ANNAPOLIS - Maryland lawmakers have introduced several measures to prevent older, wealthy Maryland residents from moving to neighboring states with fewer taxes.
One bill sponsored by Sen. E.J. Pipkin, R-Eastern Shore, would repeal the state's inheritance tax, the seventh-highest in the nation, according to the Department of Legislative Services.
Maryland's estate and inheritance taxes, levies that aren't collected in neighboring Virginia and West Virginia, are a burden to families trying to stay in the state, according to Larry Helminiak, chairman of the Carroll County Republican Central Committee.
"Most folks take the advice of their accountants and get out of Maryland," he said.
Repealing the tax "would send a signal to the whole country that Maryland is going back to being more friendly to people with a lot of money that could pay their taxes in Maryland, rather than some other state," Helminiak said.
Another bill, sponsored by Sen. Ronald Young, D-Frederick and Washington counties, would allow residents 70 years old and up to avoid paying taxes on their retirement income.
By 2018, up to $75,000 in pension income could be excluded from the state income tax, according to the Department of Legislative Services.
Taxes on pensions are so high that some seniors are worried about being able to stay in their homes, Young said.
"We are just seeing more and more people move to Pennsylvania to cross the line, or move from the shore to Delaware, to avoid paying these taxes," Young said.
But the bills have a slim chance of passing in the face of a coming Senate budget debate that includes talk of raising income taxes for most Marylanders, Young said.
Republican leaders in the House of Delegates proposed an alternate budget Tuesday afternoon that freezes state spending at fiscal 2012 levels without increasing taxes, for an operating budget of roughly $34.8 billion.
The plan also excludes the Senate's proposal to shift half of teacher pension costs from the state to the counties, another indication of how far apart lawmakers are from reaching an agreement on the budget.
The Senate is scheduled to begin debate on its budget plan Wednesday morning.
"We're not on the same page as the House, and we're not on the same page as the governor, quite frankly," Senate President Thomas V. Mike Miller Jr. said Tuesday. "It's going to be a tumultuous time."