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

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.

More from Pat Warren
  • Ronnie Adams

    Martin O’Malley…taxing us into prosperity!

  • Bernard Mc Kernan

    Tax & spend just doesn’t work forever. How about what Americans do when there’s no money, They stop writing checks & put away the plastic. Cut welfare, stop vouchers for section 8, free cell phones, food stamps & medicaid. Let these people get off their a….’es.

    • Lydia

      Bernard, I’m one of the many MD state workers who is off my a.. every day earning an income. Because of my pay, I was able to receive food stamps in order to be able to eat nutritious food on my poverty-level, MD State-earned income. I also have mediocre health insurance for poverty-level residents, and have to pay $50.00 a month so that I can receive diagnoses’, but no treatment. Do you find this amusing, Bernard? This additional tax is what people with an annual income of 100k+ throw away on movies and dinners each year. Yes Bernard, there are hard working people out there who have been forced to seek the assistance you show such contempt for, because of people like you. To all of you reading, keep in mind that poverty does not discriminate. You, too, could end up with nothing at the drop of a hat.

      • ballsohardclub

        Lydia, Thank you for your response. I would like to add a few hints in order to emblish on my statements. I- Stay in school & get a good education instead of hanging on the corners. 2- Don’t have children before marriage otherwise your chances of being in poverty are 80% greater. My health insurance is more per month than your rent or food bill. Do you have hair extensions, cell phone or other government subsidized goodies that we have to pay for you?…Now STFU & get educated.

      • Lydia

        I take it you’re in your mid-twenties and think you know everything about life. I’ve proven that I’m much more well educated than you can ever hope to be. You’ve completely misinterpreted the entire context of this comment. You’re proving my point that people like you are the essence of the problems in our country. Does your response indicate anything which is being discussed? No, you have said nothing worth listening to. This is worth hearing: People who need to flaunt what they spend on health insurance at the expense of somebody has less, are only cowards. You’ll learn this one day with the wisdom of age and experience. Until then, stop believing you have the right to tell anybody what to do, or when to speak. Be thankful of how fortunate you are to have even the basics in life. I imagine you have no clue what I’m talking about, and that’s okay. Please look up the definition of contempt, and God bless.

      • Jikaman

        It is the not the amount of money it is the principal, no one should have to pay more taxes than others to help out the less fortunate. Why penalize a familt or individual for being successful or making the most oout of his or her life.
        That is the problem with America everyone wants and thinks they deserve handouts and free money for not working and or being less fortunate and not making enough money than others. It is a flat out joke and ignorance on our government to be doing this.

      • Lydia

        And again, I have to ask how badly that additional $191.00 annually will harm you?

      • Kim Cluney

        Seriously? A family with both parents working can meet the threshhold for this tax increase. You’re talking about teachers, firemen, policemen, and other jobs, not by any means “rich.” My husband and I would meet that limit with our 2 jobs, and we’re certainly not throwing money away on movies and dinners.

    • independent

      Lydia, you’ve responded graciously in the face of some harsh and unwarranted words.

      Keep up the good attitude.

  • Randy Peel

    Democrats solution to everything: Tax and Spend.

  • Matt

    How about making state workers do their jobs flexibably. They will make any excuse not to work. Just yesterday, I encountered an MTA mobility driver that refused to let someone off because there was a car illegally parked so that they could not pull up 3 feet, even though it was safe to deboard passengers, then refused to pick up a man in a wheel chair. Or when asking state workers to send information in an email, refuse (probably because they don’t want to learn how to use computers at their job). These kind of things would not be a problem woth private sector employees, they would learn to rub 2 brain cells together and work out solutions to their problems.

    • Lydia

      Matt, Americans face this issue of laziness in every workplace, not just the State government. Remember the saying, “If you’re going to anything, do it well.” ? What’s happened in our State workplace’s is the fault of those in charge. Employees simply carry on the traditions they work in. It’s much less work to do the wrong thing, but it depends on who lets you get away with it. Wouldn’t it be nice to see a sweep of all MD government offices, and remove those who should not be serving the people in MD? Unfortunately, lazy workers are the few who stand out and ruin it for those who give 100%.

    • independent

      My comment disappeared.

      Let experienced older workers keep job security with part time employment. Older workers can get the job done in half the time, so let them!

