- The Washington Times - Wednesday, January 23, 2008

ANNAPOLIS — Maryland lawmakers yesterday proposed that counties help pay teachers’ retirement costs to reduce state spending.

Republican leaders made the proposal as an alternative to the computer-services tax that the Democrat-controlled General Assembly passed during a special session in November.

Senate Minority Leader David R. Brinkley, Frederick Republican, said he wants to cap the state’s annual contribution to teacher retirement plans at $600 million and curtail future increases.

“It has nothing to do with the benefit and has nothing to do with the benefit amount,” he said. “It only has to do with who contributes the amounts.”

The Maryland Association of Counties said the state should not unload on its 23 counties without giving them relief elsewhere, especially since they also are struggling with budget problems.

“If the state has a budget problem, shifting the problem to the counties doesn’t solve the problem,” said David Bliden, the group’s executive director. “It just means the tough decision has to be made at the local level.”

Lawmakers expanded the state sales tax to computer services during the special session in November as part of $1.4 billion in tax increases and $550 million in budget cuts designed to close a long-term budget gap and increase spending on transportation improvements, health care coverage and cleanup of the Chesapeake Bay.

The tax, which is expected to raise $200 million a year, would take effect July 1 and last until 2013.

The hasty manner in which the computer tax was increased in a broad tax package in a Senate budget committee has made it a political target for Democrats and Republicans.

However, House Speaker Michael E. Busch, Anne Arundel Democrat, and Senate President Thomas V. Mike Miller Jr., Southern Maryland Democrat, have said a repeal would pass only with $200 million in new taxes, budget cuts or a combination of both.

With Mr. Busch and Mr. Miller leaving open the door, leaders from both parties have begun talking behind the scenes about crafting a repeal and plugging the $200 million hole it would create.

Still, lawmakers acknowledge that finding the right mix of budget cuts and tax increases that would pass in the General Assembly is a tough task.

“A number of stars have to align,” said Sen. Robert J. Garagiola, Montgomery Democrat.

Mr. Garagiola wants to introduce a plan to increase the gas tax 6 cents to 8 cents per gallon over the next two years, which he hopes will raise $180 million to $260 million a year.

Sen. Jennie M. Forehand, Montgomery Democrat, said she will propose increasing alcohol, beer and wine taxes to raise $56 million in the first year, helping offset a repeal of the computer-services tax.

Computer-service businesses have been lobbying lawmakers since the end of the special session to repeal the new tax.

Business groups have joined with Comptroller Peter Franchot in saying the tax is a huge obstacle to expanding the technology sector of the state economy.

“But even worse is the impact on small businesses, who pay for their services,” Mrs. Forehand said.

Gov. Martin O’Malley, a Democrat, has opposed repealing the computer-services tax. He was scheduled to deliver a speech last night to supporters of the tax repeal.

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