- The Washington Times - Sunday, April 12, 2009

ANNAPOLIS, Md. (AP) The House of Delegates gave final approval Saturday to Maryland’s $13.8 billion operating budget and a budget reconciliation measure, which includes a total of $866.5 million in spending reductions.

The House voted 106-30 to approve changes made by a joint House and Senate conference committee that reconciled differences in legislation approved by the two chambers.

The measure includes $2.5 billion in federal economic recovery money, and $1.4 billion of those federal funds are being used in place of the state’s general fund.

The House also gave final approval to the state’s $1.1 billion capital budget for infrastructure needs. The capital budget includes a one-time $150 million increase in borrowing to help address the state’s budget problems.

The House actions send the legislation to the Senate to finish the difficult budget work before Monday’s midnight adjournment. The budget includes a $96 million budget cushion in preparation for further economic deterioration due to the recession.

The House voted 107-29 for the budget reconciliation measure after the conference committee shifted gears into reverse on a tax break for new vehicles ? a break dear to Maryland’s senior U.S. Sen. Barbara Mikulski who battled for it in Washington.

“I am heartened the Maryland portion of my car tax break has been reinstated,” Mikulski said in a statement Saturday. “I fought for the car tax credit to save jobs, help consumers and get the economy rolling again.”

The panel was faced with several decisions relating to tax breaks after the federal economic recovery act triggered provisions in Maryland tax law. The state automatically “decouples” for one tax year from any federal tax law change that is estimated to alter state revenues by more than $5 million.

To carry over the state tax break on new vehicles would have cost the state $10 million, and the committee decided against it to boost the state’s budget cushion to prepare for potential declines in revenue estimates due to the recession. By “recoupling” with the vehicle tax credit, the estimated fund balance dropped from $106 million to $96 million.

The break will save a taxpayer about $96 in state taxes on a $20,000 vehicle purchase. The savings is about $350 for the federal break.

In other action, lawmakers voted to require homeowners who live within 1,000 feet of tidal waterways to upgrade septic systems with new technology to prevent nitrogen pollution from entering the Chesapeake Bay.

The septic tank legislation has generated contentious debate, largely from lawmakers in rural areas on Maryland’s Eastern Shore who say an expensive burden is being put on their constituents.

State analysts estimate there are roughly 50,000 septic tanks that would be subject to the regulations. It costs around $12,000 to upgrade an existing system to be compliant.

Supporters, however, say the state’s Bay Restoration Fund has enough money to pay for upgrades in systems that fail. But people who build new homes within 1,000 feet of tidal waterways would have a lower priority for state help.

“We will never clean up the bay if we have to keep playing catch-up, trying to clean up existing pollution while we allow new pollution to keep adding to the problem,” said Sen. Mike Lenett, D-Montgomery, who sponsored the Senate bill.

The House approved the Senate bill without amendments, sending the measure to Gov. Martin O’Malley, who intends to sign the legislation.

The measure would not affect people who live outside the state’s Critical Area ? land within 1,000 feet of tidal waterways.

Anne Arundel, Queen Anne’s, and Worcester counties already require homeowners to install septic systems with the nitrogen-removing technology when they build a new home in the Critical Area.

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