The special session that wasn’tIn splicing together a compromise to help plug a state budget shortfall, the Maryland legislature left much work undone in its special session. What emerged after 21 exhausting days of dickering and dealmaking is a package that boosts taxes by nearly $900 million, makes modest cuts in spending and puts the contentious matter of slot machine gambling in the hands of voters. When the tallying is done, the package of bills comes close to stemming a projected $1.5 billion gap but sidesteps addressing longer term solutions for the state’s ‘‘structural deficit” problem that could worsen if the economy sputters and government growth goes unchecked. In addition, all-important state funding for public schools could decline, forcing counties to shoulder greater costs in individual pursuit of quality education. Businesses face an 8.25 percent corporate tax rate, even higher than the one suggested in the governor’s initial proposal. There won’t be a rollback in state property taxes, a nugget used by the governor to make other increases more palatable. A 20 percent hike in the sales tax, from a nickel on the dollar to 6 cents, will touch everyone’s pocketbook — and then some. The sales tax will be extended to computer technology services, bringing an estimated $200 million, but is an inequitable move that could hurt Montgomery County’s technology service sector. Several of the tax increases were inevitable. Maryland’s personal income tax rates hadn’t been adjusted since the late 1960s. The gasoline tax has failed to cover overdue repairs and expansion work and lawmakers have been raiding the transportation kitty for years. A $1-a-pack boost in the cigarette tax targets smokers, a group that’s easy to dismiss. Tobacco-tax collections are projected to decline as more smokers quit the habit. Lawmakers avoided a reasonable proposal to tie the gasoline tax to the rate of inflation for construction costs, opting instead to channel $400 million from the sales tax increase to transportation projects. Without a stronger commitment to dedicate funds to roads, bridges and mass transit, Maryland will stay behind the curve and the temptation to redirect a portion of the sales tax elsewhere won’t slacken. If the House of Delegates’ razor-thin vote to allow a referendum on bringing up to 15,000 video slot machines to five locations foreshadows how Marylanders will vote, it is too soon to declare that Maryland is out of the financial thicket. Given the ferocious opposition to slots in two of the state’s largest jurisdictions, Montgomery and Prince George’s counties, all bets are off that legalizing the machines will clear next November’s referendum. Major anti-slots lobbying efforts are expected to take root after the holidays and continue all year. By apportioning a significant percentage of the net take from slots to education, the opponents of gambling are in a bind: Rejecting the $300 million a year that slots could bring could ensnare dollars for schools. Gov. Martin O’Malley’s political roll of the dice in calling the special session brought forced compromises; unrealized problems will remain in the path as he drafts his budget blueprint, one that must be austere. Fallout from a slower economy has yet to be understood and questions swirl over whether the state’s operations are as efficient as they could be. The likelihood is real that, as details emerge and are studied, some of the plans could ultimately unravel and be reworked next year when the legislature gathers for its regular 90-day session. Whether the rush to raise taxes produces the desired results remains to be seen. This session wasn’t all that special.
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