Olszewski Jr.: It Was Time to Tighten the State Budget Belt

The 2012 legislative session in Annapolis has drawn to a conclusion, at least for now.  The main focus of every session, and the reason for uncertainty about whether or not there may be a special session in the coming weeks, deals with the state budget. 

The House of Delegates and the State Senate proposed significantly different versions of the state budget, neither of which reflected Gov. Martin O’Malley’s initial budget proposal.

Under the House plan, income taxes would have been raised on those making over $100,000 individually and $150,000 jointly under adjusted gross income (calculated after taxes are taken).

The Senate’s plan would have increased income tax rate by a quarter percent on almost everyone, as well as created a new, unprecedented flat tax on all those making over $500,000 annually.

I did not support either version of the tax package, as I felt very strongly that there are additional opportunities for the state to realize savings before considering the need to raise additional tax revenue through income tax hikes.

In a strange twist, and due to a disagreement between the House and the Senate over legislation that would have expanded gambling to include table games and added a sixth gambling site in Prince George’s county, the legislation that would have shared pension costs with local government (the Budget Reconciliation and Financing Act, or BRFA) and the bill that would have raised income taxes both failed. 

As a result, the operating budget is currently slated to balance the state’s books with no new taxes or fees – it is balanced entirely with $512 million in cuts.  For a full list of programs impacted, you can visit this website.

While Baltimore County stands to lose over $14 million under the plan, the cuts pale in comparison to places like Baltimore City ($59.6M), Prince Georges ($65.4M), and Montgomery County ($44.4M).

Indeed, some legislative leaders have suggested that the General Assembly should return for a special session, given the failure of the BRFA, tax bill, and slots legislation.  If there is a drumbeat for a special session to specifically raise taxes, you can be sure that it will come from members of these three jurisdictions, as any new revenue would largely be used to “plug the holes” that are necessitated by the cuts included in the Fiscal Year 2013 Operating Budget that passed.

While I personally do not agree with all of the contingent cuts that will take place as a result of the BRFA and tax bill failing to pass, I do know that the state has needed – for a long time – to find more ways to tighten its belt and to live within its means, just as families in our district and state have been doing for years. 

Depending on whether or not the legislature is summoned to another session before the July 1 budget begins, this may be the year that finally happens.