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New Maryland Senate plan would raise income taxes at $75k

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Local,Maryland,Ben Giles

Almost 40 percent of MontCo residents would be hit

ANNAPOLIS - Almost 40 percent of Montgomery County residents would see their income taxes climb under a new budget plan proposed by Senate lawmakers before negotiations scheduled with Gov. Martin O'Malley Tuesday morning.

Senate President Thomas V. Mike Miller Jr., D-Calvert and Prince George's, says he wants to tax more Marylanders to raise more revenue by changing income tax brackets agreed to during the General Assembly.

The not-so-Free State
Even more residents of Montgomery and Prince George's counties would be hit by tax increases proposed by the Maryland Senate president.
CountyEarn more than $75,000Earn more than $100,000
Montgomery38 percent28 percent
Prince George's25 percent14 percent
Source: Maryland Comptroller's Office, Personal Income Tax Statistics

His proposal would hit single-filing taxpayers earning more than $75,000 in adjusted gross income and joint filers earning more than $125,000 annually. Under the deal that was negotiated in the legislative session, Marylanders earning more than $100,000 would see their tax rates raised.

Roughly 38 percent of Montgomery County residents would pay more income taxes under the proposal, compared with 28 percent under the legislature's current budget agreement, according to an analysis of 2008 tax data from the Maryland Comptroller's Office.

In Prince George's County, more than 25 percent of residents would pay more taxes, compared with roughly 14 percent.

More than 700,000 tax returns -- or 25 percent -- filed by Marylanders in 2008 reported adjusted gross incomes higher than $75,000, according to the Maryland Public Policy Institute.

"That seems like something that's going to affect a lot of normal households, like a teacher or nurse or federal employee," said Gabriel Michael, senior fellow at the policy institute. "These people aren't rich by any measure, especially if they're living in an expensive county."

Miller outlined the Senate's position in a letter ahead of his morning meeting with O'Malley and House Speaker Michael Busch, D-Anne Arundel, as the Democratic leaders try to reach a budget consensus before the governor calls lawmakers back to Annapolis for a special session.

Democrats in both chambers want to call a special session to avoid more than $500 million in "doomsday" budget cuts that would go into effect if the legislature fails to pass a complete budget package.

An eleventh-hour deal reached by House and Senate leaders protected Marylanders earning less than $100,000 from tax increases, a threshold that delegates refused to budge from.

But senators were wary that the tax deal they negotiated -- one that raises $195.6 million from income rate changes -- did not increase revenue enough to help close Maryland's $1.1 billion structural deficit.

"If we are to compromise the Senate proposal so significantly to the House position on this matter, I believe it is fair to ask for a modification of the plan," Miller wrote to O'Malley and Busch.

Miller had said during the session that lawmakers would have to come back to Annapolis in 2013 and raise taxes again unless enough was done in this year's budget to set the state on the right track.

Some delegates on Monday balked at the idea of changing a tax structure that lawmakers agreed to in principle during the session.

House leaders steadfastly opposed raising taxing in any way on residents earning less than $100,000 annually -- people earning that much, especially in the Washington region, have enough financial hardships before the state comes asking for more, said Del. Jolene Ivey, D-Prince George's.

"It seems to me we had an agreement, and if it's true the clock simply ran out, the special session is just adding time to the clock," Ivey said. "It doesn't mean we need go back to the negotiating table."

bgiles@washingtonexaminer.com

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