Maryland leaders wait on 'fiscal cliff'

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Local,Maryland,Rachel Baye

ANNAPOLIS - Maryland's legislative leaders are waiting to see whether the country falls off the "fiscal cliff" before deciding whether to raise taxes or introduce new spending, they said Thursday.

State Senate President Thomas V. Mike Miller Jr. and House Speaker Michael Busch met with Gov. Martin O'Malley on Thursday afternoon to discuss priorities for the General Assembly session that begins Jan. 9. However, the only decision they revealed after the meeting was a decision to wait on Washington.

"We told the governor we need to see how the issues in Washington are going to affect our state before we move forward on major financing initiatives," Miller told reporters.

The automatic budget cuts and tax increases that would go into effect if Congress doesn't strike a deal by Jan. 1 would hit Maryland and Virginia particularly hard because of the states' proximities to the federal government. Maryland alone could lose between 50,000 and 90,000 jobs and upwards of $250 million, the lawmakers said.

"If all of a sudden everyone's taxes go up, consumer confidence goes down. ... If people are in the workplace and they're not, you know, confident that their job's going to be there, it's going to have a tremendous impact and a very negative possibility if the fiscal cliff takes place," Busch said.

But if Congress comes to an agreement before January, "there's a stabilization of what the economy's going to look like, and there's some confidence ...

and people know what the direction's going to be for the next couple of years, I think it could benefit us," he said.

Among the measures the leaders are waiting to decide is whether to bolster the state's nearly empty transportation trust fund with an increased gasoline tax or similar levy.

The state is quickly running out of money to build new transportation projects, and in five years, there may not be enough money to maintain existing roads and transit, budget analysts warned lawmakers last month. Officials in Montgomery and Prince George's counties have been clamoring for money to build the Purple Line light rail that is planned to connect the two jurisdictions.

The three leaders also discussed the governor's proposal to require utilities to use more off-shore wind energy. The proposal O'Malley pushed last year would have added up to $2 to each ratepayer's bill but was defeated in the General Assembly.

Like transportation funding, though, wind energy will have to wait, the lawmakers said.

rbaye@washingtonexaminer.com

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