The Senate Budget and Taxation Committee eliminated a tax credit program considered crucial to the revitalization of Baltimore yesterday as it finished work on a budget that relies on vastly different revenues than those approved by the House of Delegates last week.
The committee voted to end the heritage tax credit for historic commercial properties, yielding an estimated $22 million to balance the state's budget. The program would remain in place for residential properties.
The decision was made over the objections of Baltimore senators, who said they would fight it when the House and Senate meet in a week to resolve differences between competing versions of the $22.6 billion spending plans.
The House has not altered the program.
"Damn right it's a big deal," said Sen. Nathaniel J. McFadden, chairman of Baltimore's Senate Delegation. "I'm going to work on it. It's important."
Testifying in support of the program this month, Mayor Martin O'Malley said: "What is difficult to quantify is what it has saved us, in terms of not having to pave woodlands and wetlands, of not having to build schools and roads."
The tax-credit vote came as the Senate committee made final decisions on its version of the budget.
The Senate has agreed to spend about $35 million more on higher education than the House, but cut about $15 million more from public school teachers' salaries, according to Warren Deschenaux, the General Assembly's chief budget analyst.
Senators want to collect $47 million in higher corporate filing fees, not the $125 million the House wants. But the committee voted for a one-time 10-percent corporate income tax surcharge to generate about $34 million.
Unlike the House, the Senate budget also leaves the state's half-billion-dollar "rainy day" surplus account virtually untouched.
Senate budget-writers have refused to rule out a $300 million income tax surcharge on wealthy residents or a one-cent increase in the state's 5-percent sales tax, which would generate $575 million.
Deschenaux called those ideas "end-game alternatives" as negotiators hash out a final budget compromise.