House panel cool to Senate tax hikes
Teacher-pension bill accelerated
ANNAPOLIS | A Maryland House committee voted Monday night to significantly dial back a set of income-tax increases approved last week by the state Senate.
The House Ways and Means Committee voted to eliminate any incometax hikes on single residents making less than $100,000 a year and on couples earning less than $150,000 from a Senate plan that calls for nearly acrossthe-board tax hikes affecting every income bracket above $3,000.
In addition to giving relief to many middle-class residents, the committee also killed the Senate’s so-called “half-millionaire’s tax,” which would have imposed a flat 5.75 percent tax rate on every dollar made by residents earning $500,000 or more.
The Senate approved the flat tax last week as part of a bill that would have raised tax rates on nearly every tax bracket and netted the state more than $400 million in revenue next year.
Ways and Means Committee members said their income-tax increases would only generate $191 million, but would include the revival of a proposal to reduce the value of personal exemptions for the state’s highest earners.
While the panel deliberated Monday night, the House Appropriations Committee also approved changes to the Senate’s plan for shifting teacher-pension costs to counties, opting for a three-year phase- in rather than the Senate’s recommended four-year plan.
The House proposal would reduce state expenses by requiring counties to take on an extra $137 million in costs next year. The Senate plan would have only forced them to pay $68 million next year.
Maryland is one of a handful of states that pays teacher-pension benefits without help from local governments, and critics have long argued county governments that set salaries and benefits should take on some of the burden.
“This is an important action,” said Delegate John L. Bohanan Jr., St. Mary’s Democrat. “We’ve been talking about this for a long time, and we’ve got to do it to keep our state budget balanced.”
The income-tax and teacher-pension proposals are part of a Senate-approved, four-bill budget that the full House will debate and could approve as soon as the end of this week.
Representatives from the House and Senate will then likely have to meet in a conference committee to settle the differences in their plans.