Senate budget plan includes tax hikes for all, pension shift to counties

Senate Budget and Taxation Committee

Senate Budget and Taxation Committee acts on budget package.

By Len Lazarick

The Senate Budget and Tax Committee on Thursday sent a $35 billion budget to the full Senate that includes income tax increases for almost everyone and $600 million in ongoing spending cuts.

This fiscal 2013 spending plan includes a shift of teacher pension costs to county school boards, along with new requirements for county governments to fund public schools, allowing them to even disregard local property tax caps to do so.

Senate Budget and Taxation Committee Chairman Ed Kasemeyer, D-Howard, called it “a fair and equitable package.”

Senate President Mike Miller issued an unusual news release stating, “To create this package, we worked with our teachers, the counties and other affected groups to come to a package that is as fair as it can be.”

Miller’s release quoted the head of the state teacher’s union supporting the plan, as well as Baltimore County Executive Kevin Kamenetz, the only leader of a major county who was not vehemently opposed to the pension shift.

Complicated mix; some Democrats grumble

The package was a complicated mix of four different bills that included the doomsday budget unveiled Tuesday. Its $720 million in cuts would still be triggered if the senators failed to pass the tax hikes. “We’re asking people to be statesmen,” Miller told reporters earlier in the day.

There was a bit of grumbling from some committee Democrats about aspects of the package, but in the end all 10 Democrats and two of three Republicans voted for the budget, though all three GOP senators opposed the tax hikes.

Only Sen. David Brinkley, R-Frederick, voted against the budget, after losing an attempt to incorporate all the doomsday cuts into the budget plan.

“We still had an opportunity to have the budget grow at 0%,” Brinkley said afterward. Many of the “doomsday” cuts were similar to spending reductions he had proposed in past years.

Income tax hikes for most

As expected, a bill to hike income tax rates by a quarter of a percent offered by Sen. Roger Manno, D-Montgomery, was the vehicle for all the tax hikes. The bill rolls back a 15-year-old tax cut engineered by Gov. Parris Glendening.

After some reworking, taxpayers making less than $75,000 would not pay the full amount, and many lower income workers would get higher tax credits.

Also added to the Manno bill was the governor’s proposed sales tax on Internet sales with some connection to Maryland and a doubling of the tax on cigars and other tobacco products, except for high-priced premium cigars. The committee rejected Gov. Martin O’Malley’s proposed sales tax on digital downloads and purchases of gold coins and bullion.

The tax hikes will raise over $600 million. The tobacco tax, which would be among the nation’s highest for cigars, is designed to pay for more health care and cut the use of small cigars by young people, advocates say.

Sen. Ed DeGrange, D-Anne Arundel, said there were “a lot of things I don’t like” in the tax measure, but “we don’t have a lot of choices…. We do need to balance our budget for today” and into the future.

The committee did a series of small cuts to the governor’s spending as recommended by its subcommittees.

The Maryland Association of Counties prepared a chart comparing the committee actions to O’Malley’s original proposals.

About The Author

Len Lazarick

Len Lazarick was the founding editor and publisher of and is currently the president of its nonprofit corporation and chairman of its board He was formerly the State House bureau chief of the daily Baltimore Examiner from its start in April 2006 to its demise in February 2009. He was a copy editor on the national desk of the Washington Post for eight years before that, and has spent decades covering Maryland politics and government.


  1. Whcampbell

    The Governor and the General Assembly are pushing Maryland over a fiscal cliff!  The downward economic spiral will continue, and as the Federal budget is cut we will feel the brunt of the reductions.  When the feds catch a cold, Maryland gets pneumonia.  The “sheep” who continue to vote for “Kleptocrat” incumbents, ensure that we all will be sheared. 

    • abby_adams

      For far too long MD legislators have been complacent: passing mandates without funding; using Fed stimulus $$ to prop up the budget while tax $$ didn’t flow in; giving goodies to selected constituencies for favorable votes; & paying lip service to a declining private sector work force. MSM tells us that the shearing is necessary but really won’t be much. Don’t we want fantastic roads & bridges? Don’t we want to stay #1 in education? Don’t we want policemen, firemen & teachers to be on the job when we need them? Freebies for all that need them from health care to cell phones to college discounts? If you don’t swallow this propaganda hook, line & sinker you are labeled as an uncaring, selfish — (fill in any derogatory word that comes to mind). Term limits in Annapolis would help. But these people are not totally stupid. They really want the power perks & will fight like h-ll to keep them.

