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Revenue In O’Malley’s Budget Plan To Come From Caps On Income Tax Deductions

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ANNAPOLIS, Md. (WJZ) — Governor Martin O’Malley rolls out a budget with a price tag for Maryland families and local governments.

Political reporter Pat Warren explains he’s calling for tough choices and says it won’t be easy.

In years past, the O’Malley administration has steered away from direct hits on state income taxes. But this time, families he describes as high earners– those who make more than $100,000– are in the crosshairs.

“A family of four earning $150,00 would pay $191 more or see $191 less coming back in their state refund check, as a practical matter,” O’Malley said.

“It’s a little bit scary for someone like me because I am a family of four. I have two children and a husband and we have two working people,” Frederick County’s Republican Del. Kathy Afzali said.

Afzali sees drawbacks to the governor’s plan.

“I am hoping that we can stop it in its tracks,” she said.

It affects about 20 percent of state taxpayers and raises $182 million for the state.

“I don’t like asking for this,” O’Malley said. “I don’t like doing this. There are many unpleasant aspects of this responsibility but in order to get us through this recession in advance of other states, in order to protect the priorities of the people of our state and the futures of our children, there are difficult things we need to ask of one another in these difficult times. And this is one of them.”

Teachers who rallied in Annapolis last year to save their pensions will see local governments footing part of the bill.

“I believe this is a way to settle a long lingering issue. I believe that it’s equitable, I believe it’s fair,” O’Malley said. “Wish that times were such that we did not have to do it, frankly.”

It’s going to cost local governments $240 million. The governor is also proposing to raise $21 million from Internet sales tax and put an online lottery in operation which could generate $2 million in the first year.

The General Assembly can cut the governor’s budget but it can’t add anything to it.

The governor did not elaborate on a potential gas tax increase, telling reporters he’s saving that for another day.

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