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Special session 'cuts' may trim local projects

November 13, 2007

Barring any major problems in reconciling House and Senate versions of the bill, it now appears that the Maryland General Assembly will pass most of the budget balancing package sought by Gov. Martin O'Malley.

What remained (as of Monday morning) was for the House of Delegates to agree on $500 million in budget cuts and to agree on a yea-or-nay referendum for slot machines.

As proposed, the taxes would affect citizens and businesses statewide. But the cuts could target projects in areas where the delegations are mostly made up of members of the minority party. It will be a challenge for the Washington County delegation to see that such does not happen.

Of special concern - and mentioned in Brien Poffenberger's letter on this page - is Del. John Donoghue's proposal to push teacher-pension costs back to the county.

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According to Poffenberger, this will add $7 million annually to the county budget, at a time when there are more than $50 million in school-construction projects awaiting action.

Late last month, Donoghue gave the following statement to Baltimore's WBAL-TV:

"Right now, the counties negotiate the teacher salaries. The state pays 100 percent of the freight. What we are asking the counties to do is come to the table and help us figure out a way to fund this proposal. The poorer counties would pay less, the wealthier counties would pay more," he said.

We hope Del. Donoghue can soon explain what this bill will do and why he believes it is necessary.

Items agreed to over the weekend included the following:

· Increasing the state sales tax and the car-titling tax rate form 5 percent to 6 percent.

· Doubling the state tax on each pack of cigarettes from $1 to $2.

· Raising the state's hotel tax.

Changing the state's income tax brackets. On Sunday, The Washington Post reported that most filers in the state now pay a 4.75 percent rate.

The Post account said that O'Malley sought two new - and higher - brackets for high earners, of 6 percent and 6.5 percent.

But delegates from Montgomery County, one of the nation's richest, balked and the State Senate cut the rates in its version to 5 percent and 5.5 percent. A House committee is working on an alternative, which involves three higher brackets.

Before the session began, the Annapolis/Anne Arundel County Chamber of Commerce issued a position paper on the proposals and offered one of its own, which we support.

The legislature has a tradition of balancing the budget by allowing the governor to dip into various trust funds and accounts that are supposedly dedicated to other purposes.

We agree with the chamber's view: Certain taxes should only be increased only if the proceeds are dedicated to specific funds.

In other words, money collected for the Transportation Trust Fund should not be "borrowed" for unrelated purposes.

Whether lawmakers will agree to such a restriction is anybody's guess. But now is the time to ask, when compromises are being made to make progress before the special session ends.

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