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Taxes at top of Assembly agenda; Legislature convenes to weigh tax increases in era of fiscal surplus; Gas, tobacco levies considered; Abortion, gay rights, sale of electric power also will be debated

THE BALTIMORE SUN

The General Assembly returns to Annapolis Wednesday for its annual 90-day session to deal with the politically charged proposition that one or more Maryland taxes should be raised -- even as the state enjoys a huge budget surplus.

Gov. Parris N. Glendening and some legislators say the state needs two major tax increases -- one in the gasoline tax to pay for road and transit projects, and another in the levy on cigarettes to discourage teen smoking.

But while the Democrat-controlled Assembly debates tax increases, Republicans will push in the opposite direction. With the state enjoying such a robust surplus, they argue that Maryland should accelerate the 10 percent, five-year income tax cut passed in 1997.

"When times are good and we have surpluses is not the time to increase taxes and try to take a bigger percentage of people's income," said Del. Robert H. Kittleman, the House Republican leader. "Now is absolutely the wrong time to do it, and I don't care what kind of tax it is, whether it's cigarettes or anything else."

While tax issues are likely to generate the most attention, the session also will test the political courage of lawmakers with votes on such issues as abortion, collective bargaining rights for state employees, and civil rights for gays and lesbians.

"When you talk about things like abortion or gay rights, you are talking about issues that go far beyond politics and to everyone's core philosophical beliefs," said House Speaker Casper R. Taylor Jr. "Those kinds of issues are certainly more difficult."

Much will be at stake for the public in the coming 90 days.

The legislature will take up a proposal by Glendening to expand a state scholarship program for science and technology students to cover teaching majors as well.

Lawmakers will look for ways to make health maintenance organizations provide more services to consumers.

And the Assembly will consider electric utility deregulation -- legislation that could affect the way every Marylander pays for electricity.

But it is the tax issue that will have the most direct impact on state residents.

Gasoline and cigarettes

Glendening and legislative leaders support a boost of unspecified size in the state's 23.5-cents-a-gallon gasoline tax, which was last raised in 1992.

Confusing the issue, Taylor floated an alternative plan last week to raise the state's sales tax from 5 percent to 6 percent, with the proceeds dedicated to mass transit, freeing up other funds for road projects.

To round up the votes for a gasoline tax increase, Glendening and legislators will have to make the case to the public that important road and transit projects would be deferred for years without additional money.

"We have to do a little public relations," said Del. Thomas E. Dewberry, a Baltimore County Democrat.

Maryland's gasoline tax is about 2 cents per gallon lower than those in West Virginia and Pennsylvania, but 3 to 6 cents higher than taxes in Washington and Virginia.

The governor said he will also introduce legislation to increase the state's 36-cent tax on a pack of cigarettes by a dollar over the next two years.

Glendening has pushed unsuccessfully for an increase in Maryland's cigarette tax the past two years -- with the twin goals of generating state revenue and driving down the rate of teen smoking.

Conventional wisdom holds that votes on tax increases should come at the beginning of the four-year term, to give voters time to forget about them before the next election.

'Plenty' of money

But lawmakers find themselves in the uncomfortable position of considering two tax increases at a time when the state's financial position is so strong.

The state has more than $700 million set aside as a hedge against an economic downturn. Revenues for this year are exceeding projections by at least $200 million. And the state can look forward to receiving as much as $730 million from the recent national settlement with tobacco companies over the next five years, according to the Assembly's fiscal analysts.

" 'Plenty' is the word which best captures the budget situation," the legislature's spending affordability committee commented in a recent report to the Assembly.

It is unclear if the political will can be found to pass either tax increase.

Del. John A. Hurson, the House majority leader, said polls show that the public would support increases in gasoline and cigarette taxes. But others are not prepared to support both.

"I will not vote for two tax increases," said Del. Howard P. Rawlings, the Democratic head of the House Appropriations Committee. "That's not why the voters of Baltimore City sent me down here."

Abortion issue returns

Abortion -- another issue that can win or lose votes for legislators in the next election -- will again be on the agenda.

Sen. Larry E. Haines, a Carroll County Republican, said he will introduce a bill to ban a late-term procedure that critics term "partial birth" abortion.

Twenty-eight states have passed similar legislation, although courts have blocked enforcement of the laws in 17 states on constitutional grounds.

A similar bill sponsored by Haines died in the Senate last year after debate. At least two moderate Republican senators who opposed the legislation were defeated in last year's election largely on the basis of their votes on the issue.

Haines says the incoming General Assembly might be more likely to pass the bill, despite a promised veto by Glendening.

"Public opinion on the issue is overwhelmingly in favor of the ban," Haines said.

Power deregulation

Lawmakers will step gingerly into the issue of deregulating the electric utility industry -- a move that would allow businesses and consumers to pick their power companies, but one that poses potential problems.

Lobbyists are already at work on behalf of utility companies, would-be power providers and major industrial users of electricity.

County governments and consumer watchdogs will weigh in with their concerns about issues of taxation and maintaining affordable rates for low-income citizens.

"If we can come to terms on those fundamental issues, I think we'll get it done," Taylor said.

Health care

On the health care front, managed care companies will continue to come under attack from doctors' groups and consumer advocates.

