Final touches put on budget

In a reversal, tax break for new cars reinstated

General Assemby

April 12, 2009|By Julie Bykowicz and Gadi Dechter | Julie Bykowicz and Gadi Dechter,julie.bykowicz@baltsun.com and gadi.dechter@baltsun.com

Maryland consumers who buy new cars will receive state and federal tax breaks, lawmakers decided Saturday - a reversal from their position a day earlier.

With just one day left of the General Assembly session, the reinstated car benefit was part of the state's nearly $14 million budget given final approval Saturday evening by the House of Delegates. The Senate will take up the budget on Monday, the last day of the session.

Meanwhile, the Senate signed off on an emergency bill giving the state the eminent domain authority to keep the Preakness and other horse racing assets in Maryland as their Canadian owner prepares to liquidate in a bankruptcy proceeding. The House gave preliminary approval to the measure, which is backed by Gov. Martin O'Malley.

Only a few key issues remain unresolved as the state's legislative session winds down. Chief among them is whether to let illegal immigrants keep their Maryland driver's licenses. The state faces an October deadline to comply with Real ID, a federal security act, and must tighten its licensing procedures.

Senate President Thomas V. Mike Miller, a Democrat representing Calvert and Prince George's counties, said there are not enough votes in his chamber to accommodate the House's preference for allowing people already licensed to renew for a "not federally compliant" license without proving they are in the U.S. legally. The Senate would do away with licenses for people who cannot show that they are lawfully in the country.

Miller said informal negotiations were taking place and that "some people are going to have to bend" in the final hours of the session. Del. Kathleen M. Dumais, the Montgomery Country Democrat who spearheaded the House approach, said last week that she would rather pass no bill than accept the Senate version.

Separately, the Senate Finance Committee voted on Saturday to approve a last-minute compromise between teachers unions and school boards over a long-sought labor proposal for binding arbitration in collective bargaining disputes. Until late this week, the bill "looked like it was dead," said Sen. Thomas M. Middleton, a Charles County Democrat who chairs the finance panel.

On Friday afternoon and Saturday morning, the two sides hammered out a proposal for a new labor board that would oversee disputes and mediation. Sen. Jamie Raskin, the Montgomery County Democrat who sponsored the bill, called the compromise "a big last-minute breakthrough." The measure still needs approvals of both chambers on Monday.

The state budget gained approval despite some Republican delegates who wanted spending further tightened. The operating budget for next year is $13.8 billion, down from $14.3 billion this year. But when coupled with federal stimulus money and other funding sources, state spending for next year is up by about $1 billion.

"We're spending money we don't have," said Del. Warren E. Miller, a Howard County Republican.

Within the budget, lawmakers reversed course on a decision they had made Friday to disallow the state portion of the car tax break authored by U.S. Sen. Barbara A. Mikulski, a Maryland Democrat.

Anticipating more money troubles on the horizon, lawmakers said they had been trying to leave about a $100 million fund balance for next year, and the state's portion of the car benefit would have cost about $10 million.

On Saturday morning, lawmakers on the budget committee found they had enough money after all to give car buyers the extra break - about $96 on the purchase of a $20,000 car. Buyers also receive a federal benefit of about $350 on the same vehicle.

Senate leaders said the House changed its mind about the tax break. Del. John L. Bohanan Jr., a budget committee member and St. Mary's County Democrat, said the reversal came after reviewing the fund balance and estimating it would remain close to $100 million even after factoring in the car benefit.

Asked whether Mikulski's office had been involved, Bohanan replied, "I don't believe she put any pressure on anybody. We just knew it was important to her." Mikulski said in a statement she was "heartened" that the break had been reinstated.

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