- The Washington Times - Monday, March 19, 2012

ANNAPOLIS — A Maryland House committee voted Monday night to significantly dial back a set of income-tax increases approved last week by the state Senate.

The HouseWays and Means Committee voted to eliminate any income-tax hikes on single residents making less than $100,000 a year and on couples earning less than $150,000 from a Senate plan that calls for nearly across-the-board tax hikes affecting every income bracket above $3,000.

In addition to giving relief to many middle-class residents, the committee also killed the Senate’s so-called “half-millionaire’s tax,” which would have imposed a flat 5.75 percent tax rate on every dollar made by residents earning $500,000 or more.

The Senate approved the flat tax last week as part of a bill that would have raised tax rates on nearly every tax bracket and netted the state more than $400 million in revenue next year.


Ways and Means Committee members said their income-tax increases would only generate $191 million, but would include the revival of a proposal to reduce the value of personal exemptions for the state’s highest earners.

While the panel deliberated Monday night, the House Appropriations Committee also approved changes to the Senate’s plan for shifting teacher-pension costs to counties, opting for a three-year phase-in rather than the Senate’s recommended four-year plan.

The House proposal would reduce state expenses by requiring counties to take on an extra $137 million in costs next year. The Senate plan would have only forced them to pay $68 million next year.

Maryland is one of a handful of states that pays teacher-pension benefits without help from local governments, and critics have long argued county governments that set salaries and benefits should take on some of the burden.

“This is an important action,” said Delegate John L. Bohanan Jr., St. Mary’s Democrat. “We’ve been talking about this for a long time, and we’ve got to do it to keep our state budget balanced.”

The income-tax and teacher-pension proposals are part of a Senate-approved, four-bill budget that the full House will debate and could approve as soon as the end of this week.

Representatives from the House and Senate will then likely have to meet in a conference committee to settle the differences in their plans.

While the House will consider a lesser set of tax hikes than those approved in the Senate, Republicans were still up in arms Monday over the proposal.

House Minority Leader Anthony J. O’Donnell asked to testify Monday before the Ways and Means Committee on the proposed tax increase, but was denied by committee Chairwoman Sheila E. Hixson, Montgomery Democrat.

Mrs. Hixson turned away Mr. O’Donnell on grounds that when House committees hold hearings on Senate-approved bills, they traditionally only allow the bill’s sponsor to testify.

“People are down, and this bill kicks them when they are down,” said Mr. O’Donnell, Calvert Republican. “It’s outrageous, and opposition should have been heard.”