House and Senate Consider Differing Tax Plans, Three-Year Pension Phase-In

As reported by the Baltimore Sun, both the House and Senate are considering tax increases as a part of their budget plan.  However, their proposals are very different.

The Senate is considering a measure that would raise the income tax for almost every Marylander by a quarter of a percent, effectively rolling back a tax cut made 15 years ago, key senators said.

The House is looking at a plan that would hit the top 7 percent to 10 percent of earners with a steep increase but leave everyone else alone, said House Speaker Michael E. Busch.

While both chambers are looking to make additional cuts to balance the budget, neither the House nor the Senate leadership favor a cuts only approach.  However, the Senate Budget and Taxation Committee “has a hearing scheduled Tuesday on what senators are calling a “doomsday” budget proposal that would put the state’s books in order entirely by reductions to government spending.”

Senator David Brinkley…believes that the Senate leadership’s list of “massive cuts” will be written in such a way that they would go into effect only if an across-the-board income tax increase fails.

There also seems to be support for a phase-in of teacher pension costs being transferred to county governments.

But Miller and Busch both want to reject O’Malley’s proposal to come up with $240 million of that by shifting part of the cost of teacher pensions to the counties in a single year. Slowing down the transfer means the state has to make up revenue in other ways.

A proposal gaining momentum in the Senate is a bill sponsored by Senator Roger Manno, SB 523.  As previously reported, this bill would increase the State’s income tax rate on most taxpayers’ income by .25%.

Additional coverage can be found in the Washington Post.

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