Legislature Backs 'Tech Tax' Repeal, Hospital Takeover

The bill that passed last night is expected to generate about $110 million a year from the surcharge before it expires in three years. It also calls for cutting $50 million a year from transportation projects for five years and directs O'Malley to come up with $50 million in savings from state agencies by July 1.

Fourteen of the 24 lawmakers in Montgomery's House delegation voted for the bill last night, and 10 members opposed it. All 24 are Democrats.

In an interview last night, O'Malley said the "tech tax would have hit a lot of small businesses, and I'm glad we were able to get rid of it in a fiscally responsible way."

He said that concerns about the income surcharge causing people to leave the state are overblown, adding that several residents had told him "they are willing to pay a little more to defend what we have as a people."

The Senate voted 44 to 3 yesterday to pass emergency legislation establishing an independent authority to take over the Prince George's hospital system as it seeks a new owner. The House later voted 120 to 13 to accept the Senate bill and send it to O'Malley.

The legislation reflects a deal last month between state and county leaders, under which the state and county would each pay $12 million annually for the next two years to keep the facilities open while searching for a long-term owner.

The hospital system, anchored by Prince George's Hospital Center, in Cheverly, is owned by the county and serves 180,000 patients each year, many of them poor and uninsured.

Sen. Ulysses Currie (D-Prince George's) replied that the Cheverly center is the state's second-largest trauma center and is critical to the Washington region. "If, God forbid, this hospital were to close, it would impact every other hospital in the state," Currie said.

The county and state have engaged in years of tense negotiations over saving the hospital system. In passing the bill, the Senate rejected two amendments introduced by a Prince George's senator that would have allowed continued state funding of the system even if leaders do not reach agreement on a long-term funding plan within 60 days, as mandated in the bill.

Sen. David Harrington (D-Prince George's) argued that his amendments would ensure that the hospital has enough public money to remain open even if negotiations stretch on for months. But Harrington's proposals failed.

Arguing against the amendments, Currie said 60 days is more than enough time to establish a funding plan.

O'Malley said he considered passage of the authority bill to be progress. "For so many years, we've patched the hospital system together, so this is a big step," he said.

Lawmakers also wrapped up work yesterday on the only constitutional requirement of the 90-day session: passage of an annual budget.

With the state's economic outlook uncertain, the budget committees sought this session to leave a relatively large reserve fund in case revenue projections do not meet expectations. The budget passed yesterday includes nearly $1 billion in the state's reserves.

Staff writer Rosalind S. Helderman contributed to this report.