Sen. Larry E. Haines has introduced legislation he believes could appeal to two discontented groups -- citizens fed up with layers of bureaucracy and county government officials aghast at continually plummeting revenues.
Haines, R-Carroll, Baltimore, is sponsoring a bill that would establish a new method for collecting recordation taxes that consolidates the administrative function in one office and could create about $4.5 million in additional revenue in fiscal 1993 for Maryland's 23 counties and Baltimore City.
But under the proposal, the local jurisdictions' revenue gain would be the state's loss, which has prompted the Maryland Department ofBudget and Fiscal Planning to oppose the legislation.
The Maryland Association of Counties and government officials representing Baltimore, Anne Arundel and Prince George's counties testified last week in support of the bill, which would allow county governments to directly collect recordation taxes from property deeds, security agreementsand other instruments of writing.
Taxes on those documents now are collected by the clerk of the circuit court, which retains 5 percent of the income in Carroll (and between 2 percent and 5 percent in all other jurisdictions). The 5 percent collected is returned to the state treasury. The clerk of the court, a state-financed office, pays the remainder to the local government where the tax is collected.
In fiscal 1990, the clerk of Carroll Circuit Court retained an estimated $226,316 in recordation fees. About $4 million was retained by clerk offices statewide.
Most Maryland counties are structured and staffed to handle recordation tax collection through finance departments and would not have to purchase additional equipment or add staff, Haines told the Senate Budget and Taxation Committee Friday.
"Collections by the clerk of the court's office is not necessary," he said."With the current fiscal problems and reductions in financial aid bythe state to local governments, we should permit local government tocarry out this function."
MACo and other proponents of the bill argued that the legislation is appropriate as the state considers waysto allow local government to raise more revenue to offset reductionsin state aid. An Anne Arundel budget officer said the county's coffers could be increased $60,000 annually in investment income because county government would have immediate access to the fees collected.
Streamlining the administrative process also could "produce efficiencies for both the users and administrators of this system," says MACo.
Mary McNally Rose, clerk of Anne Arundel Circuit Court, said she supports the bill because it returns control to county governments,where taxpayers have greater influence over spending and taxation.
However, the state budget office says it would be a hardship to make up for the loss to the clerk's office of between $4.5 million and $5 million for fiscal 1993. More than $43 million has been requested for the clerk offices from the state general fund.
Currently, Prince George's is the only county with authority to directly collect the recordation tax. The state has compensated for the lost revenue to the Prince George's clerk's office since about 1968.
"This is not a precedent that should be followed," says a budget office statement.