O'Malley to raise taxes on top earners

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TOWSON, Md. — Gov. Martin O'Malley made public yesterday his plans to raise taxes on Maryland's top wage earners to help cut the state's $1.5 billion budget shortfall.

Mr. O'Malley, a Democrat, expects that the increase — along with legalizing slot machines and increasing taxes on sales, gasoline, cigarettes and corporate income — will generate roughly $2 billion.

The public announcement in Baltimore County — which the O'Malley administration named a "kitchen table talk" — was the first of several scheduled into next week to discuss the proposed budget.

"On some things there will be tax relief, and on some things we will have to pay more," Mr. O'Malley said. "At the end of the day, what you will see is that collectively a majority of us will be treated more fairly."

The governor also officially said he will call for a special General Assembly session to close the budget deficit — likely to convene in early November.

Mr. O'Malley expects to raise $163 million from the income-tax increases, which range from 1.25 percent to 1.75 percent, starting with single residents whose taxable income is at least $150,000 and married couples whose taxable income is $200,000 or more — about 4 percent of Maryland residents.

The other 95 percent of Marylanders would see a modest decrease in their income taxes — about $90 a year for single filers and up to $176 annually for married taxpayers.

Mr. O'Malley put off work on the budget shortfall earlier this year, choosing instead to transfer $1.2 billion out of state savings to close a $1 billion gap in his first budget.

He began his budget pitch Monday with separate, closed-door sessions with Senate President Thomas V. Mike Miller Jr., Southern Maryland Democrat, and House Speaker Michael E. Busch, Anne Arundel Democrat.

On Tuesday, he spoke privately with top Assembly budget leaders, but no Republican lawmakers were invited.