ANNAPOLIS, Md. (AP) — The House of Delegates approved a package of budget measures on Friday, including an income tax increase for single filers who make more than $100,000 and joint filers who make more than $150,000.
The four budget measures are working in tandem this year to balance the next fiscal year’s budget and knock down an ongoing $1.1 billion deficit by about half.
The House vote sets the stage for a panel of lawmakers from the House and Senate to work out differences between the two chambers, with one of the biggest being a significantly scaled back version of the income tax increase that was passed by the Senate.
Separately, the House also voted 90-46 to double the state’s “flush tax” on sewer bills from $30 a year to $60 to pay for upgraded wastewater treatment facilities. That bill now goes to the Senate.
The House vote came after two days of spirited debate, with Republicans attacking the tax increases while Democrats defended them as mostly modest and crucial to protecting education, health and public safety.
“This budget is socially responsible, because we maintain funding for core government services such as education, health and other programs which make up the social safety net,” said Delegate Norman Conway, a Wicomico Democrat who chairs the House Appropriations Committee.
But Republicans said the measures don’t cut nearly enough. The taxes, they say, will only hurt people who are still trying to recover from the effects of the recession.
“We’re kicking the citizens of Maryland when they’re down,” Delegate Anthony O’Donnell, R-Calvert, said.
The income tax increase, which was passed on an 81-56 vote, would go up from 4.75 percent to 5 percent for single filers with more than $100,000 and for joint filers who make more than $150,000 of taxable income.
The rate would rise from 5 percent to 5.5 percent for singles who make between $150,001 and $300,000 and for couples who make between $200,001 and $350,000. It would increase from 5.25 percent to 5.5 percent for singles between $300,001 and $500,000 and couples between $350,001 and $500,000. People who make more than $500,001 would pay 5.75 percent.
Delegate Kumar Barve, D-Montgomery, said the new rates would only affect about 8 percent of the state’s taxpayers. The changes would raise about $191 million.
“This is a tax package that will leave 92.2 percent of the citizens of Maryland untouched by the effects of the rate increases,” Barve said. “The vast majority of Marylanders are not going to be touched by this tax action, by this tax increase.”
But Delegate Mike McDermott, R-Worcester, described the measure as more like a pirate ship, cruising up beside the ships of Marylanders for pillage.
“The ship in the General Assembly is more akin to the Black Pearl, and I will say that when she pulls up alongside of you, nobody on board will be spared,” McDermott said.
The House also approved splitting teacher pension costs with counties on an 88-50 vote. The split would be phased in over three years, instead of the four under the Senate version of the bill.
The House passed a separate measure on a 93-44 vote to close loopholes that some counties have been using to avoid meeting school funding requirements. Maryland counties are supposed to spend at least the same amount on a per-pupil basis as the previous year, but several counties have failed to do that in the aftermath of the recession.
The measure would enable the state to take back money that counties collect on a piggyback tax on state income taxes and send it directly to school boards. It also would enable a county where voters have imposed a cap on property tax rates to raise them, if the money goes to education. Five counties, Montgomery, Prince George’s, Anne Arundel, Talbot and Wicomico, have such a cap.
Republican critics attacked the measure as a heavy-handed infringement on local governments that will lead to even more tax increases.
“You’re voting against your own citizens,” McDermott said. “You’re voting against your own people, and what they told you they didn’t want. They didn’t want you to go beyond a certain point.”
But supporters said it was only an option of last resort for counties that couldn’t find another way to meet the funding requirements.
“This legislation assures that school systems are not underfunded,” Delegate Anne Kaiser, D-Montgomery said. “It also provides financial options to counties in order to meet their commitments to education, and ultimately it provides flexibility to counties during tough economic times while also providing stability and predictability to our school systems and ultimately and most importantly for every public school student in the state of Maryland.”
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