Resistance to Maryland Gov. Martin O’Malley’s proposal to cap income tax deductions for residents earning more than $100,000 has pushed the General Assembly’s leaders to consider other ways to fill the state’s $1.1 billion budget hole.
The state Senate will consider alternative revenue options and cuts in case lawmakers in the majority-Democrat chamber don’t agree to O’Malley’s plan, Senate President Thomas V. Mike Miller Jr., D-Calvert and Prince George’s counties, told reporters Tuesday. Among the plans Miller plans to send to the Senate floor is a “doomsday” plan that balances the budget with more severe cuts than O’Malley has proposed.
| Gay marriage bill advances in Senate |
| Maryland’s same-sex marriage bill goes to the state Senate Wednesday after the Senate Judiciary Proceedings Committee voted 7-4 to move the bill forward. |
| The bill, proposed by Gov. Martin O’Malley, passed the House of Delegates on Friday, with a vote of 72-67. |
| If passed in its current form, the bill would be effective as of January 2013, thanks to an amendment added by the House. The delay gives opponents time to put the bill on the November ballot, as they have said they intend to do. |
| The Senate passed a similar bill 25-21 last year, but it died in the House. |
“We’re going to give the body the opportunity to do either one, either doomsday or continue to have the state make progress,” Miller said.
The governor’s proposed budget raises an estimated $182 million — more than half of the $311 million in new revenue proposed — by capping deductions at 90 percent for residents who earn more than $100,000 a year and 80 percent for those who earn more than $200,000. Exemptions would be eliminated for singles earning more than $125,000 and couples earning more than $175,000.
About 51 percent of Maryland itemized deductions are mortgage interest. Charitable contributions make up about 17 percent, while property tax deductions are about 14 percent.
The changes would apply to about one in every five Maryland residents, O’Malley has said.
However, about one-third of the Marylanders who earn six figures live in Montgomery County, where the changes would apply to 118,133 households, or 28 percent of the households in the county, according to county Department of Finance Director Joe Beach. By contrast, the county accounts for 16 percent of the state’s population.
The majority-Democrat House also is looking at other ways to balance the budget.
“We’re working on alternatives to the governor’s proposal, seeing where we can get votes,” said House Speaker Michael Busch, D-Anne Arundel County. In addition to considering various cutbacks, Busch said he is looking at defining “high-end taxpayers” as those earning more than $250,000 a year, rather than those earning $100,000.
The proposal’s disproportionate effect on Montgomery County has prompted heavy criticism from local residents.
“It’s very easy to be bold when all you have to do is raise taxes,” Joan Fidler, president of the Montgomery County Taxpayers League, told The Washington Examiner. “They’re taxing the very people who are providing the revenues to the state.”
Calling O’Malley’s plan “socialistic,” House Minority Leader Anthony O’Donnell, R-Calvert and St. Mary’s, said he is opposed to any proposal that raises taxes.
“What we should be doing is creating jobs,” he said. “The way we grow the economy is by reducing tax burden, not increasing it.”
The Associated Press contributed reporting.
