Md. Senate Dems Float New Budget, $827M In Taxes

The six senators said their plan would set the gas tax 35.5 cents a gallon and the cigarette tax at $3 a pack and charge drinkers an additional 10 cents per drink. It would also reinstate the millionaire's tax on Maryland's top earners and close a loophole that allows companies doing business in Maryland to avoid paying taxes on earnings held out of state.

O'Malley, whose plan tries to close a $1.4 billion revenue gap, told Senate Democrats during a meeting Feb. 1 that he would keep an open mind on new taxes. That meeting was the impetus for the group's proposal, said Sen. James Rosapepe, D-Prince George's.

A spokesman for the governor said he would consider all options advanced by the Legislature.

That, and support from various other lawmakers — including Senate President Thomas V. Mike Miller, who wants an increase in the gas tax — led the group to combine the taxes into one proposal to leverage political support, Rosapepe said.

"What we tried to do was set out another alternative budget because a number of people have said it was time for folks in the Legislature to step up and show some leadership," Rosapepe said. "So we felt that we would take that challenge."

Of the $827 million in new taxes, $360 million would go to transportation projects, $227 million would cover the state's unfunded pension liabilities, $140 million would go to education and local aid cut by the governor and $100 million would restore healthcare cuts.

To get there, supporters would alcohol tax from $1.50 to $10.03 per gallon for distilled spirits, from 40 cents to $2.96 per gallon for wine and from 9 cents to $1.16 per gallon for beer. They would raise the gas tax 12 cents per gallon. They would raise the cigarette tax $1 a pack. And they would create a higher income tax bracket for all earnings in excess of $1 million.

The other five Democrats who have signed onto the plan are Brian Frosh, Karen Montgomery and Jamie Raskin, all of Montgomery; Delores Kelley of Baltimore County; and Paul Pinsky of Prince George's.

Any call for new taxes and spending would have to first be vetted by the chamber's budget committee, said Sen. Richard Madaleno, D-Montgomery, and a member of the Senate Budget and Taxation Committee.

"I'm interested in some of those tax proposals and I'm hopeful the Budget and Taxation Committee will consider some of those," Madaleno said. "But I'm not part of this effort this effort to leverage the votes because I have a role to play in the committee."

The Senate Democratic Caucus, which is comprised of 35 of the Senate's 47 members, will likely talk about taxes at its meeting next Tuesday, Rosapepe said.