Maryland leaders to meet Monday to finish budget, tax plan

May 9, 2012

Maryland’s top political leaders on Wednesday pledged that a three-day legislative session next week would offer a tidy fix to the messy end last month of their regular session.

Legislative leaders, who appeared alongside Gov. Martin O’Malley (D) at a news conference, said they plan to take up two big pieces of business in short order, starting Monday: an income tax increase on six-figure earners and a partial shift in responsibility for teacher pensions from the state to Maryland’s counties.

Under the Democratic leadership’s plan, individuals making more than $100,000 and joint filers making more than $150,000 would pay more in income taxes.

An agreement on the budget would avert more than $500 million in cuts to education and other planned spending that was triggered by the legislature’s failure to pass the two measures on the final night of their 90-day session, despite negotiated agreements. The stunning collapse touched off unusually bitter finger-pointing, but the leaders said Wednesday that is now behind them.

“The three of us are in harmony,” Senate President Thomas V. Mike Miller Jr. (D-Calvert) declared after Wednesday’s news conference, at which he, House Speaker Michael E. Busch (D-Anne Arundel) and O’Malley voiced agreement about the scope and purpose of the special session the governor announced last week.

The so-called “doomsday” cuts that Democratic leaders are seeking to avoid include the elimination of 500 state positions, across-the-board cuts to many state agencies and reductions in aid to higher education that university leaders said could spur tuition increases.

Under the tax-increase proposal, increases would range between 0.25 percent to 0.75 percent, depending on income levels. The legislation also would reduce or eliminate personal exemptions for higher-end earners.

The session agreement, however, is almost as significant for what it doesn’t address as for what it does.

The three leaders confirmed they would hold off consideration until at least this summer — in a possible second special session — of a gambling expansion plan that could include a full-fledged casino in Prince George’s County.

Brinkmanship on that issue, which will get additional study, contributed to the chaos at the end of the 90-day session.

Also off the table is a proposed tax increase on gasoline that O’Malley has repeatedly said is needed to rebuild the state’s transportation infrastructure.

And there will be no increase in the sales tax — another idea O’Malley has floated — and no consideration of a measure the governor championed unsuccessfully during the past two regular sessions to jump-start the wind-power industry in Maryland.

Also missing from the special-session debate will be an attempt to recalibrate an education funding formula that has favored wealthier jurisdictions such as Montgomery and Baltimore counties at the expense of less affluent ones, including Prince George’s.

A plan to address that issue was contained in a Senate gambling bill that the House did not pass during the regular session. An alternate version was attached by House leaders to a tax bill that died on the session’s final night. Both plans would have eventually netted Prince George’s another $13 million a year without decreasing funds going to Montgomery.

O’Malley said he would introduce a bill to smooth over that issue in the next regular legislative session. The proposed fix is expected to cost the state about $50 million a year.

Lawmakers from Prince George’s had been pressing for resolution this year, and Prince George’s County Executive Rushern L. Baker III (D) made the issue a priority.

Baker said Wednesday that he was pleased “to have the governor’s assurance that it is his priority.”

Republicans, minorities in both the House and Senate, have said that a special session is not necessary and argued that the state should live with the consequences of the budget that took effect upon the legislature’s adjournment.

This week, Senate Minority Leader E.J. Pipkin (R-Queen Anne’s) said he would introduce alternative legislation that would keep spending in the $35 billion budget where it is and not raise taxes.

“This proposal is not a gimmick or a bookkeeping sleight of hand,” Pipkin said. “Rather, it is an appropriate response to stop the vicious cycle of ‘tax and spend.’ ”

O’Malley and Democratic legislative leaders sought Wednesday to bolster their case for reconvening.

“We fell a little short in the final day of the session, but I don’t think we can let those inactions go unaddressed and leave elementary school children out there without the funding they need for education,” Busch said.

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