Maryland Senate to OK tax hike on $100k-plus earners

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Local,Maryland,Ben Giles

ANNAPOLIS -- The Maryland Senate tentatively approved a plan to raise taxes for residents earning more than $100,000 a year Monday evening.

Forty percent of the money raised from the tax increase would come from Montgomery County, where 23.3 percent of earners would pay more. Overall, nearly 14 percent of state residents would pay higher taxes, with 9.5 percent of Prince George's County residents paying extra, according to a fiscal analysis.

Tax rates would rise to as high as 5.75 percent for those earning more than $250,000 annually, and tax exemptions would be reduced for Marylanders earning more than $100,000. Residents earning more than $200,000 would see their exemptions eliminated entirely.

Lawmakers in the Senate preliminarily passed the $35.5 billion budget plan -- a series of spending cuts, tax increases, a shift of teacher pension costs and bond authorizations for school construction -- and plan to return Tuesday morning to send the bills to the House.

"We think we've answered these in the special session budget, and hopefully we'll have it passed and in place by tomorrow afternoon," said Senate President Thomas V. Mike Miller Jr., D-Calvert and Prince George's.

Maryland Comptroller Peter Franchot slammed the special session as "wrong" as lawmakers returned to Annapolis for the special session Monday morning.

In a lengthy campaign letter, Franchot chided the state's Democratic leadership for their plan to raise income taxes and reduce tax deductions for some of Maryland's highest-earning residents.

"The worst thing we can do to a struggling, consumer-powered economy is dig deeper into the pockets of consumers who are already experiencing a financial strain," Franchot wrote.

Republican leaders also spent Monday morning blasting Gov. Martin O'Malley for calling the session in the first place.

The three-day session is focused exclusively on the budget in an effort to avert the so-called "doomsday" budget, more than $500 million in contingency spending cuts that kicked in after lawmakers failed to pass a complete budget during the 90-day General Assembly.

"The budget package that is before you today will avoid those cuts, it will balance our budget and it will protect our AAA bond rating," said T. Eloise Foster, Maryland's secretary of budget and management.

While the governor's office touted nearly $600 million in cuts over fiscal 2012 and fiscal 2013, Republican lawmakers sought to remind residents that the true nature of the special session is raising new state revenues and dumping the cost of teacher pensions on the counties.

A four-year plan to shift teacher pension costs would save the state $136.6 million in fiscal 2013 but would increase costs for counties.

O'Malley's plan shows the governor is "out of touch," said Sen. Nancy Jacobs, R-Cecil and Harford.

"We may not have the votes, but we represent hundreds of thousands, if not millions of Marylanders who think they are paying enough taxes and want some restraint in government," said House Minority Leader Anthony O'Donnell, R-Calvert and St. Mary's. "We are their voice of opposition, and we're going to give them heck for the next three days. They are not going to get away with this."

bgiles@washingtonexaminer.com

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