Maryland leaders reach agreement on income tax hikes

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By David Hill

The Washington Times

Wednesday, May 9, 2012

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Maryland Gov. Martin O’Malley (left) is joined by state Senate President Thomas ... more >

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Senate Democrats said they hoped for broader increases to help further reduce the state’s $1 billion structural deficit and warned that smaller hikes could leave the door open for future revenue increases or spending cuts.

Senate members said they were able to persuade the House to cut an extra $100 million in spending and add more money to the state’s rainy-day fund, creating a $204 million fund balance for the year.

Lawmakers say this year’s budget would trim more than half of the structural deficit, which estimates projected gaps between revenue and spending in future years.

“We felt strongly that everyone needed to participate to give us a higher fund balance,” said Sen. Nathaniel J. McFadden, Baltimore Democrat. “We didn’t prevail so we’ll have to come back essentially and go through the same process.”

The Senate Budget and Taxation Committee will hold hearings Monday on the two bills and the Senate could pass them by the end of the day, Mr. Miller said. The legislation would then move to the House.

The committee will also hear testimony on a bill allotting $15 million for school renovations. Senate members said the bill already passed during the regular session but may have to be approved again due to concerns over the legality of it having been passed before the state budget.

Republicans are expected to propose competing budget proposals that would call for level or decreased spending over last year’s budget, although they are unlikely to receive much consideration from majority Democrats.

Senate Minority Leader E.J. Pipkin, Cecil Republican, harshly criticized the governor Wednesday and said more taxes will only harm the state’s economic recovery.

The governor’s “never-ending greed for revenue increases is topped only by his callous disregard for Maryland taxpayers and families,” Mr. Pipkin said. “I will do everything I can to prevent another session of picking Maryland pockets clean.”