Editorial - Maryland's tough choices

April 11, 1997

Most of Maryland's business leaders were smiling Monday when the 1997 General Assembly adjourned, because they got just about everything they wanted. But some tough choices remain.

But first, the bills passed include:

- A 10 percent state income tax cut phased in over several years. The cut won't put give than a few hundred dollars back to the average taxpayer, but it's a message to prospective industries (and existing ones which might be looking to expand) that the state is trying hard to be business-friendly.

- The so-called "brownfields" legislation, which encourages businesses to redevelop abandoned industrial sites by limiting firms' liability for pollution they didn't cause. As long as businesses couldn't calculate what their true costs for a site would be, they would avoid older sites, using up more property while existing land remained unused, and

- A sales tax exemption for certain manufacturers.

This last will cost the state an estimated $40 million in revenues and highlights an issue raised by House Speaker Cas Taylor. The Allegany County Democrat worries that without some new sources of revenue, when the bill for all the favors granted in this session - the $250 million school aid package for Baltimore, for example - the state won't have enough cash to cover them.


Our recommendation: Begin now to examine the state's tax structure, by reviewing studies done in the recent past by the Linowes commission and others.

Put together some revenue projections that are conservative and match them up with the obligations the legislature has agreed to. If revenue doesn't cover the bills, then there are only two choices - cut back on state programs, or develop new revenue sources.

Cuts are politically unpopular, and in view of threatened litigation by Baltimore over school aid, probably aren't possible in that area. Marylanders must either fund the obligations their state representatives have agreed to through the tax system, or agree to something worse, like casino gambling. Neither choice is appealing, but not making a choice is not an option.

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