schaefer administration proposal to raise another $40 million for the state's depleted Transportation Trust Fund by increasing more than 100 different types of motor vehicle fees, including registration fees.

That measure is still opposed by House Speaker R. Clayton Mitchell Jr., D-Kent, who remains unconvinced that the Transportation Department needs the money despite pressure from Gov. William Donald Schaefer and from some of his fellow legislators.

The tentative tax plan would raise an estimated $95 million -- about $21 million more than the tax increases the leadership previously had agreed on to avoid $74 million in cuts to local aid programs.

About $10 million of the extra money will help financially troubled Baltimore. The rest will probably be spread among programs to help the developmentally disabled, to assure adequate staffing in state hospitals, and to restore aid previously cut from the Maryland Science Center.

The tax compromise, worked out as a prelude to conference committee action on House and Senate budget versions, apparently will call for a 5 percent sales tax on cigarettes plus part, but not all, of the Senate's proposed 5-cents-per-pack increase in the excise tax on cigarettes.

In addition, it would include part of the Senate's bill to close loopholes in the sales tax on some foods. The plan also will probably include the House's proposal to eliminate the 40 percent tax preference for capital gains, except for taxpayers earning $50,000 or less, who still would enjoy a 20 percent tax preference.

The decision to raise additional taxes comes just as Governor Schaefer is turning up the political pressure on legislators to find additional money for a long list of social programs, as well as enough money to carry the Transportation Department at least through the next road construction season.

The governor's barrage began Monday with a supplemental budget -- immediately rejected by legislative leaders -- that proposed spending $48.3 million on many of the same programs the legislature now is raising taxes to finance.

On Tuesday, the governor's transportation secretary, O. James Lighthizer, unveiled new statistics showing a precipitous drop in transportation revenue, a move underscoring the need for more money.

The governor kept up the pressure yesterday -- simultaneously infuriating Speaker Mitchell -- by trying to drum up support for his various initiatives with an open letter to residents of the Eastern Shore that was reprinted on the front page of Easton's Star-Democrat.

The governor accused the General Assembly of blocking his effort to study the need for stationing a medevac helicopter on the Upper Eastern Shore and with frustrating his efforts to assure adequate staffing of two Eastern Shore mental hospitals.

The governor's office also circulated copies of a letter Mr. Schaefer sent to Federalsburg Mayor Aaron Kaplan, who had requested money for a wastewater project in his Caroline County town. The governor said that without the gas tax increase he has sought -- so far unsuccessfully -- no money will be available for new projects. He urged the mayor to call his legislators to complain.

Mr. Mitchell responded with a press release of his own saying the governor "has done a disservice to the citizens of the Eastern Shore by increasing apprehensions" regarding the availability of a medevac helicopter. Lt. Gov. Melvin A. Steinberg has developed a plan to station helicopters in Centreville around the clock, Mr. Mitchell said, adding that the plan could be implemented simply with an OK from the governor.

The speaker also lambasted the governor for complaining about staffing at state hospitals. It was Mr. Schaefer who originally eliminated the positions from the budget, Mr. Mitchell said, adding that the legislature is trying to restore them.

While urging the governor to "put aside these political broadsides," Mr. Mitchell fired one of his own: He said he has directed the budget conferees to review the 109 positions in the governor's office and determine if some could be abolished.

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