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Maryland lawmakers plan study of state tax structure

January 09, 2007

Democratic leaders who rejected slot machines as a partial solution to Maryland's financial woes now say they want to overhaul the state's tax structure to generate more revenue.

Washington County needs to join with other rural counties to make certain that any restructuring is based on what is fair and logical, as opposed to what areas with political clout can force on the rest of the state.

Top lawmakers and business leaders are leaning toward an appointed commission that would study how citizens and businesses are taxed.

The Maryland Chamber of Commerce, which might be expected to automatically oppose any new tax proposals, apparently is resigned to the fact that some change is inevitable.

Maryland Chamber of Commerce President Kathleen T. Snyder told The (Baltimore) Sun that what business wants is a study of what would work best, as opposed to a mere search for new revenue.

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The last major study of the tax structure was in 1991, when then Gov. William Donald Schaefer appointed the Linowes Commission.

Unfortunately, during a special session held in 1991 to find ways to close the revenue gap, Schaefer would not compromise and as a result saw most of the commission's proposals end up on the shelf.

What was talked about then - and now - is a restructuring that takes into account the fact that Maryland's service sector has become more dominant than manufacturing. That could mean a tax on more services and less reliance on sales and income taxes.

What effect such a package would have on Washington County is unknown now.

But it is not too early for groups such as the Hagers-town-Washington County Chamber of Commerce, the Hagerstown-Washington County Economic Development Commission and the Greater Hagerstown Committee to begin looking at which tax changes would adversely affect the local economy. Opposing such changes forcefully and quickly will reduce the chances that they would be enacted into law.

As for slots, those opposed to them need to be reminded that the state's horse racing industry needs an influx of cash.

Think horse racing doesn't matter to this area? Consider this:

At the start of the 2005 session, a group that included Magna Entertainment, (which owns Pimlico and Laurel Park,) the Maryland Horse Breeders Association and the Maryland State Fair and Agricultural Society made a report on horse racing to state lawmakers.

The group's officials told lawmakers that breeding and horse racing in the state have a $1 billion impact annually on the state's economy.

In addition, its report said that horse breeding makes it profitable to preserve 200,000 acres of green space in the state.

Preserving green space means less urban sprawl, which means the taxpayers won't have to pay for as many new roads, schools and public safety employees such as police, firefighters and paramedics.

Slots at the state's horse tracks would be a source of revenues and preserve the 20,000 jobs that Aris Melissaratos, Maryland's secretary of Business and Economic Development, said in 2005 were racing related.

Here is something else to remember: It took Pennsylvania two years from the passage of slots legalization until the first parlor was open.

It is not just a matter of saying yes and opening the spigot. If Maryland wants slot revenue two years from now, lawmakers need to act on a bill during the 2007 session.

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