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Delegates Hang Tough On Tax Brackets [Correction 12/5/07]

The Washington Post November 15, 2007 | Philip Rucker; Ovetta Wiggins — Washington Post Staff Writers Montgomery County legislators were holdouts on two major tax bills that passed the House of Delegates early Sunday, measures that would raise $1.4 billion a year to close a budget shortfall and fund transportation and health-care initiatives.

The delegates, all Democrats, were concerned about the plan to overhaul state income tax brackets. Most Montgomery residents would pay lower income taxes under the legislation. But leaders of the delegation worried about the plan’s effects on high-income earners, whose tax rates would be raised, and the consequences for the county’s economic development interests.

Opposition from one of the Democratic-controlled legislature’s most loyal block of lawmakers threw the tax plan into a tailspin over the weekend. The 24-member Montgomery delegation was divided over how to leverage votes on the tax legislation, members said.

Del. Sheila E. Hixson (D-Montgomery), who opposed the strategy to leverage votes, said some members were pushing for dedicated funding for education and transportation projects — key priorities in Montgomery — and others said the income tax proposal would be too onerous on the county.

“We’re sticking to our guns,” said Del. Ana Sol Gutierrez (D– Montgomery).

Most Marylanders pay the same personal income tax rate of 4.75 percent. Gov. Martin O’Malley (D) proposed adding two higher-income brackets of 6 and 6.5 percent. A legislative analysis estimated that 5.2 percent of Montgomery residents would pay more under his plan. website 2012 tax brackets

But in a nod to Montgomery, home to more high-income earners than any other Maryland jurisdiction, the Senate rolled back the top rates to 5 and 5.5 percent.

The alternative passed by the House would add three brackets of 5.25, 5.5 and 5.75 percent. The plan would also expand the personal exemption available to most filers. House Speaker Michael E. Busch (D-Anne Arundel) said about 7 percent of filers statewide would pay more than they do now.

But Del. Luiz R.S. Simmons (D-Montgomery) said he was troubled that Montgomery was “not getting any comparable tangible benefit” for its votes in support of the tax plan.

Further, some of the lawmakers voiced concern that amid a structural budget deficit, O’Malley and many lawmakers are proposing income tax cuts for the state’s lower– and middle-income residents.

“We came up here to close a huge budget gap, and as part of that process we hear that 95 percent of the state’s residents are going to get a tax cut?” asked Del. Benjamin F. Kramer (D-Montgomery). “There’s something about that that just doesn’t jive.” With Busch and the House leadership unable to tally enough votes to bring the bill to the floor, O’Malley met with the Montgomery delegation to discuss their concerns.

“He showed a lot of humility,” said Del. Herman L. Taylor Jr. (D– Montgomery). “He made his pitch to make sure we got around his plan.” In discussing the protest of Montgomery delegates, the House Ways and Means Committee came up with an alternate bill that cut transportation funding. But the county’s lawmakers liked the alternative even less, since funding for roads and mass transit is a top priority in Montgomery.

Ultimately, after negotiations that stretched into the early morning hours, 19 Montgomery delegates voted in favor of the income tax proposal. Four delegates, including Delegation Chairman Brian J. Feldman (D-Montgomery), voted against the proposal. One delegate was absent. this web site 2012 tax brackets

Incumbent U.S. Rep. Albert R. Wynn came out swinging last week in the first debate of the campaign season for his Maryland congressional seat, leveling a new charge at his leading Democratic challenger, Fort Washington lawyer Donna F. Edwards.

Wynn told the Silver Spring crowd that the charitable foundation that Edwards heads as executive director has invested in government contractor boogeyman Halliburton, as well as several of the companies whose donations to him she has criticized. As a nonprofit group, the Arca Foundation, which distributes grants to progressive and other causes, is required to publicly disclose its investments.

Wynn indicated that Arca has invested more than $150,000 in Halliburton, more than $740,000 in Exxon, and also has put money into telecommunications companies.

Edwards has been critical of Wynn for accepting campaign contributions from corporate interests, including cable, phone, gas and oil companies.

Edwards, who has taken a leave of absence from the Arca Foundation to run for office, responded that as a staffer for the group, she has no control over its investments.

“I’m an employee — give me a break,” she responded at the debate.

Arca board member Margery Tabankin, who is supporting Edwards, said the foundation’s endowment is invested by the Mercantile Bank, whose managers make stock picks and report performance to the board. The board does not typically intervene in the process, Tabankin said, and, as executive director, Edwards has “zero” control over investments.

But Wynn dismissed that argument in an interview, noting Edwards’s position with the group. “She’s not an assistant something or other,” he said.

“She says she’s proud to be at the helm of the group — those are her words,” he said. “If you’re at the helm, you can’t start saying you’re an employee.” The two are likely to continue clashing as the Feb. 12 primary approaches. Edwards’s campaign has received a lot of attention by liberal bloggers and others who believe Wynn is too far right for his overwhelmingly Democratic district and who were impressed with her surprisingly close run against Wynn in 2006.

Meanwhile, the other three candidates in the race are trying to get noticed.

George E. McDermott of Forest Heights promised voters he would clean up corruption in the court system. And the race’s most recent entrant, Jason Jennings, an environmental engineer from Montgomery County, said he alone would speak honestly with voters. Alone among the candidates, he told the debate audience that he did not believe U.S. troops can be withdrawn immediately from Iraq — arguing that to do so would leave chaos behind. The Silver Spring resident said his position was emblematic of his willingness to level with voters.

Thursday’s debate at Montgomery Blair High School was sponsored by the Greater Silver Spring Democratic Club. Staff writer John Wagner contributed to this report.

Philip Rucker; Ovetta Wiggins — Washington Post Staff Writers