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Maryland Approves Tax Hike, Continues Working On Budget

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The Maryland State House is seen on the opening day of the 2012 legislative session in Annapolis, Md., Wednesday, Jan. 11, 2012.
AP Photo/Patrick Semansky
The Maryland State House is seen on the opening day of the 2012 legislative session in Annapolis, Md., Wednesday, Jan. 11, 2012.

Maryland's Senate budget committee has approved changes to Gov. Martin O'Malley's budget plan, including an income tax hike. Under the plan from the Senate Budget and Taxation Committee, counties would begin to share the cost of teacher pensions, a change phased in over four years.

O'Malley had proposed revenues to soften the blow to counties by capping income tax deductions for residents making more than $100,000. Instead, the Senate committee decided to increase income taxes, repealing a tax cut approved in 1997.

The panel included a number of alternatives in case lawmakers balk at shifting teacher pensions or fail to raise revenue. Those cuts would affect a variety of areas, including education, health and public safety.

The Senate committee kept O'Malley's proposal to expand the sales tax to online sales and increase the tax on tobacco products other than cigarettes.

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