A major tax grab is expected on Wednesday as Government grapples with $15 million to $20 million in new Airport costs.

Finance Minister the Hon. David Saul has kept his seventh Budget under thick wraps.

But he warned in November that with Bermuda facing major new expenses at the Airport and other areas, "everyone is going to have to gird their loins to pay.'' While Government needs more money, Dr. Saul has other considerations to juggle.

He does not want to spark inflation, smack businesses that are just pulling out of the recession, or hurt the slowly-resurgent tourism industry.

Yet with Government likely three years away from a general election, there is no better time for a politically unpopular Budget.

Much of the speculation is swirling away from the usual sin taxes and hikes in Government fees and land taxes that were central to Dr. Saul's last Budget.

"He's probably going to try to be creative, and tap new and different sources,'' said Ms Carolyn Mello, executive vice-president of the Chamber of Commerce.

They would provoke loud howls, but a tax on dividends and a sales tax are among measures in the rumour mill.

A new tax that is very likely to be announced in the Budget is a payroll tax that will combine the hospital levy and employment tax into a single tax -- possibly with an increase added for good measure.

Dr. Saul promised a single payroll tax in his last Budget.

Also likely to be increased are the Airport landing fees for commercial aircraft.

At the current rate of 30 cents per thousand pounds, the rates are much lower than those at most international Airports and are garnering only about $300,000 a year for the American Government.

The Navy had moved two years ago to hike the rates to $1.70 per thousand tons, but backed off in the face of airline opposition. With Bermuda taking over the Airport and landing fees, sources said the rates could more than triple.

But it was not clear yesterday whether Bermuda would begin collecting the fees when it takes over air operations on June 1, or on September 1, when the Base is officially handed over. Which date is chosen has important revenue implications for Bermuda.

The cruise ship passenger head tax is likely to increase. And a hike in the $15 Airport departure tax is a strong possibility.

In the capital area, Dr. Saul is likely to announce more borrowing as Government moves forward on the $40-million senior secondary school at Prospect, major renovations at schools targeted to become middle schools, and further work on the Bermuda College Stonington Campus. Borrowing is expected to remain well within Government's legislated limit of $185 million.

Also to be announced in the Budget is Dr. Saul's reply to the 27.9 percent pay increase for Parliamentarians that was approved in a free vote in the House of Assembly.

In the House today, the new Independence referendum legislation is to be tabled, and MPs are to debate the report of the Premier's Task Force on Employment.