By Rolando Garcia
ANNAPOLIS – A $1 billion tax package working its way through the House of Delegates is unlikely to clear the Senate and could imperil Democratic legislators from rural areas, said Senate President Thomas V. Mike Miller, D-Calvert.
House Speaker Michael Busch, D-Anne Arundel, unveiled a tax plan that includes a 1-cent sales tax hike 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.
The tax proposals will get a chilly reception in the Senate, which passed a smaller package of taxes and fees totaling $227 million. Without sufficient votes in either chamber to override Gov. Robert Ehrlich’s promised veto, Busch’s plan is an “exercise in futility” Miller said.
“Its no secret the majority of senators think (Busch’s tax plan) is premature,” Miller said, noting the 2005 budget can be balanced without major revenue measures.
As late as Friday, Busch was publicly noncommittal about what revenue measures he would support, but just hours after he publicly presented his plan Monday, it was approved by two House committees and will be debated on the House floor Wednesday.
The brisk pace has upset GOP lawmakers, who say Busch is trying to muscle through a massive tax hike with little deliberation.
“Legislation like this shouldn’t be rushed through at the 11th hour,” said Minority Whip Anthony O’Donnell, R-Calvert.
The showdown between Ehrlich and Busch was distracting from other tax measures that Ehrlich might agree to, such as the salty snack food tax and closing corporate loopholes, Miller said.
“I’m dealing with two jocks (Ehrlich and Busch) who are very competitive and used to getting their way,” Miller said.
The plan would cost the average Maryland family an extra $20 a year and would provide a more stable source of funding for education than slots, said Appropriations Chair Norman Conway, D-Wicomico.
“Nobody likes taxes, but education is a priority, and we have to pay for it,” Conway said.
Busch said a traditional tax increase was a more fair and responsible way to fund public schools than legalizing slot machines.
“I would suggest to you that that’s a better solution than asking Marylanders to gamble $23 billion a year at the racetrack, hoping to make $600 million a year to go to their education fund,” Busch told Baltimore’s Sun newspaper Monday.
Busch’s tax hikes will likely die in the Senate’s budget-writing panel, Miller said, and a conference committee between the two chambers could then try to hammer out a compromise on smaller tax measures more palatable to Ehrlich.
Ehrlich’s budget, which was approved by the Senate last week with only minor revisions, closes the $800 million budget shortfall mostly through one-time revenue sources and fee hikes. He has vowed to veto any sales or income tax increases, and supports legalizing slot machines to fix the state’s long-term budget woes.
Although the $23.7 billion 2005 budget approved by the Senate leaves a $170 million surplus, the state is facing a $1.2 billion shortfall in 2006.
Ehrlich submitted a $13 million budget revision Tuesday, which includes additional funding for health care and juvenile services.
Busch’s tax proposal, which barely avoided defeat Monday in the House Appropriations Committee after two Democrats switched their votes, also includes 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.
It also expands the sales tax to health clubs and tanning services.
The tax hikes could have political repercussions for Democratic legislators who represent moderate districts in rural areas and the suburbs, Miller said.
The plan would muster enough votes to pass the House, Conway said.
Many constituents in his rural district will accept a penny sales tax increase set aside for public schools, Conway said, and the predictions of dire political consequences for supporters of the tax hike may be overblown.
But if Miller’s predictions hold true, Busch would have to cobble together a narrow majority mostly with delegates from core Democratic areas such as Montgomery and Prince George’s Counties and Baltimore City, potentially alienating swing voters in other parts of the state.
“Voters trust (Democrats) on education and the environment,” Miller said, “but they don’t trust us on the economy.”
