Md. Senate Democrats Eye Tax Package To Avoid Cuts

Early talks among the Senate's liberal members have focused on combining proposals to raise the gas tax by 10 cents a gallon, increase the alcohol tax by a dime on each drink sold at restaurants and stores, improve business tax collections and reinstate a "millionaire's tax."

Such a package could cobble together enough political support to pass the Senate and soften the blow from massive cuts that Democratic Gov. Martin O'Malley has proposed to help close a projected $1.4 billion budget gap.

"When you add different revenue measures, together you lose some people and you pick up some people. You essentially have to see who is willing to support how many of them," said Sen. Paul Pinsky, D-Prince George's. "In other words, there might be people who like the gas tax who don't like the millionaire's tax, so when you when you add the millionaire's tax, they peel off."

No formal plan has been drafted and the pieces are still moving as supporters eye how to get the 24 votes needed to advance a measure, Pinsky said.

The idea to combine the taxes, and possibly others, came from a Feb. 1 meeting of Senate Democrats with O'Malley, said Sen. Brian Frosh, D-Montgomery.

"The governor did say he was open to avenues other than pure cuts," Frosh said. "So, people have been talking about it ever since: 'What would work?' 'Where are the votes?'"

After successfully pushing for a 1-cent state sales tax increase and other revenue measures in his first term, O'Malley promised that he would balance the budget he submitted to lawmakers last month without tax increases, though he stopped short of a no-new-taxes pledge.

The governor is keeping an "open mind" on new tax measures that might be approved by the Democratic-controlled legislature, according to O'Malley spokesman Shaun Adamec.

"We need to look at how this stuff is structured and how it would impact all of our efforts to create jobs," Adamec said.

It will be up to the governor to lead on the issue, said Sen. Ulysses Currie, D-Prince George's.

"There are members, probably in both houses, who feel strongly that we need increased revenues, that we probably should raise taxes in certain areas," he said. "But I think without the governor's leadership and support, it's going to be very difficult to get it passed."

Various tax increases play to various political factions. Senate President Thomas V. Mike Miller, D-Calvert, has long supported increasing the gas tax, but has opposed combined reporting — which would close a tax loophole for large businesses that operate in multiple states. Senate Majority Leader Rob Garagiola, newly appointed to his post by Miller, introduced a gas tax bill Monday.

Pinsky and 17 other senators signed onto the combined reporting proposal. Other lawmakers who are in discussions over the tax package are supporters of the alcohol tax increase, such as Sen. James Rosapepe, D-Prince George's. Sen. Verna Jones-Rodwell, D-Baltimore, is the sole sponsor of a bill to reinstate the "millionaire's tax" that temporarily established a new tax bracket for the state's highest-income earners.

Miller has not signed on to any of the three measures.

Sen. David Brinkley, R-Frederick and a member of the budget committee, was dismissive of the Democrats' negotiations for a unified package.

"This is the exact thing the Maryland taxpayers are fed up with," he said of the tax hikes being considered.

Senators are eyeing all the tax measures that have been "floating around" Annapolis since the legislative session started in January, said Sen. Roger Manno, D-Montgomery.

But a package would have to wait until after lawmakers and the public have vetted the amount each tax would raise and "whether the juice is worth the squeeze," Manno said, citing an old adage in Annapolis that equates the political pain felt by raising a tax to the amount of money that is actually gained.