By Barbara Pash
A group of six senators unveiled on Tuesday a package of bills designed to raise an estimated $827 million in new revenues to help take the sting out of budget cuts proposed by Gov. Martin O’Malley.
“The plan is intended to expand the conversation about balancing the budget and to reduce the pain in the budget cuts,” said Sen. Paul Pinsky, a Prince George’s County Democrat and one of the senators behind the “Maryland First” plan.
The five bills that are part of the plan include tax increases for alcohol, cigarettes and gasoline, continuing a 6.25% tax rate on incomes more than $1 million, and a bill to close the “combined reporting” loophole for large out of-state corporations. The package also includes measures to improve tax administration.
“The bills have been introduced by different legislators” this General Assembly session, said Pinsky, who is the lead sponsor of the combined reporting bill.
Sen. Jamie Raskin, a Montgomery County Democrat, said that combining bills in a revenue-enhancing plan “is an attempt to create a package” that would enable the state’s “continuing investment in the social infrastructure.”
Raskin said Maryland has the nation’s best public education system. The state has a solid reputation in public health for its mental health, disabilities and rehabilitation programs. It also ranks high in transportation for its smart growth expansion of mass transit along the Baltimore-Washington D.C. corridor and improvement of local roads..
“We don’t want [these to slip] because of lack of public interest. The package is a proposal to keep Maryland moving forward,” he said.
Besides Pinsky and Raskin, other senators backing the Maryland First plan are Sen. Delores Kelley, a Baltimore County Democrat; Sen. Karen Montgomery, a Montgomery County Democrat; Sen. James Rosapepe, an Anne Arundel-Prince George’s counties Democrat and Deputy Majority Whip; and Sen. Brian Frosh, a Montgomery County Democrat and chairman of the Senate Judicial Proceedings Committee.
In a joint statement, the six senators detailed their Maryland First plan. They propose to:
- Raise the gasoline tax by 12 cents per gallon, for $360 million in new revenue. The proceeds would go to public transit and local roads
- Raise the alcohol tax by 10 cents per drink, for $209 million.
- Raise the cigarette tax by $1 per pack, for $114 million.
- Close the combined reporting loophole used by big, out-of-state corporations to avoid paying state taxes. This would bring in nothing in fiscal year 2012, but $75 million in fiscal year 2013.
- Continue the 6.25% tax rate on annual incomes of more than $1 million, for $70 million.
- Make changes in the tax administration regarding compliance and other reforms involving out-of-state sellers, prepaid phone cards and vendor discounts, for $74 million.
In the budget process, Pinsky said that “the legislature can cut or remove budget cuts.” The senators’ statement spelled out where they want O’Malley to put the $827 million that would be generated by the plan in his FY 2012 budget. They are:
- $140 million to restore cuts in education and local government.
- $100 million to restore cuts and expand investment in health care.
- $227 million to reduce the state’s unfunded pension and retiree health liability “without breaking the state’s promise to its public servants.”
- $360 million for transit; $100 million for local governments, and $260 million for state projects.
“By bringing together these proposals, we hope to avoid a lot of injury to the infrastructure,” said Raskin.