ANNAPOLIS, Md. (AP) — The meltdown of a Maryland budget compromise that would have raised income taxes to avert about $512 million in cuts overshadowed an uneasy bill signing ceremony with the Legislature’s presiding officers and Gov. Martin O’Malley, who now must decide whether and when to call a special session to try again.

The failure of the challenging budget package, which would have raised taxes on those making more than $100,000 a year, has Senate President Thomas V. Mike Miller talking about the need for a special session to address the cuts and other measures, such as a failed effort to expand gambling that he favored to help raise additional revenue.

The cuts don’t take effect until July, which is the start of the new fiscal year. O’Malley, however, declined to comment Tuesday on any plans to call a special session right away. Fatigue and frustration were clearly still present just hours after the end of a hard session where agreement was elusive on a variety of tough issues.

“The Legislature failed to enact an operating budget that was anything like the plan that either house came up with, and it was pretty far away from the plan that I submitted to the Legislature — which is really a damn shame — because we had the ability, and I think that the people of our state had the will, but our leaders weren’t able to come to the consensus necessary to protect education,” O’Malley, a Democrat, said.

While Republicans championed many of the cuts in an alternative budget plan, the reductions are clearly unpalatable to Democratic lawmakers who control both the House and Senate.

Education funding, which has been a top O’Malley priority despite constraints caused by the recession, would take the biggest hit in the so-called “doomsday” budget that ended up taking the place of the failed revenue package, unless O’Malley calls a special session to make adjustments to the state’s $35.9 billion budget.

One big piece of the overall cut would come from eliminating the Geographic Cost of Education Index, which helps parts of the state where schooling costs more. That would save $129 million. Public higher education would be cut by 10 percent to save $38.5 million. Community colleges would lose about $20 million in state funding.

State employees also would feel the pain. Cost of living adjustments for state employees would be cut, saving $33.8 million. There would be 500 state jobs eliminated to save $30 million. Health insurance costs for state employees also would rise to save $15 million. Another $12 million would be found by eliminating the delegate and senatorial scholarships lawmakers have held onto for years. Operating expenses for state agencies would be reduced by 8 percent to make up about $50 million.

Miller said the idea behind the “doomsday” budget plan was to build support for the revenue package. While it didn’t work the first time, he suggested it would now that lawmakers know the threat is real.

“If you don’t have the chutzpah, the nerve or the guts or the gumption to pass taxes, that’s what’s going to happen, OK? And that’s what happened,” Miller said. “So, now maybe those people who don’t want to vote for revenues will say: ‘We’ll come together. We’ll make it happen.'”

The Senate president also said he was optimistic a revenue package and perhaps other measures could pass in a short special session, after lawmakers and the governor’s staff have a chance to take a break.

“We’ll get it done in a one or two-day session and everything will be fine,” Miller said.

O’Malley, however, was clearly frustrated by the breakdown Monday night. The governor noted the budget’s negative implications not only on K-12 education, but also on higher education and public safety.

Local law enforcement grants would be eliminated to save $20.8 million.

“So sadly, the operating budget was pretty much the low point in my experience here,” O’Malley said, adding that he didn’t believe it was due to any lack of work by his staff, including T. Eloise Foster, the governor’s budget secretary, and lawmakers who didn’t lose focus.

House Speaker Michael Busch, who criticized the Senate for focusing too much on gambling legislation at the expense of concentrating on the budget package, said he couldn’t pass the revenue piece of the package without a vote by the Senate.

“I learned one thing when I played sports,” Busch, D-Anne Arundel, said. “If you don’t have the ball you can’t score a touchdown. If you don’t have the revenue package, you can’t make a vote on it.”

Miller noted that the session had similarities to the 1992 session, when the General Assembly had to extend the session beyond the scheduled last day. In that year, lawmakers grappled with a gas tax increase — the last year it was raised in Maryland — and taxes on the wealthy. Lawmakers were taking up the same tough issues this time.

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


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