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House gives tentative approval to tax hike

March 25, 2004|by LAURA ERNDE

laurae@herald-mail.com

Over the objection of Washington County lawmakers Wednesday, the Maryland House of Delegates tentatively approved a $670 million tax increase.

Because Gov. Robert L. Ehrlich has threatened a veto, many in the General Assembly believe the proposed increases in sales and income taxes ultimately will be dismissed.

Del. Christopher B. Shank, R-Washington, asked the House to reject raising the sales tax from 5 percent to 6 percent.

Shank called it a regressive tax that will "drive a nail into the coffin" of small businesses and said it's not needed because Ehrlich submitted a balanced budget.

"Those with the least ability to pay will shoulder the most burden," he said.

Consumers in border counties such as Washington County will go to neighboring states to avoid the tax, Shank said.

"This tax increase punishes Maryland families when there's a perfectly viable alternative that this House has yet to even consider," he said, referring to slot machines.

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Del. John P. Donoghue, D-Washington, was one of a handful of Democrats who joined Republicans trying to strip several proposed tax increases from a budget-balancing bill.

"After what was done last week to the people in Washington County with the flush tax and the car tax, I just think it's going overboard," Donoghue said.

Last week, the House voted to increase car registration fees and begin charging a $30-a-year sewage fee for cleanup of the Chesapeake Bay.

Democratic leaders said the package is the best way to keep the legislature's commitment to boosting education by $1.3 billion.

In addition to increasing the sales tax, the package would increase the income tax to 6 percent on individuals who make more than $150,000 or couples making $200,000.

It would reduce the property tax from 8 cents to 5 cents for each $100 of assessed value.

It also strips the sales tax on salty snack foods that was approved by the Senate last week.

An average family making $30,000 a year would pay an extra $85 a year, said Del. Anne Healey, D-Prince George's.

Senate President Thomas V. Mike Miller, D-Prince George's, called the tax package a "non-starter."

"To pursue this in light of the governor's veto would be a total exercise in futility," he said.

With less than three weeks to go in the legislative session, numerous issues of taxes and slots are unresolved.

"We're going to try to avoid a bumpy ending. It's going to be very difficult," Miller said.

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