ANNAPOLIS – A coalition of Washington-area lawmakers is pushing a bevy of tax increases on alcohol, gasoline and cigarettes in Maryland — and the extension of the so-called millionaire’s tax — to restore $827 million in spending to Gov. Martin O’Malley’s budget for next fiscal year. Under the proposal from a half-dozen Democratic state senators, the gas tax would rise 12 cents a gallon, alcohol 10 cents a drink, and cigarettes would cost $1 more per pack. Those earning seven figures would pay a 6.25 percent income tax rate which, before it expired this year, encouraged the wealthiest residents to leave the state en masse for areas with more advantageous tax codes, critics said.
However, architects of the tax proposal insist that without new sources of revenue Maryland risks dramatic dips in funding for public education and already deteriorating, clogged roads. The state is facing a $1.6 billion budget shortfall.
Sens. Brian Frosh, Karen Montgomery and Jamie Raskin from Montgomery County, as well as Sens. Paul Pinsky and Jim Rosapepe of Prince George’s County, will attempt to cobble together 24 votes on a wide range of tax increases that not all Democrats will embrace.
Local leaders certainly will fight against the restoration of the millionaire’s tax.
“That would be troublesome for Montgomery County,” said County Executive Ike Leggett, referring to the “disproportionate” number of millionaires living in the area. “I would be very reluctant about any tax of that sort.”
O’Malley submitted a budget to lawmakers without any tax increases, a move that even some in his own party dismissed as a failure in leadership in light of plummeting revenue. The governor said he would be willing to sign off on tax increases passed by the legislature.
But Montgomery officials argue that the millionaire’s tax has deepened the county’s historic budget woes.
The county lost $4.6 billion in taxable income from tax years 2007 to 2008. More than 82 percent of that drop was from those earning more than $1 million, officials said.
The proposed new taxes would fund $360 million in road and transit projects, $227 million for pensions, $140 million in education spending and $100 million in health care costs.
