Maryland chamber rep paints potential tax picture

November 08, 2007|By ANDREW SCHOTZ

HAGERSTOWN - For businesses, the tax burden of Gov. Martin O'Malley's plan to erase the state's budget deficit could be about $800 million, a state chamber of commerce official said Wednesday.

"(This is) probably the biggest revenue proposal we've seen in several generations and we need to stay on top on it," said Ronald W. Wineholt, the vice president of government affairs for the Maryland Chamber of Commerce.

Wineholt spoke Wednesday at a Hagerstown-Washington County Chamber of Commerce breakfast at the Duffy's on Potomac restaurant in Hagerstown.

The previous day, a state Senate committee significantly changed pieces of O'Malley's plan.

The Budget and Taxation Committee softened a revamped income-tax structure and eliminated a property-tax cut.

It also scrapped the governor's idea to apply the state sales tax to four service industries, including health clubs.

Instead, the committee added other industries, including computer services and video arcades.

"This came completely out of the blue," Wineholt said.

He said new service sales taxes were projected to raise about $250 million for the state.

The largest component of O'Malley's plan is raising the state sales tax from 5 percent to 6 percent.

Cumulatively, the entire tax package would make Maryland less attractive for businesses, Wineholt said.

The Maryland General Assembly is in the middle of a special session O'Malley called to address the state's budget deficit, which most recently was estimated to be $1.5 billion.

O'Malley has put forward a tax-and-slots package projected to raise about $2 billion.

He is pushing for a referendum that would let state voters decide on legalizing slot machines in November 2008. The Senate Budget and Taxation Committee agreed to the referendum Tuesday.

The full Senate planned to wait until today before voting on the revised deficit-cutting package.

Wineholt urged the audience to speak up about elements of the plan that would affect them.

"Your legislators' ears perk up when they hear from you," he said.

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