Md. Budget Crisis: Senate Works Deep Into the Night on Tax, Slots, Health Care - Southern Maryland Headline News

Md. Budget Crisis: Senate Works Deep Into the Night on Tax, Slots, Health Care


By BERNIE BECKER and ANDY ZIEMINSKI, Capital News Service

ANNAPOLIS (November 9, 2007) - The Senate steamed toward votes on tax and slot machine bills Thursday, beating back a litany of amendments in a day of sometimes heated debate that stretched late into the evening.

By 11 p.m. Thursday, the Senate had given final approval to bills that would authorize as many as 15,000 slot machines in the state.

They gave preliminary approval to bill that would expand Medicaid coverage and to much of Gov. Martin O'Malley's tax package. The Senate was scheduled to meet at 9 a.m. Friday to finish its work and turn the measures over to the House for action.

Senate President Thomas V. Mike Miller, D-Calvert, said he expected opponents of the tax bills to try to mount a filibuster Friday, but he believes he has the votes to block it.

Earlier Thursday, senators defeated scores of amendments to bills that would increase and expand the sales tax, raise the titling tax, increase income tax collections and close corporate tax loopholes, among other changes.

The bills are the heart of O'Malley's plan to close a projected $1.7 billion budget gap and the reason for the 10-day-old special legislative session.

Even as it neared completion of its work, Miller warned that there are "tough times ahead," with the House likely to pass more liberal tax bills before the two chambers sit down to work out final bills.

The Senate bills acted on Thursday were not much changed from versions that came out of Senate committees on Tuesday and Wednesday. But not for lack of trying: Scores of amendments were offered, many from Republicans.

But those that had the biggest impact came from Democrats.

The Senate, by a single vote, extended the income tax to anyone living in Maryland three or more months each year, a change that could raise an additional $58 million. The current threshold is six months, as it is in most states.

Sen. Brian Frosh, D-Montgomery, called his amendment "the fair-share amendment," saying it only asks that those who have a house in Maryland but spend most of the year elsewhere, pay their due.

"We're talking about people who have fled the state for tax purposes," Frosh said.

But "fair share" incited laughter from Republican opponents, who warned it will decrease revenue by causing citizens to flee the state.

"We're just going to send a big 'Welcome to Delaware' sign to everybody in the state," said Sen. Nancy Jacobs, R-Harford.

Senators voted unanimously to exempt landscapers from a bill that would extend the sales tax to certain services, including arcades and computer services. It was a reversal from earlier in the day, when that amendment from Sen. Delores Kelley, D-Baltimore County, failed by one vote.

Kelley had argued Thursday afternoon that it was unfair to tax landscapers because "they're small, they're not well-organized and they don't normally come down with lobbyists."

Supporters of the bill first argued that landscaping services were fair game for the sales tax because they are considered luxuries.

But Senate Majority Leader Edward Kasemeyer, D-Howard, said shortly after 10 p.m. that the Budget and Taxation Committee "had seen the light" and would agree to remove landscapers from the bill. That amendment passed 46-0.

Other amendments were not as successful.

Sen. Richard Colburn, R-Dorchester, tried to eliminate the Eastern Shore from the plan to increase the sales tax from 5 cents to 6 cents per dollar, noting that neighboring Delaware has no sales tax.

Sen. E.J. Pipkin, R-Queen Anne's, noted that Delaware's "No Sales Tax" signs welcoming cars to the state made the Eastern Shore's situation unique, but the amendment died, mostly along party lines.

Sen. Lowell Stoltzfus' attempts to remove Worcester County as a location for slots machines also failed, despite his impassioned plea. Stoltzfus, R-Somerset, noted that all elected officials in Worcester County opposed placing slots there and said adding slots would "cannibalize local businesses."

But an amendment from Sen. Allan Kittleman, R-Howard, to swap Ocean Downs, the supposed slots site in Worcester County, for Rosecroft Raceway in Prince George's County failed, as did a Stoltzfus amendment to simply remove Worcester County as a slots location.

Kasemeyer said Worcester County was included in the slots bill to "capture maximum amounts of revenue." But Stoltzfus cited estimates that Rosecroft could bring in as much as $200 million more than Ocean Downs.

The governor's plan would place 15,000 slot machines in Baltimore City and Allegany, Anne Arundel, Cecil and Worcester counties, if voters approve slots in a referendum next November. The slots referendum was approved 31-15, giving it the three-fifths majority of the Senate needed to pass the proposed constitutional amendment.

Pipkin criticized using the state constitution to enact slots, saying he thinks of "life, liberty and the pursuit of happiness" in a constitution, not slots on Interstate 95.

But Pipkin's bid to swap the governor's plan for a slots bill the Senate passed in 2005, which placed slots at seven locations in the state, was soundly defeated. And Sen. Jamie Raskin, D-Montgomery, reminded Pipkin that "life, liberty and the pursuit of happiness" were in the Declaration of Independence, not the Constitution.

Meanwhile, the amended health care bill waited for final decisions on the tax and slots bills.

The Senate version would raise the income-eligibility levels for Medicaid, as the governor's bill does, but it eliminates a $10 million subsidy the governor wanted to help small business owners maintain health insurance that they currently offer low-income employees.

"First of all, the budget deficit has to be fixed," said Sen. Thomas Middleton, D-Charles.

(CNS reporter Rick Docksai contributed to this report.)

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