“Associated Press” - House approves $34B budget that restores some education funds; Senate panel OKs alcohol tax
March 25, 2011 Associated Press
March 24, 2011
http://www.washingtonpost.com/house-approves-34b-budget-that-restores-some-education-funds-senate-panel-oks-alcohol-tax/2011/03/24/ABAUhlRB_story.html
ANNAPOLIS, Md. — The Maryland House of Delegates voted Thursday to adopt a $34 billion state budget, as a Senate panel approved a new 3 percent tax on alcohol sales that would raise $90 million over three years for the state.
The 97-42 vote was almost completely along party lines. During a budget debate in the House, Democrats praised the restoration of $58 million of $94 million in education funds that had been cut by Gov. Martin O’Malley’s budget plan.
“This budget is progress for our state that is emerging from a very difficult time,” said Delegate John Bohanan, D-St. Mary’s, who also noted that the budget restores money that had been shifted away from the state’s transportation trust fund.
But Delegate Steve Schuh, R-Anne Arundel, said the state has relied too much on shifting money around and borrowing to balance its books during the recession and in the current budget
“It’s a large shuffling of paper and peanut shells that basically boils down to borrowing money in order to maintain spending today,” Schuh said.
The House also approved a budget reconciliation bill needed to balance the budget. It includes changes to O’Malley’s pension reform plan. One significant difference requires state employees to pay 7 percent of their salaries instead of 5 percent into their pension plan. O’Malley’s proposal would have given employees a choice of paying 7 percent to receive the same retirement benefit or keep paying 5 percent for less money in retirement.
The House legislation also includes a variety of cuts, including a $10 million rate reduction for managed care organizations under Medicaid. The House achieved about $12 million in savings through changes to the state’s retiree prescription drug plan. Another $19 million in savings comes from charging counties 50 percent of property valuation costs.
The budget legislation increases fees by more than $70 million. One of the biggest would double a titling fee on new vehicle purchases from $50 to $100, a change that would raise about $50 million. A surcharge on filing land records would rise from $20 to $40 to raise an estimated $17 million.
The only Republican to vote for the House budget was Rep. Wendell Beitzel, R-Garrett.
The Senate will be working on the budget legislation next week. On Thursday, the Senate Budget and Taxation Committee approved the alcohol tax increase, which is not in the House version of the budget bill. The tax would be levied on alcohol sales at retail establishments, from convenience stores to restaurants. The Senate panel largely has agreed with changes already made by the House. The Senate has restored $6 million of the $8 million the House cut from higher education funding.
The Senate panel also agreed with a series of fees approved by the House. However, the panel exempted rental car companies from paying the new vehicle titling fee, after the companies protested the increase this week.
Democrats said the budget plan that was passed Thursday night in the Democratic-controlled House addresses about 40 percent of the state’s projected deficit in future years.
The measure provides $5 million in assistance for road repairs to counties and $8 million to municipalities, after severe cuts in recent years.
