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Md. Panel Makes Progress On Income Tax Hikes

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ANNAPOLIS, Md. (AP) — With time running short, a panel of Maryland lawmakers made progress on Saturday on proposals to raise income taxes for people who make more than $100,000.

As lawmakers aim to balance the books for the next fiscal year and reduce an ongoing $1.1 billion deficit by about half, the panel worked to reconcile differences in legislation already passed by the House and Senate.

Senate negotiators accepted a proposal by House conferees on the income tax rates.

Single filers who make between $100,001 and $125,000 and joint filers who make between $150,001 and $175,000 will see their state income tax rate rise from 4.75 percent to 5 percent. Rates for single filers who make between $125,001 and $150,000 would rise from 4.75 percent to 5.25 percent. The 5.25 percent rate would apply to joint filers who make between $175,001 and $225,000.

Rates would rise from 5 percent to 5.5 percent for singles who make between $150,001 and $250,000 and joint filers who make $225,001 to $300,000.

Single and joint filers who make more than $250,000 would pay 5.75 percent.

Negotiators still are wrestling with a difference in reductions to tax exemptions. The Senate conferees would like to reduce them from $3,200 to $3,000 for three years for people who make $100,000 or less. House negotiators want to keep it unchanged. People who make more than $100,000 would see various reductions to their exemptions, and people who make more than $150,000 would have the exemptions phased out.

The two sides are close to agreement on tax increases on tobacco other than cigarettes. Taxes on “little cigars” would increase to 70 percent. Taxes on smokeless tobacco such as snuff would rise from 15 percent to 30 percent. There would be no change for premium cigars.

“I think we’re 90 percent there,” said Sen. Edward Kasemeyer, who represents parts of Howard and Baltimore counties, referring to the tobacco taxes.

The two sides also were nearing agreement on a plan to begin sharing costs for teacher pensions with counties by phasing in the split over four years. The plan would shift about 50 percent of the split in the first year, 65 percent in the second, 85 percent in the third and finishing the split in the fourth year. The state currently pays the entire pension cost, which has gone up sharply in recent years.

The panel had planned to meet again Saturday night after session, but the meeting was postponed until Monday. The committee’s work will need to be formally accepted by the conferees and approved by the General Assembly before Monday’s midnight adjournment.

Meanwhile, the House and Senate spent a busy Saturday working on a wide variety of measures as the scheduled adjournment approached. A primary on Tuesday and religious holidays on the weekend have presented additional challenges to the last week of work in a difficult session that has been wearing on lawmakers.

Maryland is on its way to becoming the first state to ban an arsenic additive in chicken feed.

The House of Delegates accepted Senate amendments to a bill banning roxarsone, a chemical used to help chickens grow and fight parasites. Supporters of the legislation say the arsenic additive contaminates chicken meat and waste, polluting soil and the Chesapeake Bay. But opponents say the measure isn’t needed because Pfizer Inc., the company that makes roxarsone, voluntarily suspended sales of the chemical.

The Senate gave preliminary approval to doubling the state’s fee on sewer bills from $30 a year to $60, a proposal backed by Gov. Martin O’Malley.

The Senate rejected two amendments offered by Sen. E.J. Pipkin, R-Cecil. One would have put a firewall around the money raised from the tax to prevent the revenue from being used for purposes other than upgrading wastewater treatment plants.

The other amendment would have eliminated the tax in 2030, 18 years from now, when the work is expected to be complete.

The “flush tax” measure already has passed the House. The Senate version adds some changes that would have to be approved by the House, including an exemption for local fire departments.

Also, lawmakers are grappling with legislation to expand gambling in the state. A Senate measure would allow table games at the five casino sites now allowed under the law. It also would allow a sixth casino in Prince George’s County.

However, the House is working on taking a different approach by shaping the measure to allow table games like blackjack and roulette at the five casino sites and a location in Prince George’s– but not permit slot machines in Prince George’s.

If a measure expanding gambling passes, it would have to be approved by voters in a referendum.

The Senate passed a bill on Saturday afternoon to expand gambling — but without many of the details in the bill passed earlier by the chamber. Senate President Thomas V. Mike Miller, D-Calvert, described it as a backup measure.

“So if it passes on referendum, then we’ll have the ability to work out all the details next year,” Miller said.

(Copyright 2012 by The Associated Press. All Rights Reserved.)

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