Maryland senators are exploring broader cuts to the state budget due to resistance to some of Gov. Martin O'Malley's tax proposals, Senate President Thomas V. Mike Miller said Tuesday.
The Senate is putting together a “doomsday” budget plan, which focuses on making steeper cuts in case lawmakers can't agree on the Democratic governor's budget plan, which includes a variety of tax increases, Miller said.
“We're going to give the body the opportunity to do either one, either doomsday or continue to have the state make progress,” Miller, D-Calvert, told reporters after session.
Senators also are looking at different revenue proposals than the ones proposed by the governor, the Senate president said, underscoring the difficulty of addressing a $1.1 billion budget deficit after years of lean times in the aftermath of the recession. In addition to balancing the budget for the next fiscal year, lawmakers also are aiming to cut the state's ongoing deficit in half this year.
“This is going to be a session where it's going to be profiles in courage or profiles in hell, one of the two,” Miller said.
The Senate is taking up O'Malley's budget proposal first this year before sending its version of the next fiscal year's budget to the House of Delegates. Differences between the two chambers will have to be addressed before the General Assembly adjourns April 9.
Miller specifically mentioned reluctance to embrace O'Malley's plan to cap state income tax deductions for people who make more than $100,000. In O'Malley's budget, a Maryland taxpayer whose federal adjusted gross income is more than $100,000 would see a 10 percent reduction in the amount they could claim in state income tax deductions. An earner making more than $200,000 would see a 20 percent reduction.
Mortgage interest accounts for the largest amount of Maryland itemized deductions, comprising about 51 percent of them. Charitable contributions make up the second highest amount, or about 17 percent. Property taxes come next at about 14 percent.
While he doesn't like reducing the deductions, the changes would only affect about one in five Maryland taxpayers, O’Malley said.
Miller also noted that Maryland counties are unhappy with the governor's proposal to split teacher pension costs with counties. The plan would shift about $239 million in teacher pension costs to the counties. The state currently picks up the whole expense of teacher pensions.
The Senate president said the budget debate is very challenging, because the executive branch, the House of Delegates and the Senate have different ideas about how to tackle the state's budget deficit.
“Unlike in yesteryear, democracy has sort of come to the state of Maryland,” Miller said. “It's not one person saying this is what's going to happen and that's what happens, so we've evolved to now everybody has their own independent thinking.”