State leaders give partial backing to minimum-wage hike

Lower estate tax expected to pass legislative session

January 27, 2014|By Natalie Sherman, The Baltimore Sun

Democratic legislative leaders gave partial support Monday to a push to raise the minimum wage, with some reiterating unwillingness to impose a "one size fits all" increase across the state.

They provided few other clues as to how they will respond to Gov. Martin O'Malley's call to lift the state's minimum pay from $7.25 an hour to $10.10 by 2016, with future increases tied to inflation.

"That's a debate we will have in committee," House Speaker Michael E. Busch said Monday at a breakfast for business leaders hosted by the Greater Baltimore Committee. "The governor sets the threshold. We determine if we're going to meet that threshold or go in a different direction."

The Anne Arundel County Democrat said the state has just two officials dedicated to enforcement of minimum-wage laws, raising questions about the ability to require an increase. The state's current rate, which has been in effect since 2009, matches the federal standard, allowing enforcement to fall to the federal government.

President Barack Obama, who has said he supports the $10.10 an hour standard backed by advocates, is expected to discuss raising the federal minimum in his State of the Union address Tuesday. Officials in Montgomery and Prince George's counties have already voted to raise the wage in their own jurisdictions gradually from $7.25 per hour to $11.50.

"I think the minimum wage needs to go up but I don't know how to do it, how fast to do it and who it will affect when we do it. This is not one size fits all," said Senate Majority Leader James N. Robey. The Howard County Democrat called an increase potentially "devastating" to seasonal employers in areas such as the Eastern Shore.

"I'm not there yet on passing it," he said.

Dereck E. Davis, chair of the House of Delegates Economic Matters Committee and a Prince George's County Democrat, said he does not support pegging future raises to inflation, a move he said would avoid future discussions about the issue.

Republicans oppose an increase, which they say will hurt hiring at small businesses.

"Instead of raising the minimum wage, let's lower taxes for the working poor," said Kathy Szeliga, minority whip in the House of Delegates, and a Republican representing parts of Baltimore and Harford counties.

More than 200 people attended the breakfast at Baltimore's Marriott Inner Harbor at Camden Yards on Eutaw Street, where politicians spoke about issues that will appear in the next legislative session.

Lawmakers said they are united around an effort to scale back taxes on inheritances, phasing in a move to the federal guideline, which last year exempted estates up to $5.25 million. Maryland's current law exempts inheritances up to $1 million.

Proposals to cut corporate and individual tax rates face a tougher path forward in a tight budget year, lawmakers said. O'Malley's fiscal 2015 proposal has $831 million cash available in the rainy and general funds, compared to $1.2 billion in the 2013 budget.

Robey said the legislature hopes to increase the cushion in the general fund from $31 million to a minimum of $100 million, as one of the state's top budget analysts recommended earlier this month.

"We're going to make some people unhappy because we're going to have to cut funding from certain areas of the budget," he said, ruling out new fee and tax increases.

Busch challenged local jurisdictions, which impose their own taxes, to make cuts.

"Any state that wants to reduce their local income tax, piggyback tax, I think the state can accommodate that," he said. "We'll be looking for that."

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