Tax Package

Religious leaders gathered Wednesday morning to ask the Baltimore City Council to support a controversial package of taxes proposed by Mayor Stephanie C. Rawlings-Blake to help plug a $121 million budget gap. The brief news conference organized by the BUILD interfaith coalition marked the first public event supporting Rawlings-Blake's tax package, which has drawn fierce opposition from retailers, beverage distributors, hotel owners and a host...

During the recent special session in Annapolis, it wasn't just Republicans that were fighting tax increases. Democrats, like myself, offered amendments to cut spending rather than raise taxes, and seven of us voted against the tax package. The General Assembly had the audacity to raise taxes, while ending the budget year with a $207 million dollar surplus. That's in addition to the $721 million that was set aside for the rainy day fund. The knee-jerk reaction to raise taxes rather than live within our means shows a blatant disrespect for the business community in this state.

The answer to the above headlined question is almost certainly "yes." There is virtually no way to close the state of Maryland's $1 billion budget gap without imposing more taxes. A key legislator conceded that point over the weekend at a meeting of county officials in Ocean City. And, as Senate Budget and Taxation Committee chairman Laurence Levitan noted, "The longer we wait, the harder it will be" -- and the higher the tax increases.But when legislators and the governor discuss various tax options, they should not seek short-range solutions.

It took three carefully scripted days, but Maryland's ruling Democrats finally put in place the budget deal that eluded them in the waning hours of the state's regular session last month. The revenue package approved by the House on Wednesday will raise income tax rates on 14 percent of Maryland taxpayers while shifting some teacher pension costs to counties. The adjournment of this week's special session effectively ended the first budget impasse the state had seen in two decades.

ANNAPOLIS -- After stoking the engine with enough goodies to assure that a full crew would be aboard, the Senate's tax train unexpectedly chugged right off the tracks yesterday, even before it had cleared the station.By a 7-6 vote, the Budget and Taxation Committee killed -- for now, at least -- a bill that would have raised $430 million in new taxes by increasing and expanding the state's 5 percent sales tax, and by increasing taxes on cigarettes, alcoholic beverages and long-distance telephone service.

A steady procession of business leaders told City Council members yesterday that Mayor Martin O'Malley's proposed tax package will stifle Baltimore's real estate market and make it more expensive for companies to operate in the city. Representatives from the real estate, telecommunications and nonprofit industries expressed opposition to two elements of the mayor's three-pronged tax plan aimed at eliminating a projected $40 million deficit for the fiscal year that begins July 1. The council's taxation committee held hearings yesterday on O'Malley's proposed $3.50 monthly tax on traditional and wireless phones and a proposed increase in fees for recording real estate purchases, from 0.55 percent to 1 percent.

ANNAPOLIS -- Surprised by the unexpected scope of a half-billion-dollar tax package passed by the House of Delegates, Senate leaders yesterday began reviewing the massive proposal in search of compromise.The two houses will have to agree on state spending and a tax package to finance it by Monday at midnight, a week before the 90-day session adjourns and the constitutional deadline for enactment of the budget."I don't think the tax package enacted by the House is acceptable to a majority of the Senate," said Sen. John A. Cade, R-Anne Arundel, an influential member of the Budget and Taxation Committee.

City legislators, community leaders and Mayor Kurt L. Schmoke are preparing a comprehensive plan to revamp the state's tax structure to generate more revenue for education and health care.They outlined their strategy yesterday after a 90-minute meeting at Calvary Baptist Church in West Baltimore that was sponsored by Baltimoreans United in Leadership Development."Our children are suffering right now . . . and they're suffering because there's just not enough money," said Del. Elijah E. Cummings, D-City, one of more than a dozen members of the city legislative delegation who attended the meeting.

To borrow an old Annapolis cliche, Gov. William Donald Schaefer and Lt. Gov. Melvin A. "Mickey" Steinberg aren't singing off the same song sheet. Steinberg, who normally takes the lead pushing for Schaefer's pet bills, last week declined to testify on the governor's Linowes tax package, saying his heart wasn't in it since the bill is widely viewed as dead. Steinberg's remarks made it into the newspaper Friday and we all know how well Schaefer reads the newspapers.That same morning, Schaefer and Steinberg had a private breakfast with some legislative leaders and the chemistry between the governor and the lieutenant was a bit on the frosty side, according to witnesses.

ANNAPOLIS -- The president of the Maryland Senate has pleaded with his budget committee to set aside "petty grievances [and] petty needs" and work with the House on a compromise tax package.The only thing the two houses could agree on yesterday was a 20-cents-a-pack tax increase on cigarettes, and even that could be meaningless if the broader effort to strike a deal collapses.Senate President Thomas V. Mike Miller Jr., D-Prince George's, averted an immediate showdown with the House by persuading his Budget and Taxation Committee to put off for a day a vote on a new tax plan that would polarize the two houses even further.

