Md. House Passes 50 Percent Increase in Alcohol Tax

Md. approves in-state immigrant tuition

By BRIAN WITTE and TOM LoBIANCO
|  Monday, Apr 11, 2011  |  Updated 9:57 PM EDT
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Md. House Passes 50 Percent Increase in Alcohol Tax

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Maryland lawmakers scrambled to resolve a variety of unfinished business before Monday's midnight adjournment of the General Assembly, including a measure to raise the state's sales tax on alcohol by 50 percent.

Legislation to allow in-state tuition for illegal immigrants also passed the General assembly, but millions of dollars in grants and loans needed to save horse racing in Maryland were in jeopardy in the legislature late Monday.

The House passed a bill 78-62 Monday afternoon to increase the alcohol tax from 6 percent to 9 percent in July to raise about $85 million a year to help pay for school construction next year, while providing millions of dollars for the developmentally disabled. Democrats say the money is badly needed, but Republicans decried the measure for forcing a new tax on Maryland residents during tough times and allocating little school construction money to rural areas. The GOP also attacked the process of making quick and dramatic changes to legislation late Saturday night on the second-to-last-day of the session that will affect businesses and residents across the state.

"They're tired of this process," said Delegate Mike McDermott, R-Worcester. "They're tired of not being heard. They're tired of you deciding what's right on a dark night and ramming this through at the 89th day."

But Democrats said rural areas on the Eastern Shore and western Maryland have benefited considerably in recent years in the allocation of school construction money. House Speaker Michael Busch, D-Anne Arundel, said Republicans voted against the state's operating budget and capital budget, which included money for schools.

"I think on balance, people can get up and shout and scream about why they're not voting for it, but the fact of the matter is they weren't voting for it anyway, just the same as they didn't vote for the operating budget or the capital budget."

About $47 million from the tax increase would go to school construction in the first year. Montgomery and Prince George's counties as well as Baltimore city would receive $9 million each. Baltimore County would get $7 million; Anne Arundel County would receive $5 million; and Howard County would get $4 million. Allegany, Carroll, Garrett, Frederick and Washington counties would get a total of $750,000. Calvert Charles and St. Mary's would receive $1.3 million. Eastern Shore counties, including Dorchester, Caroline, Kent, Queen Anne's, Somerset and Talbot, would get a total of $1.3 million.

The bill now goes to the Senate to consider in the session's closing hours.

The Senate already has passed a bill to increase the alcohol tax to 9 percent gradually, by 1 percent a year. The House has changed the bill to accelerate the implementation and increase funding for the developmentally disabled from $5 million to $15 million. That bill also includes an additional $9 million for Prince George's County schools and $12 million for Baltimore schools.

The General Assembly approved a bill to grant in-state college tuition rates to illegal immigrants who meet certain requirements. The House of Delegates voted 74-65 on Monday night to send the bill to Gov. Martin O'Malley, who says he will sign the legislation.

The measure will allow illegal immigrants to pay in-state tuition rates at Maryland's public universities if they complete two years at a community college. They also have to show their parents paid state taxes for at least three years before they graduated high school.

Earlier in the day, senators objected to changes governing how parents showed they had paid taxes. House and Senate negotiators removed the controversial portion, and the House accepted the change.

With the Preakness Stakes set for next month, Maryland lawmakers also are grappling with legislation to allocate millions of dollars in state aid to help Maryland's troubled horse racing industry. Under a bill moving through the Senate, Maryland racetracks would have to agree to simulcast their races before they get help.

Gov. Martin O'Malley told reporters Monday afternoon that the bill was "very much hung up in the waning hours of this General Assembly session," because of the simulcasting provision.

Senate President Thomas V. Mike Miller, D-Calvert, also said the bill was having problems, like many other measures.

"There are all kinds of bills that are in trouble," Miller told reporters Monday afternoon, saying the governor and lawmakers should have moved more aggressively to address problems with the horse racing bill.

While there's plenty of fine-tuning to do, some key pieces of legislation this session have already been approved.

The House of Delegates gave final approval Monday night to O'Malley's proposed Invest Maryland venture capital fund. The governor's original idea for the state to auction off $142 million in tax credits was scaled back to $100 million. The state would use the proceeds from the auction -- up to $75 million -- to invest in high-tech businesses.

Lawmakers already have agreed to state pension reform. The amount state employees pay for retirement will rise from 5 percent to 7 percent, starting on July 1. Monthly premiums for health insurance will rise from 20 percent to 25 percent, and a co-pay system will be maintained. The plan, which was proposed by O'Malley, aims to increase Maryland's funding of its pension system from 64 percent to 80 percent by 2023.

Some high-profile legislation backed by O'Malley already has been shelved for summer study. Lawmakers had too many questions about a proposal to require state utilities to enter into long-term contracts to buy wind energy. Lawmakers also decided earlier in the session to delay a proposal embraced by O'Malley to crack down on septic system pollution.

"There were a couple of big proposals we had as part of our agenda, the size of which caused the legislature to choke and kick them to summer study," O'Malley said Monday.

Miller laughed at the comment.

"I think it would have been better if he'd have choked before he announced that he was for septics," Miller said, referring to the governor's surprise announcement during his State of the State speech that he backed the restrictions.

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