Gov. O'Malley's Budget Deficit Plan Approved

For some Maryland legislators, it was a long three weeks and for others the special session of the General Assembly did not last long enough. In the end, after some tinkering and skirmishes between the House and Senate, the plan to mitigate the State's 1.7 billion budget deficit submitted by Governor Martin O'Malley was approved.

Approximately 1.3 billion in tax revenue was added along with a suggested cut of 550 million in services. The cut of 550 million in services is suggested due to the fact the Governor will submit his Budget for the next fiscal year during the regular session of the General Assembly.

A few quick observations is the Governor's proposed change in the tax structure to increase the top earners (over $500,000) rate to 6.5% was passed at 5.5%. The main source of new revenue was achieved by increasing the sales tax by one cent on the dollar. However the inclusion of new services proposed by the Governor to be covered by the sales tax was changed from property management, health clubs to computer services. It does not appear that the three cent reduction in property tax proposed by the Governor survived final passage.

The new "green fund" was funded at about 50 million per year from taxes to car rentals. This is a fund to help clean the Chesapeake Bay by mitigating storm-water and agricultural run-off issues.

The approval of a Slots (video lottery terminals) Referendum was approved by the minimum number of votes needed in the House and will be placed on the November 2008 Ballot in Maryland for voters to decide. This consensus was reached after the Senate President Thomas "Mike" Miller forced the House to approve the Slots enabling legislation by refusing to have the Senate take up final consideration of any of the legislation the House had sent to the Senate.

Maryland Republican representatives will rail against the increase in taxes and the method approved for approval of Slots - preferring an auction method to generate revenues now for the state. While Democrats will tout consensus building, the modernization of the tax structure to make it more fair to the working family, showing concern toward environment and transportation issues, and letting the people decide on Slots in Maryland.

Time will be the judge as to the success of the actions of the Maryland legislators in this special session. Allowing the state of Maryland to reach this financial position was the result of actions taken by representatives on both sides of the aisle. Let's hope that in the future Maryland's elected representatives are wiser when it comes to managing the budget.