The Senate Budget and Taxation Committee voted 10-5 to repeal the 6-percent computer services sales tax they had passed in November. The senators voted to replace half of it with a three-year surcharge on incomes over $1 million, and also moved $50 million out of the transportation fund. They also told the governor to come up with another $50 million in budget cuts.
Several senators said they didn?t like the income tax increase and would have preferred to see more spending cuts, but they found the tech tax even more damaging to Maryland?s economy.
“This is a real hard vote for me,” said Sen. Nancy King, the only one of three Montgomery County Democrats on the committee to vote for the compromise. Sen. Richard Madaleno, D-Montgomery, had proposed cutting $150 million from transportation funding that was added in November, rather than the tax on millionaires.
“I really believe that cutting transportation is worse than the income tax,” King said.
Sen. Bobby Zirkin, a Baltimore County Democrat, said, “I?m not happy with this vote, [but] getting rid of this computer tax is essential.”
Sen. James Ed DeGrange, an Anne Arundel County Democrat who has voted against many tax increases, said he wanted more spending cuts, but “I?m going to support this because there is a three-year surcharge,” rather than a permanent increase.
Sen. Donald Munson of Washington County, the only Republican to vote for the tax increase, said “The wrath of God will come down on me tomorrow [but] what I?m trying to do with this vote is save my university.” The House of Delegates has held up $1 million in funding for a University of Maryland center in Hagerstown.
Senate President Thomas V. Mike Miller predicted passage in the full Senate, and House Speaker Michael Busch said the measure was “probably the best compromise that could come about, and we?ll make every effort to come up with the votes” to pass it in the House.
