Negotiators from the Maryland Senate and House of Delegates made slight progress on resolving their budget differences Monday, but the lawmakers did identify a new pot of cash they might tap to help fund the repeal of the computer services tax.
The Senate Budget and Taxation Committee also put off until today a work session on the tech tax repeal, apparently because leaders were coming up short of votes for a solution that includes a new income tax surcharge on millionaires.
Monday was the constitutional deadline for passage of the state budget, but as in past years,
Gov. MartinO?Malley planned to issue a proclamation officially extending the session for one more week.
Delegates and senators on the budget conference committee met for less than an hour Monday morning.
They compromised on a few positions, such as a halving O?Malley?s $50 million request for the new Chesapeake Bay 2010 Trust Fund, but making the cut for only one year.
A new wrinkle in the negotiations was a Senate proposal to take $70 million from the $180 million in reserves of the Maryland Automobile Insurance Fund, the insurer of last resort for people who can?t get their vehicles covered elsewhere.
The money would be used to fund the purchase of new state police helicopters, freeing up money in the transportation trust
fund that could be use to replace the $200 million from the 6 percent sales tax on information technology services passed in
November.
Warren Deschenaux, the legislature?s budget chief, said taking the money is “a new frontier” and recommended using only $35 million. The lawmakers agreed.
“That?s been a pool of money I?ve been trying to tap for some time,” said Sen. James Ed DeGrange, the Anne Arundel Democrat who chairs the transportation budget subcommittee. At the MAIF, “they?re not going to be happy about it.”
DeGrange said he still did not support a proposed 13 percent income tax surcharge on earnings over $1 million, raising the top rate to 6.25 percent from 5.5 percent, a 15 percent rate increase approved just four months ago during the special session. “I?d prefer to make further reductions,” DeGrange said.
That position is shared by Republicans and a number of Democrats on the budget panel.
