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Assembly fails to pass tax bill, adopts 'Doomsday' budget

2012-04-10

http://articles.baltimoresun.com/2012-04-10/news/bs-md-sine-die-2012-20120409_1_doomsday-budget-special-session-tax-bill

Legislative leaders call for special session to resolve financial issues

  • Del. Frank Turner presents the gaming legislation to the the Ways and Means Committee on the last day of the General Assembly.
Del. Frank Turner presents the gaming legislation to the the… (Algerina Perna, Baltimore Sun)
April 10, 2012|By Michael Dresser and Annie Linskey, The Baltimore Sun

The Maryland General Assembly's regular 90-day session ended in disarray Monday at midnight as legislators failed to approve an income tax measure to which their leaders had agreed.

The lack of action meant that a so-called "doomsday" budget — balanced entirely through hundreds of millions of dollars of cuts — is in place for the fiscal year that begins July 1. House and Senate leaders said they would ask the governor to call a special session this week to allow them to take up a plan to increase income taxes to avoid the most severe cuts.

It is the first time since 1992 that the legislature has not completed its work on the budget during the 90 days.

Assembly leaders had reached tentative agreement earlier Monday night on a state budget for the coming year and an income tax increase to help pay for it.

But the full Assembly didn't manage to vote on the tax measure by midnight. A related measure — to allow a casino in Prince George's County and to permit table games at all casinos — was in trouble in the House of Delegates when plans to take up the tax bill were halted.

Early Tuesday morning, Gov. Martin O'Malley had harsh words for legislators. "This is not in keeping with what the people of our state expect of their legislature," O'Malley said.

Taking what appeared to be a swipe at Senate President Thomas V. Mike Miller — the architect of the gambling measure — O'Malley said, "The republic was not built on gambling gimmicks, bingo or bake sales."

Sometimes lawmakers have to put "egos and pet projects" aside in order to "advance the common good," the governor said.

He declined to say when he might call a special session. "They had 90 days to do the work," he said. "Exactly which steps we take on this score remain to be seen."

For his part, Miller said it was simply a matter of the clock running out. "We just ran out of time, there's nothing to get angry about ... I've seen it before, it's happened before. It's part of the legislative process."

He made clear that he expected a gambling measure, not just the budget and taxes, to be part of any special session. "Just the two issues, revenues and gaming, remain on the table," he said.

House Speaker Michael E. Busch blamed the Senate for dragging its feet on the revenue bills after it was clear the casino bill was failing. "I think it is pretty evident that our counterparts in the Senate slow-played all the revenue bills," Busch said.

Miller, Busch and O'Malley are all Democrats.

Senate Minority Leader E. J. Pipkin, an Upper Shore Republican, put the blame for the chaotic finish squarely on O'Malley.

"At the end of the day, there was a lack of leadership from the governor," he said. Pipkin said there's no need for a special session. "We have a balanced budget. We've done what was needed. Let's go home," he said.

Democratic budget negotiators had broken a deadlock Monday afternoon when the Senate gave in to the House position that individuals earning less than $100,000 and families making under $150,000 should not have to pay higher income taxes. Marylanders with incomes higher than those levels would pay from one-fourth to three-fourths of a percentage point more.

Negotiators had also reached an agreement on the $35 billion state budget — the one bill that the Maryland Constitution requires the legislature to pass. To help balance the budget, they agreed to a companion bill to shift part of the burden of teacher pension costs from the state to the counties over four years.

A key element in breaking the deadlock appeared to be the House's agreement to bring a bill to the floor to expand gambling in Maryland by allowing a sixth casino — to be located at National Harbor in Prince George's County — and allowing table games there and at Maryland's five already authorized slots locations. Then House leaders realized the needed votes were in question.

One piece of business that did get done Monday was the capital budget. Legislative gave final approval to a $3.6 billion capital spending plan that includes extra money O'Malley requested to pay for improvements to parks and schools and to encourage construction of rental housing.

The governor in effect asked the Assembly to agree to spend about $450 million now that it otherwise would have waited to spend in the next few years. He said the extra money would launch projects that would stimulate the state's construction industry.

The failed agreement on the operating budget came after a long day of recriminations and finger-pointing.

Miller had accused the House of intransigence. He said the Senate had passed a bill that would raise more than $400 million to close the state's persistent revenue gap — an amount he said would be enough for the foreseeable future. The House bill, he said, would raise too little to solve the problem.

Busch, meanwhile, had appeared at a news conference at which he called upon senators to focus on the budget and give up what he called their obsession with "a certain issue," which he later made clear was gambling.

Two of O'Malley's key initiatives won final approval earlier Monday. His bill to double the "flush tax" to improve sewage treatment plants and thus help clean up the Chesapeake Bay was passed, as was a weakened version of his proposal to curb the use of septic systems.

Overall, O'Malley had a more successful legislative session than last year, even though he didn't get everything he wanted.

Legislators gave final approval Monday to O'Malley's bill to limit septic systems, a measure aimed at curbing sprawl as well as pollution into the Chesapeake Bay. The proposal was weakened to give counties the final say over land-use decisions, but it will nonetheless require them to designate areas that are off-limits to septic systems.

Also Monday, the House gave final approval to O'Malley's bill to double the so-called flush tax from $2.50 a month to $5 per household, sending that bill to the governor's desk. The money will be used for upgrades to wastewater plants to protect the Chesapeake Bay. The measure excludes from the increase some residents of Garrett and Worcester counties, whose wastewater doesn't flow toward the bay.

A high-profile victory for O'Malley came early in the session when the Assembly approved his measure to legalize same-sex marriage in Maryland.

Rounding up the 71 votes needed in the House of Delegates took up much of the leadership's energy in the first half of the session. Supporters filled the chamber with cheers and tears when the gavel came down on Feb. 17. Within days, the governor signed the bill into law, though voters are expected to have the final say. Opponents are gathering signatures to hold a referendum on the law in November.

The same day the same-sex marriage passed in the House, senators also took a historic vote. They censured Sen. Ulysses S. Currie, a Prince George's County Democrat who failed to disclose that he was working for a grocery chain when he was seeking help for it from various state agencies.

michael.dresser@baltsun.com

annie.linskey@baltsun.com

Reporter Timothy B. Wheeler contributed to this article.

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