ANNAPOLIS, Md. (AP) — Maryland would impose more than $70 million in fee increases for things like car titles and filing land records, and state employees would have to pay 2 percent more of their salaries to help preserve the state’s defined benefit pension plan under budget legislation passed Tuesday night by the state Senate.
The Senate voted 37-10 for the budget, with all Democrats supporting it along with two Republicans. The Senate also voted 37-10 for a budget reconciliation bill needed to balance the state’s books, with all but one Democrat voting for it. Three Republicans also voted for it.
The Senate rejected a series of Republican-backed changes to the legislation, including one that would have eliminated the fee increases by making cuts to education.
“What this amendment basically does is allow us to go home, look our constituents in the eye and say, ‘You know what, we didn’t have to raise those fees. We were able to do a relatively minor cut to the education budget,’” Sen. E.J. Pipkin, R-Cecil, said. “We’re spending $5.7 billion plus in the education budget. This is a small tiny part of that.”
Sen. Edward Kasemeyer, D-Baltimore County, said the fee increases were necessary.
“None of us like to have the inconvenience of paying increased fees, but the reality of it is that the fees mentioned in the (budget reconciliation and financing act) amount to about $75 million, and we need those fees to have this budget be balanced,” Kasemeyer said.
One of the biggest would double a titling fee on new vehicle purchases from $50 to $100, which would raise roughly $50 million. A surcharge on filing land records would rise from $20 to $40 to raise an estimated $17 million.
Pipkin also tried to strip out a provision that increases assessments on Maryland hospitals by about $300 million to pay for uninsured residents on the state’s Medicaid rolls. Senate Republicans have questioned whether the move could violate a unique agreement between the state and federal government. In Maryland, a state commission establishes how much hospitals can charge for their services and operates under a waiver from the federal government.
“It raises some questions,” Pipkin said.
Sen. James Robey, D-Howard, said the state has checked to make sure it doesn’t violate the state and federal agreement, and the Senate rejected the amendment.
“We have checked with the federal government. They are OK with this,” Robey said. “We are within the buffer that we have established still qualifying for the Medicaid waiver. There are millions of federal dollars at risk if we don’t do this.”
Pipkin also introduced an amendment that would have directed all of about $335 million in savings next year from pension reforms to the sustainability of the state’s pension plan, but the amendment was rejected. Currently, about $104 million of the money saved in the next fiscal year will go into the state’s $14.6 billion general fund to help pay for operating expenses.
Maryland has $19 billion in unfunded pension liabilities. The state is aiming to raise Maryland’s funding of the pension system from 64 percent to 80 percent by 2023.
The House of Delegates already has approved the budget legislation. Now, the two houses must work out the differences in a conference committee before the scheduled April 11 adjournment. In one difference, the Senate has proposed exempting rental car companies from paying the new titling fee, after companies protested the increase. The Senate also has proposed that the fee increase on property records only last for two years, instead of five years as approved by the House.
Earlier in the day, the Senate advanced a separate bill to increase the state’s alcohol tax from 6 percent to 9 percent over three years, by 1 percent a year. The tax would raise about $29 million in the first year. Baltimore schools would receive about $12 million of it, while Prince George’s County schools would get about $9 million in a one-time adjustment. Supporters say the two school systems have lagged behind other jurisdictions due to state funding formulas.
The Senate is scheduled to vote on the bill Wednesday. If the Senate passes the bill, it would then go to the House of Delegates for consideration.
(Copyright 2011 by The Associated Press. All Rights Reserved.)