UPDATE (5:59 p.m.)—Some Maryland residents will pay more taxes in the coming year under a plan worked out between Gov. Martin O'Malley and legislative leaders.
O'Malley, accompanied by House Speaker Michael Busch and Senate President Thomas V. "Mike" Miller, announced the nearly $35.8 billion plan during a Wednesday morning news conference in Annapolis to discuss the upcoming special session.
"To leave this budget incomplete, to leave this budget as it stands right now, would damage the very forward motion that all of us, together, have worked so hard to achieve for our state," O'Malley said.
"Progress is a choice," O'Malley said. "Job creation is a choice. Building America's number one schools, making a college education affordable, continuing to drive crime down to now a 35-year low, reviving and restoring the Chesapeake Bay and bringing the crab population back, all of these things are choices. Unleashing the healing power bio-technology and the jobs that come with that, eradicating child hunger, defending our triple-A bond rating—these things don't happen by themselves."
The proposed budget grows by about 2.6 percent over the current budget year that ends June 30. If approved, the state will end the fiscal year 2013 with a $204 million surplus.
Details of the proposed special session budget were limited to the 22 minute press briefing. No documentation or bill was available for review.
Republican Sen. E.J. Pipkin called the plan and the lack of details, less than a week before the opening of the session, "a trip to bizarre-world."
"We don't know what the bill is," said Pipkin, an Upper Eastern Shore Republican. "Is this any way to run a state?"
The legislature will reconvene in special session beginning May 14 to approve a new budget plan that will supersede the $35.5 billion so-called "Doomsday budget." That plan, that contained more than $500 million in cuts to schools, libraries and public safety, passed in the final hours of the 90-day session that ended in April.
"A cuts only approach would help no one and it would harm all of us," O'Malley said.
"The better approach is the balanced approach. An approach of cuts, investments and yes revenues to support those important on-going investments," O'Malley said, adding that the "Doomsday budget" was $71 million out of balance.
O'Malley said the special session will focus solely on the budget. The legislature will likely take up expanded gambling and a possible sixth casino for the state in Prince George's County in a session later this summer.
Increased gas taxes or an additional penny on the sales tax to go to transportation projects will also be considered at a later date, the governor said.
As part of the budget package under consideration, O'Malley said the state will make almost $600 million in additional cuts to the budget. Those cuts will be made to the current year's spending and in the budget year that begins July 1.
State budget Secretary T. Eloise Foster said the budget contains $247 million in additional revenues through increases in taxes and elimination of exemptions.
Under the proposed budget plan, taxpayers filing individually who makes $100,000 annually will see their tax rate increase from 4.5 percent to 5 percent.
Individuals making between $500,000 and $999,000 annually will see their rates increase from 5.5 percent to 5.75 percent.
Couples filing jointly and earning $150,000 will see rates increase from 4.75 percent to 5 percent.
Joint filers earning more than $500,000 will see rates increase from 5.5 percent to 5.75 percent.
"At the end of this session, approximately 16 percent of us will be asked to pay a little more or stated differently, will receive a little less back in state income tax refunds," O'Malley said.
O'Malley said the plan will also contain a shifting of a portion of the teacher pensions back to local jurisdictions.
"I would call it a pension sharing rather than a shift," O'Malley said. "The opponents try to make it seem as if the state was getting out of the business of education and shifting it to the counties. That's absolutely false and once this budget is concluded, it will be a full funding of public education."
Under that plan, the state will phase-in that shift over four years. When finished, O'Malley said the state and local governments will split teacher pension costs evenly.
O'Malley said the state also expects to save about $80 million in Medicaid spending as a result of changes in federal law.
Busch and Miller said they expect the session, which is expected to cost about $20,000 per day, to last three days.
Pipkin said he plans to propose an amendment that would further reduce the budget passed in April, essentially flat funding it at the current fiscal year 2012 spending levels.
"The budget we passed in April is $700 million larger than the previous year," Pipkin said. "We're going back to increase taxes and shift pensions to the counties. That's crazy."
