House moves $35B budget with few cuts and a tax hike to a final vote in marathon session
In a nearly 11-hour session, the House of Delegates fended off proposals to level fund the fiscal 2013 budget, block shifting teacher pension costs, and eliminate an income tax hike.
Scores of amendments were attempted on the controversial bills, but none passed. All of the bills will go for final votes Friday or Saturday exactly as they came from their committees.
Initially, the House was supposed to have two sessions on Thursday: one in the morning and one in the late afternoon. But debate and amendment attempts on the main budget bill and Budget Reconciliation and Financing Act stretched through the afternoon and into the evening with no break.
At about 5:30 p.m., Speaker Michael Busch — sounding hoarse from calling for amendments for nearly eight hours — announced food was being ordered for the delegates.
“We’ll go all night if we have to,” he said.
Right before Busch adjourned the body at close to 9 p.m., he thanked them all for a hard day’s work.
“The only bad thing is we have to come back to work tomorrow,” he said, as the end of the 90-day session loomed two weeks from Monday.
Level funding rejected
Minority Leader Anthony O’Donnell proposed a budget amendment that would enact a level funded budget, which was defeated 47-90. The Calvert County Republican pleaded with his colleagues to live on the same funds they did last year just as many families they represent do, rather than approve a budget with $1 billion in additional spending.
Among the provisions, O’Donnell’s amendment would have eliminated a proposed income tax increase and a shift of teacher pension costs to the counties. Several Republicans said they would vote for the budget if the amendment was adopted.
“We cannot tax ourselves into prosperity,” said Del. Ron George, R-Anne Arundel, defending the amendment.
Opponents admitted that O’Donnell’s amendment was attractive on its surface, but would come at a severe cost to education, transportation, and other services during a recession when families are relying on government assistance.
“When the good times return we will be able to restore so many of the budget reductions, level fundings, and outright cuts that we’ve implemented [in the past] and will be able to spread that benefit to everybody,” said House Majority Leader Kumar Barve, D-Montgomery.
Committee amendments challenged
Several provisions of the proposed House budget were challenged. A committee amendment that would allow for online sale of lottery tickets cleared the chamber with a 72-62 vote, despite some objections.
Republicans failed to halt a House committee amendment to strip Senate language requiring the law school of the University of Maryland, Baltimore to establish an agricultural law clinic dedicated to assisting farmers by diverting $250,000 from the university president’s office.
The provision comes after the law school’s environmental law clinic opted to represent an environmental group suing a local chicken farm. The lawsuit, which has placed a financial burden on the local farmer, has rankled Eastern Shore Republicans and Gov. Martin O’Malley.
Although Republicans defended the Senate language, arguing that the funds were minor and would bring fairness to environmental and agricultural issues, supporters of the House version stated that the legislature was not in the business of micromanaging institutions’ budgets.
Pension shift moves forward
The Budget Reconciliation and Financing Act — known as “BuRFA” — changes laws that affect state spending.
The most controversial shifts the employer cost of teacher pensions from state government to local boards of education over the next three years. Six of the 21 amendments proposed to the bill would have changed the amounts, methods and penalties dealing with the pension shift.
O’Donnell proposed an amendment taking the entire pension shift out of the bill. He said that counties cannot afford to spend so much money on pension contributions, and delegates will be remembered for making the shift — something that no local government supports.
“We’re shifting burdens to the local governments so we can spend more money,” O’Donnell said.
His amendment failed 53-79. Montgomery County government officials are strongly opposed to the shift, and Montgomery Democrats Sam Arora, Charles Barkley, Benjamin Kramer, William Frick and Luiz Simmons supported the amendment to stop it.
“I don’t believe that balancing our budget on the back of our local government is a responsible action,” said Kramer.
Del. Michael Smigiel, R-Cecil, said that the General Assembly is looking at numbers, but does not know what would actually happen to local governments if the pension shift becomes law.
“What are we going to do when the first county stands up and says, ‘Guess what? We’re facing bankruptcy?’” Smigiel asked. “How irresponsible is it of us to pass this burden on and not even know the effects of it?”
Higher percentage of state spending goes to schools
Del. John Bohanan, D-St. Mary’s, pointed out that when the Thornton formula for education funding first passed, 47% of the state’s money was spent on state government and 33% went to local governments. Now, he said, as pension costs have grown, the two funding categories are equal — both state government and local government taking 40% of the total state budget.
“Local government grants are getting ready to surpass,” Bohanan said. “If we continue to let it do that, it will eclipse what we spend on state government.”
The floor leader for the debate, Del. Melony Griffith, D-Prince George’s, said that the shift should be looked at as an opportunity for the state and local governments to share pension costs for mutual benefits.
“We’re not passing the buck,” she said. “We’re asking for partnership and we’re asking our locals to share.”
Tax hikes remain
Despite a protest earlier in the day where cars circled the State House honking their horns in opposition to tax increases, a bill to raise the income tax .25% for those making more than $100,000 a year moved forward in the House.
Del. Andrew Serafini, R-Washington, proposed two amendments that would replace the proposed income tax hike with a flat tax. Although Serafini said the House version of the income tax bill was an improvement to the version passed by the Senate, he said his amendments were a fair, simple, and revenue neutral option. Both were defeated.
Del. Kathy Szeliga, R-Baltimore County, proposed a “marriage protection” amendment. She said the House bill was “discriminatory” and penalized marriage because it taxes single individuals making $100,000 a year as well as married couples with a combined income of $150,000. Szeliga said $150,000 as a combined income did not compare to earning such an income as an individual. The amendment was defeated 41-69.
Flush tax would double
An additional tax bill not part of the House budget package that moved toward a final vote was the so-called “flush tax,” which would double water bills from $30 to $60 a year. The additional revenue would go toward the Chesapeake Bay Restoration Fund.