Gov. Martin O’Malley (D) said Friday that he will summon Maryland lawmakers back to work May 14 to pass a tax package that collapsed in the closing hours of the General Assembly’s 90-day session, exposing bitter relationships between leading Democrats in Annapolis.
With the legislature’s inaction last month, more than $500 million in cuts to education, state agencies and other planned spending are scheduled to take effect July 1, a result O’Malley said Friday that he cannot stand.
“There is too much at stake not to move forward,” O’Malley said. “I’m confident that we can come together with the Senate president and House speaker to complete this most important work for the people of our state.”
The largest components of the leftover business include an income tax increase on those making more than $100,000 and the first step in a plan to shift responsibility for teacher pension costs from the state to Maryland counties.
Republicans, who hold modest minorities in both chambers, continued to say Friday that there is no need for a special session, arguing that Maryland is able to absorb the cuts.
O’Malley’s announcement followed several weeks of touchy negotiations with Senate President Thomas V. Mike Miller Jr. (D-Calvert) and House Speaker Michael E. Busch (D-Anne Arundel), with personalities factoring in as heavily as policy differences.
In the days after the session, the acrimony between Miller and Busch was on display, with neither communicating directly with the other about how to move forward.
But last week, a key stumbling block was removed during a breakfast meeting in which O’Malley suggested holding a second special session this summer devoted to a possible gambling expansion, a priority for Miller.
In addition to the demise of the revenue package, talks collapsed on the final night of the session over a bill calling for a statewide vote on allowing a full-fledged casino in Prince George’s County and table games at Maryland’s five other slots locations.
Miller and Busch have offered starkly different stories on whether the gambling legislation held up the revenue bill. Busch accused Miller of having a “gaming obsession.” Miller has insisted the two issues were not intertwined.
Despite his attempts to play peacemaker, O’Malley has also drawn flak from some lawmakers, who accuse him of not being sufficiently engaged during the 90-day session.
Legislative aides said Friday that they expect the first special session to last about three days. Although a few details remain to be worked out, lawmakers have agreed to pick back up with a pair of revenue bills that House and Senate negotiators approved but did not come to votes in both chambers before the midnight deadline April 9.
“I think it’s going to go pretty smoothly,” House Majority Leader Kumar P. Barve (D-Montgomery) said. “Basically, the agreement is to hold very close to [the revenue package] that ran out of time on the final day.”
Under that legislation, single filers making more than $100,000 and joint filers making more than $150,000 would pay higher income tax rates. Depending upon the bracket, the increases would be 0.25 percent or 0.5 percent. The legislation also would reduce or eliminate personal exemptions for higher-end earners.
Together, those changes would net the state nearly $250 million in the coming fiscal year, legislative analysts project.
In an opinion piece distributed to Maryland newspapers this week, House Republican leaders said that such tax increases are damaging to the economy and that the budget that resulted April 9 should stand.
“The legislature should take a breather, live with the budget just passed in April, and begin the 2013 session with a new sense of purpose in January,” said the piece, authored by Minority Leader Anthony J. O’Donnell (R-Calvert) and Minority Whip Jeannie Haddaway-Riccio (R-Talbot).
Lawmakers are also expected to take up again a provision that would partially shift teacher pension costs from the state to counties.
Counties have long resisted the change, but it was included in legislation that leaders of both chambers intended to pass on the final night of the session.
The more than $500 million in spending cuts are part of a “doomsday” budget lawmakers authorized if a revenue package did not pass. The reductions include an 8 percent cut for many state agencies. Also targeted for elimination is a $129 million supplemental education grant that benefits counties, including Montgomery and Prince George’s, where the cost of providing education is deemed to be higher based on a formula that takes into account the cost of living and other factors.
If implemented, the “doomsday” scenario would reduce planned higher education spending by $38.5 million, enough to prompt tuition increases, university officials have said. About 500 state jobs and cost-of-living salary increases for state employees would also be eliminated.