Governor O'Malley Wants To Reduce Mortgage Interest Deductions On State Taxes

ANNAPOLIS, Md. (WJZ) -- Hang on to your wallets. The Maryland General Assembly is about to take action that's bound to cost you.

Political reporter Pat Warren explains some taxpayers are already up in arms.

Now is not the time nor, according to realtors and homeowners, will it ever be for Governor Martin O'Malley to reduce the mortgage interest homeowners can deduct on their state income tax.

"We have to fight this fight because once our opponents get a taste of success, gosh knows what they'll do," said one opponent.

In light of the O'Malley plan to cut deductions and exemptions, some Marylanders question whether the governor has the taxpayers' best interest at heart.

"I think we're going to have a problem. People aren't going to want to buy houses. They're going to want to rent instead of buy homes and then we're going to have a lot of problems with the economy and it's going to hurt the economy very much," said realtor Terry Levine.

"The recovery will slow down and it will probably take longer because when taxes get raised, it trickles down from the top to the bottom," said Will Marin, realtor.

"What do we gain from this pain being inflicted on our own citizens?" said Peter Franchot, Maryland Comptroller. "My question, of course, is what's the gain? What do we benefit? Why are we doing this to our own people?"

Senate President Mike Miller thinks reducing the deduction is dead on arrival.

"Both the House and the Senate leadership have expressed a displeasure with that proposal to the governor and we're looking for alternatives," Miller said.

With a budget to fund and a deficit to cut, choices have to be made.

There's also a feeling among some lawmakers that the governor may be asking too much. Miller has threatened to turn over what he calls a doomsday budget, where the budget is balanced by nothing but cuts.