  • George Helm

    He’s got nothing to lose and doesn’t care as if Obama wins a second term he will probably move on to a federal appointment as he has served his term for supporting Hillary. If Obama doesn’t get in he will wait until a new governor , surely a dem. , will get in and Miikulski will retire and O’Malley will be miraclously appointed to fill out her term as Senator! Same old problem in this East Coast Calif. type state, out of control spending and a one party system!

  • roget's

    I wonder what the cap on deductions will do to charitable giving within the state!

  • RogerC

    I’m interested in these 51,000 new jobs, mostly in construction. How many of these jobs will be fulfilled by illegal immigrants and not tax paying Maryland residents? And here’s how the state will get away with it. The state will award a contract through the bidding process and the contractor will engage with a subcontractors who 1099 illegals. Everyone makes out, O’Malley, the contractor, and the illegals. However, the state never sees revenue from employment taxes, income taxes, and the money is sent back south of the boarder. Great plan!!!

    • Meeeeee

      The question are they jobs or workman hours? Look at how the words are twisted to get to the truth.

  • inmy_opinion

    Tax the rich and they will move out of state. Leaving behind nothing but poor welfare recipients.

    • Lydia

      I highly doubt $191.00 a year will make people leave their McMansions…..

      • Steve

        Exactly Lydia. $191.00 less on a tax return to someone making over $150,000.00 a year is nothing. To someone trying to grow in an economy that isn’t making less than 40,000.00 a year, 191.00 is a lot of groceries to survive and feed their kids on. If you would ask most people making over 150k a year, they would be more than happy to give up that 191.00 to ensure that other people can have some very basic essentials. Its the tightwads that walk by homeless people as if they were garbage on the street that are complaining about it. The ones with the me first attitudes.

  • KottaMan

    Already made my mind to move out after a lifetime in MD. This governor is mentally ill and obviously totally disconnected from the “other Maryland” that he does NOT represent. I will not go down with his ship and refuse to be taxed and fee’d any further.

  • Paul Chiericoni

    I’ve been a Democrat all my life, because I believe we should help those that need help, the millionaires don’t need help they already help themselves enough. But I must say O’Malley has lost his mind…Why does he believe that raising taxes for unneccesary projects will spur growth… rediculus. For infrastructure projects, perhaps, but not for Teachers pensions. O’Malley should take a page out of Delaware’s play book, and consider lowering taxes on corporations that more here. You might also want to consider spending cuts, instead of tax increases, or the next job he get elected to will be dog catcher.

    • Scott

      Paul, this is the part that most aren’t getting. The tax increases in Owe’Money’s budget isn’t going to pay for welfare programs, its to pay for pet projects that “he” feels will better Maryland in the future. You know, like the MD-200 “improvement” that everyone in the state has to pay for, but only a few will use. The increases in fees and taxes are due mainly to the states inability to slow the spending and balance their books. Dipping in to the transportation fund and draining it for other programs and then asking tax payers to refill it is a result of total mismanagement. Reducing taxes and fees will open the flood gates for businesses and new residents and increase the money the state brings in.

  • Keets

    Just like a poker game, it’s only fun so long as everyone has a few chips to play with, but once the government and big biz have all the chips, the game ENDS. It ends, Mr. O’Malley.

  • Ken

    Well thanks to Casa De Maryland much of the money earned is now going into feeding, providing medical care, homes, and education to thousands of illegal immigrants. This money is coming from your taxes and instead of going to state revenue is being siphoned of to people who have no intentions of ever paying a penny into income tax. I myself wonder how it is they are being allowed to vote etc. and support OWE Malley if they are here illegally. He also before has mentioned they pay taxes. How would they do so without have a valid (non-stolen) social security number? Many things the gov refuse to answer for or acknowledge.

  • MD DAD

    It seems like those making over 150,000 a year ( I don’t make a sixth of that amount) are kinda of like being penalized. That’s not really being fair. If there was a provision on the tax form to give more, like the Chesapeake Bay Fund, that would be different. It is not the point of how much money it would cost higher earning taxpayer. It’s the gull that he always exhibits on going about it. Why else would he be delivering his fake “I’m sorries”..

  • So True

    MD DAD
    You hit the nail right on the head. I couldn’t have said it better!

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