  2. Dale Mcnamee

    I think that every Senator, Delegate, and state employee should be taxed more since they’ll benefit the most from the “increased revenue”…

    • millsmd

      Every state employee will benefit the most from “increased revenue”? Most state employees are getting screwed, take my word on that.
      Now Delegates, Senators and Judges? Yes, they have it better than most other state employees.

  3. elkridge reader

    Look at it this way.  Governor Jack O’Malley and your legislature think that not spending more of your money is like “doomsday”.  Jack  thinks that spending more is the “hard choice” and the senate pres thinks that spending more is “courageous”.   1 senator voted against this budget.

    Please, vote responsibly. 

  4. abby_adams

    I have a suggestion. Let’s ask the legislature, especially Miller & Busch, to take the lead & give up their perks. Ditto for the perks allowed to other high profile state officials. Show us how you are slashing the budget by practising fiscal restraint in the State House. Evidently these leaders care little about the outcome of working families in Maryland otherwise they would roll back spending & not initiate any new revenue demands from us. 

    When is enough, finally enough? For this crowd, it’s as long as we have one penny left in our pockets!

    • Dale Mcnamee

       And they keep on being re-elected by their moronic constituents who believe the “crap” that they spew…

      • abby_adams

        I don’t think most people are stupid, just lazy abt getting involved in this battle. When confronted concerning a penny here, a dollar there, they say ”What’s the big deal?” until they go to the grocery store, or fill up their gas tanks, or receive a notice from their mortgage co abt expense account increases to cover higher property taxes. The net amount on their paycheck remains the same, yet the money that once covered bills & expenses doesn’t cut it anymore. The Dems in Annapolis will keep hammering the average working man & woman unless we speak up & tell truth to power. We’ve had enough of Chicken Little propaganda abt budget slashing & higher taxes/fees/tolls while the state budget continues to accumulate a $1B deficit year after year no matter how many $$ are extracted from our pockets.

        • Dale Mcnamee

           I agree that a good portion of Maryland voters are lazy…What I mean by “stupid” is the fact that the same people get re-elected again and again, to keep on raising taxes, fees and wasting money and when that happens, the whining begins…I don’t see the incumbents losing…

          Our so called “news” media focus’ on “sensationalism” and what I call “the happy puppy” stories… Not to mention shilling for the Governor…Sports reports get more TV time than reporting on legislation ( ” Sports Extra/ Unlimited ” Anyone ? ) … Just ask anyone about pro sports, especially about the Orioles & Ravens… You’ll get a more animated response… Let’s not forget “entertainment”… How much does anyone know about Whitney Houston’s death, etc. vs the actions of the Legislature that have direct effect on our lives ?

          It would be nice to see an engaged and active electorate who will “pester” the Delegates & Senators into cutting taxes and reducing government…Our opponents do so…Why can’t we take a page from their playbook ?

      • Kmg75

         Unfortunately, this people cater to the people who are in the thickly populated urban areas.  Who are the most populous at this time?  The people who can avail of the Maryland low income benefits.  It’s a viscous cycle.  This people who get elected make sure they take care of the prolific children makers who rely on the system.  The college educated people with jobs have to think twice before having a child if they can support and send their kids to college. The people who benefit from the system, no problem… The more babies, the more checks! 

  5. Me

    How about we stop being a sanctuary state?  That would save us quite a bit of money.

    • Dale Mcnamee

       I agree !

  6. Skip L

    But the judges get a raise, right? Because they are worth it!

  7. Jwcrockett

    We are screwed

    • Dale Mcnamee

       Given the makeup of the Maryland citizenry, I sadly agree …


  1. Press Coverage of Senate Budget Committee’s Decision Meeting, Pension Shift, Taxes, and Maintenance of Effort « Conduit Street - [...] MarylandReporter’s coverage of the meeting: The Senate Budget and Tax Committee on Thursday sent a $35 billion budget [...]

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