By Rolando Garcia
ANNAPOLIS – The House of Delegates was poised to give preliminary approval to $1 billion in tax increases Wednesday during a late-evening session.
Delegates batted down on party-line votes a series of Republican-sponsored amendments to gut the tax hikes crafted by House Speaker Michael Busch, D-Anne Arundel.
Democrats and Republicans caucused just before the Wednesday night session, trying to line up their positions.
When House Appropriations Committee Chairman Norman Conway, D-Wicomico, emerged from the party meeting, he said he was confident the House would approve the tax package, but declined to speculate on whether it would get the 85-vote supermajority needed to override a promised veto from Republican Gov. Robert Ehrlich.
The tax plan includes a 1-cent sales tax increase earmarked for public schools, an income tax rate boost from 4.75 to 6 percent on Marylanders with incomes above $200,000 and an increase in vehicle excise taxes from 5 to 6 percent.
It also provides about $350 million in tax relief, lowering the state’s property tax rate from 13.2 cents to 5 cents per $100 assessment, and increases the earned income tax credit for poor taxpayers.
Although Democrats have a better than a two-thirds majority in the House, the margin of victory for the tax hikes was in doubt because moderate and conservative Democrats said they would vote against it, fearing voters’ wrath in the next election.
While there’s an effort to keep Democrats in line behind Busch, Majority Whip George Owings, D-Calvert, who opposes the tax hikes, said Democratic delegates from rural areas would have to break ranks with the House leadership.
“A lot of delegates just can’t vote for it, their constituencies wouldn’t stand for it,” Owings said.
Senate President Thomas V. Mike Miller Jr., D-Calvert, has declared the plan dead on arrival in his chamber and that pushing it forward without a veto-proof majority was an “exercise in futility.”
Republicans blasted the tax increases, warning they would hamper the state’s economic recovery.
Higher sales taxes would drive shoppers to neighboring states and the Internet and hurt small retailers in Maryland, said Delegate Christopher Shank, R-Washington.
Legislative analysts have estimated the sales tax increase would cost the state $600 million in retail sales.
Republicans also criticized the income tax increase for targeting the most successful and entrepreneurial Marylanders.
Democrats defended the tax hikes was a better way fund to public schools and fix the state’s long-term budget woes than legalizing slot machines, which Ehrlich has proposed.
“(The tax package) will fund education in a stable, responsible and non-addictive fashion,” said Majority Leader Kumar Barve, D-Montgomery.