O'Malley budget clears House hurdle

More fees, more money for education and counties

March 23, 2011|By Annie Linskey, The Baltimore Sun

The House of Delegates gave initial approval Wednesday for a $14.6 billion state spending plan that closes a yawning deficit without raising taxes but would have Marylanders paying tens of millions more in extra fees.

The plan would put a stronger emphasis on education than Gov. Martin O'Malley's initial proposal by restoring nearly $60 million the governor chopped from schools. And it is slightly more generous to localities in aid for road maintenance and other funding.

But the plan could mean higher bus and train fares, as well as increasing fees for titling cars, using vanity license plates, recording property and registering birth records. The plan, for the budget year that begins July 1, rolls back an O'Malley proposal to fine bad drivers.

House Appropriations Committee Chairman Norman Conway said the spending plan — which could be approved by the House as early as Thursday before moving to the Senate — was "the most difficult" of his eight years leading the House budget committee. "We are proud that great progress has been made toward financial stability," he said.

But members of the House Republican caucus, which grew by six this year, disagreed. During the House debate, several noted that the House plan cuts only a net of $6.5 million from O'Malley's initial proposal.

"Another way of looking at it is four ten-thousandths of a percent," said Del. Andrew A. Serafini, a Washington County Republican.

Democratic leaders countered that the House budget will have a more substantial impact in subsequent years when it bites 40 percent off the structural deficit in a series of moves, such as reducing formula-driven funding increases to state and private colleges. O'Malley's plan reduced recurring costs by a third.

"We did a lot of movement behind the scenes," said Del. John L. Bohanan, Jr., a budget architect.

House Republicans cried foul when Democrats said that the spending plan does not rely on new taxes. The Republicans recalled O'Malley's 2010 campaign attacks on his GOP opponent for attempting to distinguish between taxes and fees.

"If it comes out of my pocket, it is a tax," said Michael D. Smigiel, parroting an O'Malley campaign ad.

Bohanan insisted there is a difference: Nobody needs to have a vanity license plate that says "hot mama," he said, drawing laughter from his colleagues.

But the House action Wednesday night isn't the last word on taxes. Hours earlier, a Senate panel heard testimony on a last-minute bill to raise the sales tax on beer, wine and liquor — a move that could eventually add $90 million in state revenues. The Senate is expected to debate the budget next week.

House Republicans used the budget bill to discuss deeper policy issues, offering amendments to cut state funding for abortions and stem cell research.

They also tried to ignite a debate on the controversial issue of allowing illegal immigrants to pay discounted rates at state colleges and universities, by offering an amendment prohibiting the practice.

But the Republican effort failed, which will likely encourage advocates on the immigrant issue. A bill allowing undocumented students to pay in-state tuition passed in the Senate, but some had been concerned that it might not clear the House.

Republicans also offered changes plucked from their alternative budget proposal, including a measure to cap state salaries at $1 below the governor's pay; to withdraw the planned $750 bonus to state workers; and to eliminate state funding for the horse racing industry. All of the amendments were rejected.

The House plan is more generous to state employees, rolling back one of the deeper cuts O'Malley proposed to retiree health benefits. Under the House plan, retirees would have a $1,000 annual out-of-pocket cap on paying for prescription drugs. (Couples would have a $1,500 cap.)

O'Malley had suggested a $4,500 cap for individuals and $9,100 for couples, angering retirees who said that the cost could eat up much of their monthly pension checks.

Meanwhile, of two O'Malley administration proposals to use the state's authority over driving to collect revenue, one survived in the House version of the budget and one was rejected.

The House accepted the administration's idea of withholding drivers' licenses and registration renewals from people and companies who have not paid undisputed taxes or unemployment insurance bills. But it scrapped the idea of collecting surcharges from drivers for drunken-driving convictions or for accumulating 5 points or more on their driving records within two years.

The "bad driver surcharge" had been expected to raise a relatively modest $3.8 million a year. It will be up to the Senate to decide whether to try to revive that proposal.

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