Lawmakers really, really want to repeal the computer services sales tax they passed in the wee hours of November?s special session. But they haven?t quite figured out how to replace the money they hoped to rake in.
“The vast majority of members” support repeal, said House Speaker Michael Busch. Even Senate President Thomas V. Mike Miller, once a strong defender of the tech tax a Senate committee proposed, now concedes there is “consensus that it should be repealed.”
Gov. Martin O?Malley, who hadn?t proposed the tax but signed it nonetheless, said two weeks ago he favored repeal and was inclined to support the higher income taxes he proposed on the wealthy.
“The problem is finding the alternative,” Miller said Wednesday. He and Senate Budget Committee Chairman Ulysses Currie said some combination of further budget cuts, tax increases and transfers from other funds are in play.
There is growing belief that with the session ending in 11 days, a repeal deal might be worked out over the next 72 hours.
O?Malley, Busch and Miller met Tuesday night. O?Malley spokeswoman Christine Hansen said further meetings on the topic were likely, though none had been scheduled.
The choices are unpalatable. Taking some of the sales tax increase dedicated to transportation is one option. But Busch points out more than $90 million in the budget just passed was money originally designated for transportation, and money for highways often leverages an even larger amount of federal bucks. And Miller points out Gov. Robert Ehrlich took a lot of grief for raising the transportation trust fund.
Cutting back on new programs is also unpopular. Funding new programs for the Chesapeake Bay, health insurance coverage and schools motivated some votes for higher taxes in the special session.
Higher taxes, particularly higher income taxes, are the least palatable of the likely alternatives. “I don?t think there?s anyone here that is gleeful about revisiting the issue,” Busch said.
The Tech Council and IT folks supported the income tax increase as a tradeoff for repeal. But House Republican Leader Anthony O?Donnell points out that the IT tax was the deal other business groups had traded for the sales tax proposed on their services.
Republicans continue to support budget cuts over tax increases, but Democrats “have super majorities,” said O?Donnell. “They can do anything they want.”
They just need to come up with 24 votes in the Senate and 71 in the House to do it.
