House, Senate conferees square off on taxes

House and Senate negotiators squared off Monday over the issue of taxes -- and the question wasn't whether to raise them but who should pay.

The five senators and five delegates on the revenue bill conference gathered in the afternoon at the Legislative Services Building next to the State House. It was part of a complicated series of negotiations that began Monday on the various bill that make up this year's budget package -- including the budget bill itself, a companion measure needed to achieve balance and the tax measure. Another piece of the puzzle, a shift of teacher pension costs from the state to the counties, was put off until Tuesday as part of the negotiations on the budget companion bill.

Little progress was made Monday but little was expected on a day when legislators spent much of the day taking their measure of the other side's positions. Some small budget items were resolved by concession to the other chamber or by splitting the difference, but big-ticket items and contentious matters were deferred.

While the budget conference started first, much of the interest centers around the tax bill -- the most controversial piece of the package and the one upon which other decisions depend. That conference started with a relatively brief meeting during which the Senate and House teams laid out the reasoning behind their differing approaches to a tax increase.

The Senate would raise $475.8 million in state revenue in the next budget year by raising income taxes on a sliding scale for all taxpayers making more than $3,000, though lower-income taxpayers would get most of the increase back in the form of a tax credit. The House proposed a plan that would raise $191.8 million by raising rates on individuals making $100,000 and joint filers who earn more than $150,000 after deductions.

Sen. Richard Madaleno, D-Montgomery, took the lead for his team -- explaining that the Senate took its approach because of a sense that it would be fairest to share the burden widely. Everyone gets the benefits of government services, Madaleno said, so everyone should kick in something. Madaleno also stressed the importance of raising enough revenue to address the remaining structural deficit next year -- expected to still stand at about $500 million -- without having to come back for additional tax increases.

Montgomery County's Del. Kumar Barve, the House majority leader and a key aide to House Speaker Michael E. Busch, stressed that the House approach would raise taxes for only about 10 percent of Marylanders. He and Del. John Bohanan, a St. Mary's County Democrat, said any move to reach lower down the income scale would face resistance on the House floor.

Bohanan said that while the principle of making everyone pay a share has its appeal, many people at the lower income levels are still emerging from the recent recession.

After taking stock of the other sides' positions, the conferees agreed to meet again at 4:30 p.m. Tuesday as they move toward an unofficial goal of wrapping up a deal by the end of Wednesday.

Before they adjourned, Warren Deschenaux -- director of the Office of Policy Analysis and the de factor referee of the conference -- outlined just how far the lawmakers have to go to reach their goal of leaving a $100 million fund balance: $416 million in revenues, cuts or transfers. 

The conference is open to reporters, but in fact the critical decisions are made in closed caucuses of the House and Senate conferees meeting separately, as well as side conversations between the key players -- both lawmakers and staff. Busch and Senate President Thomas V. Mike Miller don't attend, but their top aides do and keep them informed of every nuance of the negotiations. 





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