House Passes Budget Measure In Special Session

ANNAPOLIS, Md. (WJZ)— The special session ends with tax hikes for thousands of Marylanders after the General Assembly approves a budget package that avoids painful cuts to education and public safety.

Political reporter Pat Warren explains what happens next.

Some Marylanders will be writing bigger checks and getting smaller tax refunds.

Gov. Martin O’Malley takes in the sun at a public event while his tax hike foes rake him over the coals.

“The governor ran around this session, talking about every manner of tax increase. He wanted a sales tax increase. He wanted a gas tax increase. I couldn’t keep track of what proposal he was proposing next,” said House Minority Leader Del. Anthony O’Donnell.

On Wednesday, O’Malley got an income tax increase — although the proposal originated in the House and that’s where it got final approval.

“Eight-seven percent of the people of the state of Maryland will have no increase in their taxes. And those who do and who make a quarter of a million dollars, they will be paying  6 and a half dollars a week extra,” said House Majority Leader Del. Kumar Barve.

Single filers will see no increase up to $100,000. Taxpayers filing jointly will see no increase up to $150,000.

One dollar later and the hikes kick in at increments of a quarter percent.

So if you are a two-wage earner household making $150,001, your rate increases to 5 percent. At $175,001, it’s 5.25 percent. At $225,001, it’s 5.50 percent. And anything over $300,000 will be taxed at 5.75 percent.

“These have not been easy years,” O’Malley said.

The income tax increases are intended to avoid a so-called doomsday budget that called for $500 million in cuts that the General Assembly passed in its regular session.

The bills passed Wednesday include a tax hike on small cigars and smokeless tobacco and a transfer of payments of teacher pensions from state to local governments.

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