The most acrimonious battle might be over legislation that would allow consumers to sue health maintenance organizations over damages resulting from the denial of coverage for medical procedures. Glendening said during the campaign that he would propose such a measure, but indicated last week he might wait until later in his term.

Such a bill, while appealing to consumers, would drive up the cost of health care, said D. Robert Enten, a lobbyist for the Maryland HMO association.

"We see that bill as the gravest threat to our ability to deliver affordable health care," Enten said.

Racing industry

In another major financial arena, lawmakers are expected to consider new ways to help the state's horse-racing industry.

The industry has pushed hard for legalization of slot machines at state tracks, and key legislators are expected to back such a proposal this year. But it is unlikely to pass because of strong opposition from Glendening.

Other ideas have been floated to help Maryland racing, including proposals to have the state invest directly in existing tracks or in building a new one.

Ethics legislation

While there is little consensus on gambling issues, there appears to be overwhelming support for legislation to strengthen the state ethics law.

The bill would disqualify legislators from voting on issues in which they or their employers have a direct economic interest. They also would be barred from doing consulting work for state or local government.

Advocates for stronger ethics laws say the bill could do even more to restore public confidence in an institution rocked by last year's expulsion of a senator and the resignation of a delegate over alleged ethics violations. They say that members of the public should be given a role in disciplining lawmakers.

Said Kathleen S. Skullney, executive director of Common Cause/Maryland, the government watchdog group: "If we needed to take this opportunity to do some tweaking of the law, absolutely we should take every opportunity to do that."

Democrats in control

All of the issues will be handled by a General Assembly with veteran Democratic leadership and relatively little turnover after the November election.

Taylor is in his sixth year as House speaker, and Senate President Thomas V. Mike Miller has held his office for 12 years. All 10 standing committee chairmen remain from last year.

Glendening enters his second and last term in much stronger shape than four years ago, when he won election by fewer than 6,000 votes.

In November, Glendening prevailed by a comfortable margin of 55 percent to 45 percent, a margin he said validates his position on issues such as collective bargaining.

Republicans, who had hoped their candidate, Ellen R. Sauerbrey, would defeat Glendening and end the Democratic establishment in Annapolis, remain out of power and took a step backward in the election.

Democrats picked up an unexpected number of seats, increasing their ranks from 132 to 138 in the 188-member legislature.

For GOP leaders, the goal will be to continue pressing issues such as reducing taxes and shrinking government, even if the party's only victories are rhetorical.

Del. Robert L. Flanagan, the House Republican whip, predicted that the Democratic majority will "look within to please the interest groups that got them elected in the last state election. I think they're going to ignore the issues that we try to raise -- or give our issues lip service at best."

The ISSUES

These are some of the issues Maryland lawmakers are expected to consider during their annual 90-day legislative session, which begins Wednesday.

TAXES

The Assembly will consider raising the state's 23.5 cents-a-gallon gasoline tax, a boost Gov. Parris N. Glendening and some legislators say is needed to pay for road and transit improvements. Glendening also wants to raise the state's 36 cents-a-pack tax on cigarettes by a dollar. Republicans are expected to try to speed up the five-year, 10 percent income tax cut passed in 1997.

EDUCATION

The governor will propose an ambitious, $250-million budget to build and renovate schools. He also will seek legislative approval for a plan to hire more teachers to reduce class size, although he won't include money for the program until next year. He wants to expand a state scholarship program for science and technology students to cover teaching majors as well.

ELECTRICITY

Like many states, Maryland is considering opening its electricity market to competition. Big industrial companies support the move, which would likely reduce their power costs, and business groups say lower rates would help economic development. But concerns remain about the impact on average consumers. And environmentalists fear there will be pressure to increase the use of "dirty" electricity from coal-fired plants.

ETHICS

Prompted by last year's expulsion of a senator and resignation of a delegate over ethics violations, a commission headed by U.S. Rep. Benjamin L. Cardin has drafted legislation to tighten ethics laws for state lawmakers. It would, for example, forbid legislators from voting on bills with a direct financial impact on them or their employers. It would also prohibit lobbyists from buying meals or all but token gifts for lawmakers.

HEALTH CARE

The Assembly will consider legislation that would allow consumers to sue their health maintenance organizations for harm caused by coverage decisions. Lawmakers also will push to require certain coverage, such as a 48-hour hospital stay following mastectomies.

STATE EMPLOYEES

Glendening will push legislation to grant collective bargaining rights to state employees, codifying the executive order he put into place in 1996. State employee unions are pushing for the law as a way of improving pay and benefits, but critics say it would hurt the state's business climate. Glendening has promised to provide an across-the-board $1,275 raise for state workers, to be given in two installments over the next year.

Hearing schedules

Maryland General Assembly hearing schedules will be available again this year through SunFax. To subscribe to The Sun's automatic fax delivery service or learn how to retrieve schedules manually with your fax machine, call Sundial at 410-783-1800 and enter code 6105.

If you received automatic delivery last year and want to continue this year, you must call this number to confirm your subscription.

Hearing schedules are also available on the General Assembly's World Wide Web site at http://mlis.state.md.us/.

The General Assembly starts its 1999 session Wednesday.

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