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Senate Narrowly Passes Tax Plan for $1 Billion in Revenue

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Special Report: Special Session 2007: Budget Crisis

By Bernie Becker and Rick Docksai
Capital News Service
Friday, Nov. 9, 2007

ANNAPOLIS - The Senate narrowly swatted away a Republican-led filibuster Friday, then passed a tax plan that will collect over a $1 billion of new revenues by a one-vote margin.

Senate President Thomas V. Mike Miller, D-Calvert, said the 24-23 vote on the tax plan will leave little wiggle room when the Senate reconciles its bill with the House next week.

"I'm hoping they can look at our package and say it's pretty good, because otherwise we're going to be here a pretty long time," Miller said.

The Senate avoided a long session Friday, however, voting to cut off debate by the bare minimum needed for cloture, a 29-18 vote. Five Democrats who voted to cut off debate then turned around and voted against the tax bill.

Senate Minority Leader David Brinkley, R-Frederick, said the "outcome was not really in doubt" after the filibuster was defeated.

The tax package was the core of Gov. Martin O'Malley's plan to bridge a $1.7 billion shortfall.

The final Senate bill would increase in the corporate income and vehicle titling tax, and raise the sales tax from 5 cents to 6 cents per dollar, all elements of the governor's plan.

But the Senate opted for a less-progressive income tax than O'Malley had proposed.

The Senate extended the sales tax to computer services and arcades, but removed landscaping from the package Thursday. It also added a "snowbird" provision, which allows the state to collect income tax from those living in Maryland as little as three months a year, which could bring in an additional $58 million.

Currently, residents have to live here six months to be taxed, the same standard as most states.

In a separate vote Friday, the Senate passed an amended version of the governor's proposed Medicaid expansion, which could cost the state $250 million over the next four fiscal years.

Earlier Friday, the Senate easily approved budget cuts that Sen. Ulysses Currie, D-Prince George's, estimated would save $500 million to $600 million. Education spending required under the 2002 Thornton law will be frozen, while over $40 million in government jobs were eliminated.

Currie said those cuts dwarf the $200 million in cuts proposed by former Gov. Robert Ehrlich, a Republican, in his first year in office. He added that Ehrlich consistently spent over his budget.

But Republicans continued to protest the package until the very end Friday, saying the bills had too many tax increases and spending and not enough cuts.

Sen. Lowell Stoltzfus, R-Somerset, said "we have an orgy on taxation and an impotence on tax cuts."

And Sen. E.J. Pipkin, R-Queen Anne's, called the health care plan "fiscal insanity," saying lawmakers were "throwing away" money.

Brinkley added that many Democrats were displeased with the package, but "drank the Kool-Aid" and voted for it for party unity.

But some Democrats needed more than Kool-Aid, holding out for more progressive measures before voting for the package.

Sen. Paul Pinsky, D-Prince George's, said that he and other Democrats "let leadership know" that provisions like the "snowbird" provision and adding $100 million in education spending were needed to win their vote.

"I guess we had a little leverage," Pinsky said.

Not all Democrats fell in line. Sen. Jim Brochin, one of four Democrats to support the filibuster, thought the final package was too tax-heavy but he was not surprised it passed.

"Mike (Miller) knows what he's doing," the Baltimore County Democrat said. "He knows what levers to pull."

The Senate now waits for what could be difficult meetings with the House as the two bodies try to hammer out a final package. The House will start taking up the bills Saturday.

The House Ways and Means Committee on Friday voted out more progressive tax measures than the Senate, including an even higher corporate and personal income tax rates. The committee also extended the sales tax to even more services.

Brinkley said what the House "is already working on is so distasteful."

Miller expressed concern Friday over the House's income tax and sales tax proposals.

"We're at the 50-yard line. The game's half-way over," Miller said. "Now we've got to see what the House does."

CNS reporter Andy Zieminski contributed to this report.

Copyright 2007 University of Maryland Philip Merrill College of Journalism

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