The General Assembly's speedy embrace of Gov. Martin O'Malley's income tax increases this week cleaned up a political mess in Annapolis, but the rate hikes could come back to haunt the Democrat if he seeks national office when his time in the governor's mansion is up. O'Malley's tax package, which won final approval from the Democratic legislature on Wednesday, will give Maryland's top earners the seventh-highest income tax rate in the country....

A Maryland family making more than $175,000 will pay at least $254 more in income taxes this year under a revenue-raising plan the Maryland General Assembly is expected to take up when it convenes for special session on Monday. The same family of joint tax filers with two children reporting more than $1.1 million in gross income would pay an extra $3,269 — a larger hit to the very rich. The tax proposal would target the state's more affluent — pleasing liberals because it spares everyone in the lowest tax brackets and ensures that education and other programs won't be cut. Conservatives, however, warn it would turn away wealthy residents and hurt small businesses.

It wouldn't be right to call the calamitous end of the General Assembly session a failure. The word "failure" implies that those involved were trying to do the right thing and were for some reason unsuccessful. What happened Monday night, as the politics of an ill-considered gambling expansion bill tangled up a sensible compromise on taxes and the budget, was something quite different, a mixture of sabotage, negligence and too-cute-by-half gamesmanship. It reflects poorly on Maryland's leaders and belies the seriousness of the one real matter at hand: Who should be asked to pay more to maintain crucial state services, and how much?

If you have a package good store near the county line, Baltimore MayorStephanie Rawlings-Blake's proposed 5-cent bottle tax is not a nickel ("Mayor pushes school repairs," Feb. 14). Applying the tax to a 30-pack of beer would cost the city consumer $1.50 more plus a  15-cent sales tax on a tax. The nickel is now $1.65 more than the county! I agree that nickel is no big deal on a single item, but when you buy a bulk package, which is how beverages are sold in a package store, that nickel is devastating and prevents us from being competitive.

The legislature's special legislative session in October is supposed to be limited and quick. The to-do list includes approving a new congressional district map for the state, and not much else. But with Maryland facing a projected $1 billion shortfall, budget debates in Washington putting future federal contributions in question and Wall Street rating agencies re-evaluating the state's creditworthiness, Annapolis leaders could add taxes to the agenda. Asked about the possibility of an October revenue debate, Gov. Martin O'Malley signaled a degree of openness to the idea.

Before newly reelected Gov. Martin O'Malley and Democratic leaders in Annapolis commit themselves to avoiding any tax increases in 2011 in the name of jobs, they ought to consider how neglecting public infrastructure can be just as harmful to economic growth. Don't take our word for it. Listen to the U.S. Chamber of Commerce, the Greater Baltimore Committee, and many other business groups that have this to say about how much the government spends on highways, bridges, transit and other forms of transportation: Spend more, please.

ANNAPOLIS -- House leaders concocted a $247 million tax package yesterday designed to keep most ordinary Maryland taxpayers from screaming "ouch."The plan would hit Maryland's wealthiest taxpayers with a higher income tax bracket. But, as presented for the first time to Ways and Means Committee members last night, the plan would not contain some of the Senate's more controversial proposals, such as higher taxes on cigarettes, alcoholic beverages and dry cleaning.Anne Arundel Democrat Tyras S. Athey, the Ways and Means chairman, said the committee could vote on the plan as early as today, but he said he expected unspecified changes to the plan that could delay a vote until later.

Also yesterday, an article concerning a tax and budget pla approved by the Senate Budget and Taxation Committee incorrectly said that Baltimore would be the primary loser as the result of a proposed $14 million reduction in state aid for police protection. The city no longer shares in that program.ANNAPOLIS -- A chastened Senate budget committeetTC backed down yesterday from a plan to raise $430 million in higher taxes, voting instead for a more modest $265 million tax plan considered more salable to the rest of the General Assembly.

With the gubernatorial election over, the campaign rhetoric has quieted, but the problem of Maryland's billion-plus budget shortfall remains — and with it, the discussion of higher taxes. Former Gov. Robert L. Ehrlich Jr. and Republican leaders in the General Assembly warned that the re-election of Gov. Martin O'Malley and the Democrats would mean tax increases. Indeed, O'Malley refused to join Ehrlich in a campaign pledge against raising taxes. After defeating Ehrlich last week, O'Malley said the budget he proposes in January will not contain tax increases.

The Baltimore City Council gave its final approval Thursday to a 2-cent tax on bottled beverages, bringing to an end months of heated debate on how to close Baltimore's largest budget gap in memory. The 2-cent tariff, which is set to expire in three years, represents a compromise between Mayor Stephanie Rawlings-Blake, who had proposed a 4-cent tax, and council members who were pressured to oppose the tax by beverage distributors and store owners. Baltimore appears to be the only jurisdiction to pass a bottle tax this year.