Senate passes tax increase, pension shift

May 15, 2012|By Michael Dresser, The Baltimore Sun

The Maryland Senate passed an income tax increase and a shift of some of the cost of teacher pensions to the counties Tuesday, averting more than $500 million in so-called Doomsday budget cuts that otherwise would have taken effect July 1.

On the second day of what is expected to be a three-day special session, the Senate voted 27-19 for the $264 million  tax  package, with the chamber's 12 Republicans and 7 Democrats opposed. The vote on the budget companion measure that includes the teacher pension shift was 33-13.

Both measures now go to the House of Delegates, which will convene at 3:00 p.m. to take up the Senate legislation. That chamber is expected to debate proposed amendments to the bills Tuesday and to come back Wednesday for a final vote.

The Senate's action took place after a vigorous but restrained debate during which Republican senators decried Gov. Martin O'Malley's record of raising taxes and fees since taking office six years ago. Senate Minority Leader E. J. Pipkin, an Upper Shore Republican, charged that with the tax increase the Senate approved Tuesday, the O'Malley administration has now passed the $2 billion mark in the amount that Marylanders' annual tax burden has increased.

The income tax component of the $264 million tax package would spare about 86 percent of Marylanders, but the 14 percent who either make $100,000 as individuals or $150,000 as couples would pay from one-quarter to three-quarters of a percentage point more as well as losing some of the value of their personal exemptions.

O'Malley called the special session after the General Assembly ended its regular session last month after passing a budget but not the two companion measures that were part of the package. The result was that a series of spending cuts -- described by Democrats as the Doomsday budget -- would have automatically taken place without Assembly action. Many of those cuts would have fallen on such programs as K-12 schools, higher education, Medicaid and law enforcement.

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