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Senate Panel Approves $300 Million in Cuts
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The full Senate is expected to debate the budget next week before shipping it to the House of Delegates. House leaders have said they will have some different priorities, including funding more of the $23 million that O'Malley requested for stem cell research.
Some delegates have also expressed interest in deeper cuts to leave more money to weather an extended economic downturn, if one occurs.
The budget O'Malley submitted to lawmakers in January projected about $177 million in surplus funds, not including a mandated state reserve fund.
The cuts by the Senate largely offset the downward revision in estimated revenue this week, leaving a projected fund balance of $156 million in next year's budget.
"You haven't made progress, but you haven't lost ground," Warren Deschenaux, the legislature's chief fiscal analyst, told senators yesterday after they finished making cuts.
Separately yesterday, a bill was introduced by Sen. Verna L. Jones (D-Baltimore) that would impose a surcharge on high-income earners. O'Malley spokesman Rick Abbruzzese said the governor would "take a serious look" at the bill as an alternative to a tax on computer services that was passed during the special session and is scheduled to take effect July 1.
Business groups have been lobbying for repeal of the tax, which is projected to generate $200 million a year. The tax was not part of O'Malley's proposals during the special session.
Lawmakers have said they are reluctant to repeal the tax without adopting another source of revenue. House Speaker Michael E. Busch (D-Anne Arundel) said yesterday that he does not believe there is consensus for an income tax surcharge as an alternative.
