ANNAPOLIS — With a possible teacher pension shift that could cost local governments millions, Sen. Roger Manno is looking for revenue streams, including extending county taxing authority, to soften the blow.

Manno (D-Dist. 19) of Silver Spring has filed legislation that would enable county governments to set various rates for the income tax it receives from the state, a move he says could enable Montgomery and other counties to offset the retirement costs.

“I’m trying to throw stuff out there to try and provide some revenue options,” Manno said. “So we can have more intelligent, more robust dialogue about which way the state’s going to [go].”

Manno’s bill would authorize county governments to create different tax brackets on individual incomes, up to 3.5 percent. County income tax rates currently range from 1.25 percent to 3.2 percent through the state’s so-called piggyback tax, which the state collects as a courtesy for the local jurisdictions.

It would enable local governments to generate more income from high earners or effectively cut taxes for people with lower incomes, Manno said.

Gov. Martin O’Malley’s budget proposes the legislature shift $239 million in teacher pensions costs to local governments. The plan includes $244 million in revenue to soften the blow, which includes an increase in the income tax for the state’s high earners.

Manno’s proposal mirrors the tax increase proposed by the governor, said Montgomery County Executive Isiah Leggett, and would be of no advantage to his county.

“That’s where we already were,” Leggett (D) said. “We’re mitigating it by taxing ourselves. What’s the advantage in that? If that’s the mitigation, you’re paying for the mitigation.”

Documents from the governor’s office suggest the offsets in O’Malley’s proposal could save Montgomery County $18 million in the first year of a pension shift, but county officials expect those costs to skyrocket in the future years.

“None of this is going to be popular, but I’m in a position where I feel l have to be part of the solution,” Manno said.

sbreitenbach@gazette.net