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Catholic leaders eye tax changes Restructuring of state tax system to help the poor is being urged.


Leaders of Maryland's 800,000 Catholics are urgin lawmakers to restructure the state tax system in an effort to provide financial relief both for the poor and for the non-profit services they use.

At a press conference in Annapolis yesterday, church leaders renewed their annual plea for tax changes, saying the recession has had a particularly devastating impact on the poor.

"The statement we released today attempts to interject moral principles into the present debate on tax restructuring and, thereby, to advance the prospect that all Marylanders will be treated justly," said the Most Rev. John W. Ricard, auxiliary bishop and urban vicar of the Archdiocese of Baltimore.

State lawmakers, who recently rejected Gov. William Donald Schaefer's proposal to revamp the tax structure and raise $800 million in new revenues, have agreed to begin their own study this summer of how the state raises and spends taxes.

Legislative leaders have said they plan to complete their tax study in time for recommendations, if any, to be made to the 1992 General Assembly session next January.

"The tax system is going to have to be changed and people witmore should be asked to pay a greater proportional share," said Richard Dowling, executive director of the Maryland Catholic Conference, a coalition of Catholic groups. "It's a bullet that's going to have to be bitten in the interest of present and future economic security," he added.

Church-supported relief projects across the state have felt increased demands to feed, clothe and counsel the poor. Our Daily Bread, a popular soup kitchen in downtown Baltimore, provided food for about 125 people a day when it first opened its door 10 years ago, according to Hal Smith, director of Catholic Charities for the Baltimore archdiocese. Today, Smith said, the facility feeds 650 people -- including about 50 children -- each day of the week.

"There's no way we can see what we see without realizing that there has to be some tax involvement in order to generate the revenues to cope with this problem," Smith said.

On the Eastern Shore, where poverty programs experience the seasonal increase in demand from hundreds of migrant farm workers, Catholic shelters and other social welfare offerings are being cut because of a lack of funds.

"Our resources are stretched to the breaking point," said Richard Pryor, director of Catholic Charities for the Wilmington diocese, which encompasses the Shore's nine counties.

Catholic leaders at the press briefing proposed that low-income earners be given special tax breaks and that wealthier state residents pay more. By using a combination of the proposals, said Dowling, state revenues could increase while income and sales tax burdens on the poor would be lessened.

Dowling called Maryland's current tax system "among the most regressive in the nation" and called upon lawmakers to display "some profiles in economic courage" by enacting more progressive tax laws.

Although he said he welcomed the church's participation in the tax debate, Del. Charles J. Ryan, D-Prince George's, disagreed with Dowling's statement that low- and middle-income earners in Maryland continue to pay taxes at the same rate as upper-income earners.

"That statement is not true," said Ryan, who chairs the House Appropriations Committee. "We've actually reduced taxes to the lower income level of the state by a factor of 22 percent in the last five years."

Most poor people pay no state income taxes, and the sales tax hits the wealthy much more than the poor, Ryan said.

Catholic leaders proposed four tax breaks for the poor, including an exemption from state income taxes for anyone earning up to (( 125 percent of the poverty level.

For a family of three, that would amount to $13,250 a year, according to Dowling, who said a change in the law would remove about 75,000 households from the state income tax rolls.

The bishops also proposed a tax credit for all renters, a sales tax credit for the poor and an earned-income tax credit that they said would provide a work incentive for families on welfare.

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