Struggling with computer tax

The Baltimore Sun

Senate President Thomas V. Mike Miller spent yesterday personally drumming up votes for a plan to repeal the unpopular tax on computer services, which is scheduled for a key committee vote today.

"We're going to do some polling," Miller told senators on the floor yesterday. "When we come around, please don't run."

With less than a week left in the annual legislative session, the most contentious issue left to the General Assembly is how to balance a nearly universal desire to scrap the $200 million computer services levy with an equally strong aversion to enacting new taxes.

It is not clear whether support exists in the Senate for any of the proposals that have been offered for replacing the revenue that would be lost through a repeal.

Gov. Martin O'Malley, a Democrat, is urging lawmakers to pay for the repeal through a combination of budget cuts and a income tax surcharge on people making more than $1 million a year.

But some in the Democratic majority have joined Republicans in calling for a blanket moratorium on new taxes.

Sen. Richard Madaleno, a Montgomery County Democrat, has said he would vote to maintain the computer services tax over an income tax increase for the rich. He said yesterday that his position has not changed, though his colleague on the powerful Budget and Taxation Committee, Montgomery County Democratic Sen. Nancy J. King, said she would reluctantly opt for an income tax increase, "If I had to."

"Democrats are an unusual group of people," said Miller, who has tentatively backed O'Malley's proposal. "Some of the Democrats say, 'Look, I'll agree to another tax, but it's got to be temporary.' Others say, 'I'll only vote for it if it's a permanent tax.' And others are saying, 'Look, we've imposed enough taxation. ... Try to find $200 million more in cuts.'"

Sen. Ulysses Currie, chairman of the Budget and Taxation Committee, said yesterday that he expected to hold a vote on a bill to repeal the tax today, but said a palatable combination of cuts to tax increases was still in flux.

"It's very fluid," said Currie, who in recent days - sometimes on the same day - has expressed both optimism and doubt about a "tech tax" repeal. Any bill scrapping the tax would likely come from Currie's committee but would not be presented to the full chamber until the Senate president believes he has enough votes to pass it, said Miller spokeswoman Lisa Fulton.

House Speaker Michael E. Busch, who also favors a computer tax repeal, has said the responsibility for a solution should come from the Senate, where the tax was first passed in the final hours of November's special legislative session.

At the end of the day yesterday, Miller released a statement saying: "We are still working to get a firm sense of the level of support for various aspects of the Governor's proposal to repeal the computer services tax."

If the tax is not repealed, it will take effect July 1.

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