Now, look back over the previous 4 decades and you see that tax collections have been remarkably stable considering the wide variations in marginal tax rates during those years. What this shows is that people indeed change behaviors when politicians monkey with marginal tax rates. It's similar to the idea that if a thief announced that he was going to rob you tomorrow, you might hide your valuables today. Libs don't seem to understand that. They assume that rich taxpayers will just continue to do everything the same while bending over for the government. France is venturing into this area with a new Socialist President that is proposing a top marginal rate of 75%. Anyone want to take a wager that they will collect anything close to what they think they'll collect? See also CA, whose deficit just exploded to $16 billion from a $9 billion prediction made 5 months ago. Just sayin'.
Hmmm, sounds like you are advocating violence.
I think Bush was an awful President for many reasons, but his tax cuts are not one of them. And I doubt it will surprise to hear that I think Obama is an order of magnitude worse than Bush. But I'm not worried about assigning blame for the current trouble...I'm concerned with getting out of it. I get the idea that some people (Piotr, and perhaps you) think the best way out is to close your eyes and let the government solve all our problems. All I want from the government is to get the hell out of the way...lower taxes, reduce regulations, and create an environment where the entrepreneurs of our society can create the jobs necessary to get people working again.
They finally pass the same sex marriage bill and then just a couple months later they set out to screw these folks at the wallet by creating a marriage penalty. All these years struggling to get the same sex marriage thing passed, and now they might as well just skip the wedding and stay shacked up instead.
@Piotr, why dont YOU MOVE back to socialist Europe and see what you get there. Maybe you can join all the other freeloaders complaining that the government has to cut back their socialist programs because they are out of money and need all the other countries that have a free economy to bail them out. You are a left winfg jackass (there I said it). You people don't have a clue. The reason is, OWEmalley thinks he is going to be president one day and he is such an idiot that even my VERY democrat family, Union leaders, etc in PA think he is an idiot (which he is). The only way to get rid of these "clingons" is to pass TERM LIMITS on ALL senate and congressial reps.
“Why dont YOU MOVE back to socialist Europe and see what you get there.” Well, mostly because I am an American and I like our democratically elected government here in Maryland. You are the one that seems to have a problem with democracy, so perhaps you might try some of the Middle Eastern countries – see how you like dictatorships. Term limits is an interesting concept, but I thought all you righties were against it (George Will rails against them). (Of course our governor is term limited, so you get another chance to put up someone brilliant like Erlich in two years.)
The inherent vice of capitalism is the unequal sharing of blessings. The inherent blessing of socialism is the equal sharing of misery -Winston Churchill
Only a fringe liberal would argue that one has an absolute right to make twenty children only to visit the upkeep of those children on his neighbor, or all of his neighbors (i.e. the taxpayer). Congratulations JustABill, you’re a fringe liberal. I will cling on to my conservative values of personal responsibility and counsel that one should sew one’s oats only to the extent that one can afford to take care of the resulting babies created. As far as taxation is concerned, of course the state contributes to schools and public safety (are you familiar with the State Police?). Please study the state budget! And finally, on the issue or communism, you just need to take a class or something (not rely on Fox News for your crude understanding). I have lived under communism. I escaped communism. Enough said.
So who are we talking about who voted that didn't pay any taxes. I think prisioners even pay taxes on money earned in prision!
You ask if I am familiar with the State Police and the answer is yes, far more than you will ever be in your lifetime and the same can be said for our state budget. Yes, money from the state budget is allocated to help fund police, fire, and schools, but that money is primarily sourced from Property Tax, through the counties and not the bag tax, not the tobacco tax, not the 200% increased highway, tunnel, and bridge tolls, and ultimately not the newly passed "rich people tax" either. Core essentials such as first responders and primary education are not the sources of most of our state's spending problems and a $1.5 Billion spending increase is not a Doomsday Budget. It's not even a bad hair day budget.