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Maryland Politics
Posted at 01:59 PM ET, 04/02/2012

Updated: Tax and spending negotiations underway in Md.

Maryland House and Senate budget negotiators met Monday morning to start the process of reconciling differences in their tax and spending plans. But they put off tackling the two most contentious issues requiring compromise: teacher pension costs and income tax hikes.

The negotiators are scheduled to meet again later in the day, when the revenue conference committee will start ironing out differences between the two tax plans. But Sen. Edward J. Kasemeyer (D-Baltimore County) said the discussions will continue to be “preliminary” in nature.

Del. Norman H. Conway (D-Wicomico), who is on the conference committee dealing with differences over a $36 billion budget, said he hopes the committees can come to an agreement by Wednesday and bring the reconciled plans to the floor Thursday. State lawmakers are set to leave Annapolis next Monday.

But Kasemeyer, who is on the same committee, said he is doubtful that the two sides will find a compromise by Wednesday. “It’s hard for me to believe we will,” he said.

The longer the negotiations take, the less likely the two chambers will have time to focus on key parts of Gov. Martin O’Malley’s (D) ambitious agenda and literally hundreds of lower-profile pieces of legislation.

Both the House and Senate spending plans honor O’Malley’s wish to continue funding education at record levels and to raise taxes rather than cut projected spending increases that outpace still-depressed state tax revenue.

The Senate plan would collect most of its new revenue from an across-the-board income tax increase; the House version would target the top fifth of state tax filers, or most of those earning more than $100,000.

The plans also differ in how quickly they shift part of the financial burden of teacher pensions from the state to counties — a long-festering issue in Annapolis that could be on the brink of resolution.

Under the state Constitution, adopting a balanced operating budget is about the only thing lawmakers must do each year while in Annapolis.

House Majority Leader Kumar P. Barve (D-Montgomery), who is on the committee that will work out a compromise tax package, said he does not anticipate it being a very contentious process.

“I hope and I anticipate that it will be a relatively short discussion because I think that, already, there is an understanding of where the numbers point us,” he said, but declined to give more details.

Update: The committee tasked with finding a compromise tax package met Monday afternoon, with House and Senate negotiators laying out arguments for their respective tax plans but coming to no agreements.

Sen. Richard S. Madaleno Jr. (D-Montgomery) argued that a broader income tax hike would do more to address the state’s structural deficit, which would be about $1 billion annually for the remainder of the decade without new taxes or cuts. Barve replied that a plan that raises taxes on people making less than $100,000 would be a tough sell in the House.

Conference committees will reconvene Tuesday afternoon to continue talks on the tax package, as well as the the proposed pension shift, which was not discussed at all on Monday.

By Greg Masters  |  01:59 PM ET, 04/02/2012

 
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