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Panel OKs budget with cuts, tax hike

ANNAPOLIS — A panel of Maryland lawmakers reached agreement Monday night on a package of budget measures that include an income tax increase on residents who make more than $100,000, as the General Assembly neared adjournment in an unusually chaotic and tense final hours of a difficult session.

Meanwhile, lawmakers also were poised to vote on expanding gambling in Maryland to allow table games like blackjack — as well as a gambling venue in Prince George’s County.

The budget panel only managed to reach an accord with less than four hours left on the session.

By doing so, negotiators avoided painful budget cuts that would have gone in place of the revenues. The budget package now goes to the House and Senate for final votes.

Under the plan, the state would raise roughly $250 million in revenue from the income tax increases. The agreement also calls for up to $60 million in spending reductions in the next two fiscal years, depending on how revenues perform.

The panel also agreed on a separate bill to share costs from teacher pensions with the state’s counties over four years, with 50 percent of the county portion of the shift occurring in the first year. The income tax measure includes some offsets to help counties weather the additional burden.

Negotiations on the revenue package had been stuck on whether to reduce tax exemptions on federally adjusted gross income for people who make less than $100,000 a year from $3,200 to $3,000. The House opposed it, and the Senate pushed to reduce it for three years.

In the end, lawmakers went with the House plan, and added the $60 million in potential cuts to appease senators who wanted to boost the state farther along in reducing an ongoing budget deficit.

Late Monday afternoon, a House committee revived a measure to expand Maryland gambling laws. Members of the House Ways and Means Committee passed a stripped-down version of a Senate bill that would legalize table games at five casino sites and clear the way for a sixth future casino, in Prince George’s County. The measure, which would require statewide voter approval, would prohibit the state tax on slot machines from exceeding 60 percent and require the state to hire a consultant to study the impact of future gambling in Prince George’s on existing casinos.

“I think it’s a giant step in the right direction,” said Prince George’s County Executive Rushern Baker, who has pushed for the development of a $1 billion casino at the National Harbor development in his county.

Prince George’s voters would also have to vote in favor of the measure in order in order for the new casino to be built.

The closing hours of this year’s legislative session have been unusually chaotic because of the lack of agreement on the budget until the session’s waning hours.

Lawmakers are trying to balance the books for the next fiscal year and cut an ongoing $1.1 billion budget deficit in half. The ongoing deficit will resurface in future years unless lawmakers take budget actions that continue beyond simply the next fiscal year. Gov. Martin O’Malley’s budget proposal was significantly changed by both the House and the Senate, complicating the process.

Busch, Miller clash on budget

On Monday, with time running out, finger-pointing from the presiding officers characterized the first part of the afternoon. House Speaker Michael Busch blamed the Senate for foot-dragging in hopes of getting an expanded gambling measure through.

“If the budget of the state of Maryland goes down and the senators are more concerned about the obsession with gaming than they are with school construction, school funding, higher education money, then let them wear that when they go home and tell their constituents why they had to spend extra time in Annapolis,” Busch told reporters earlier in the day.

Senate President Thomas V. Mike Miller contended the House wasn’t going far enough in the income tax plan backed by senators to adequately address the state’s running deficit in future years.

“There are those of us that understand that we have a structural deficit that has to be dealt with,” Miller said. “You can’t keep owing, owing, owing, owing and owing.”

While the budget negotiations created an obvious distraction, the General Assembly worked to pass other measures.

Lawmakers passed a bill to double the state’s “flush tax” on sewer bills from $30 to $60 a year to pay for upgrades to wastewater treatment facilities.

They also gave final passage to a bill that limits where new septic systems can be installed, a priority of O’Malley’s. The measure creates a four-tiered system that limits where developers can build residential subdivisions that use septic systems rather than public water and sewer services.

Some high-profile measures faced uncertain prospects.

O’Malley’s offshore wind measure appeared to be in jeopardy, as even supporters gave up on the bill. The measure, scaled back significantly from a bill that failed last year, has sailed through the House, but the Senate had not voted on it as of early Monday evening.

The Senate, on a 26-20 vote Monday, approved a measure that is designed to help foster public-private partnerships on big projects such as roads and public buildings. The bill is the same proposal that O’Malley’s administration submitted. The House of Delegates made some significant changes to the bill earlier this session to allow legal appeals to be heard on an expedited track before the Court of Special Appeals, the state’s intermediate appellate court.

That provision would be retroactive to apply to the State Center project in Baltimore. The change brought criticism from some lawmakers who said it would confer special legal benefits for certain companies. The differences between the two bills will need to be worked out before Monday’s midnight adjournment.