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Md. Alcohol Tax Increase Approved

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ANNAPOLIS, Md. (AP) — Maryland’s sales tax on alcohol will jump 50 percent in July, the state will have a new venture capital fund to help jump-start businesses and illegal immigrants will be eligible for in-state tuition under legislation approved by the Maryland General Assembly on Monday night.

Lawmakers worked in the waning hours of the session to pass some of its highest-profile bills. The alcohol tax increase will raise an estimated $85 million a year, with about $47 million going to school construction in the first year and $15 million set aside to help the developmentally disabled. Gov. Martin O’Malley said he would sign it.

“Part of it is being used to offset cuts which the General Assembly found unacceptable where education is concerned this particular year, but a large portion of it is going to fund treatment and to increase services for people with developmental disabilities,” the Democratic governor said.

Republicans objected to sudden changes made to the bill late Saturday night in the House of Delegates that allocates a large portion of the school construction money to urban and suburban areas.

“Is it based on need? No. Is it based on full-time equivalency? No. What is it based on? What it took to get out of the House,” said Sen. E.J. Pipkin, R-Cecil. “You know what, I don’t think that’s the way we should be dividing up nearly $50 million. I think it’s wrong.”

Two bills relating to the alcohol tax cleared the General Assembly. One of them includes an additional $9 million for Prince George’s County schools, $12 million for Baltimore schools, and about $1.4 million split roughly between Garrett and Allegany counties in western Maryland.

Another measure includes about $47 million for school construction throughout the state. Montgomery and Prince George’s counties as well as Baltimore city would receive $9 million each. Baltimore County would get $7 million; Anne Arundel County would receive $5 million; and Howard County would get $4 million. Allegany, Carroll, Garrett, Frederick and Washington counties would get a total of $750,000. Calvert Charles and St. Mary’s would receive $1.3 million. Eastern Shore counties, including Dorchester, Caroline, Kent, Queen Anne’s, Somerset and Talbot, would get a total of $1.3 million.

The governor’s initiative to create a venture capital fund called Invest Maryland also cleared the General Assembly. The governor’s original idea for the state to auction off $142 million in tax credits was scaled back to $100 million. The state would use the proceeds from the auction — up to $75 million — to invest in high-tech businesses.

The General Assembly also sent O’Malley a bill to grant in-state tuition rates to illegal immigrants who meet certain requirements. They would have to compete two years at a community college and show their parents paid state taxes for at least three years before they graduated high school.

A bill creating a new defense for people who use marijuana for medical reasons also passed. Maryland residents will be able to avoid a $100 fine and misdemeanor conviction if they are arrested with marijuana but have a doctor’s permission to use the drug for medicinal purposes. The measure also creates a study on how medical marijuana could be distributed in the state in the future.

With the Preakness Stakes set for next month, Maryland lawmakers struggled with legislation to allocate millions of dollars in state aid to help Maryland’s troubled horse racing industry. In the session’s last hour, lawmakers approved a bill that would lend up to $6 million to the Maryland Jockey Club and $1.2 million each to the owners of Rosecroft Raceway and Ocean Downs, near Ocean City. However, the funding is contingent on the Jockey Club, which owns Pimlico Race Course and Laurel Park — agreeing to simulcast races with Rosecroft.

Some priority legislation had already been approved before the day started.

Lawmakers agreed to changes in the state pension. The amount state employees pay for retirement will rise from 5 percent to 7 percent, starting on July 1. Monthly premiums for health insurance will rise from 20 percent to 25 percent, and a co-pay system will be maintained. The plan, which was proposed by O’Malley, aims to increase Maryland’s funding of its pension system from 64 percent to 80 percent by 2023.

Some high-profile legislation backed by O’Malley already has been shelved for summer study. Lawmakers had too many questions about a proposal to require state utilities to enter into long-term contracts to buy wind energy. Lawmakers also decided to delay a proposal embraced by O’Malley to crack down on septic system pollution.

“There were a couple of big proposals we had as part of our agenda, the size of which caused the legislature to choke and kick them to summer study,” O’Malley said Monday.

Senate President Thomas V. Mike Miller laughed at the comment.

“I think it would have been better if he’d have choked” before making a surprise announcement during his State of the State speech that he backed the restrictions.

(Copyright 2011 by The Associated Press. All Rights Reserved.)

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