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Legislature Approves Tax Hike, Pension Shift

Governor calls budget package "good for all Marylanders." Republicans say burden to local governments may force county governments to increase taxes.

ANNAPOLIS, Md. — The Maryland House of Delegates gave final approval Wednesday to a package of three bills that increases taxes on some state residents, shifts part of teacher pensions to local governments and undoes the so-called "doomsday budget."

The votes Wednesday afternoon capped the three-day special session called by Gov. Martin O'Malley in order to override more than $500 million in cuts made in a budget passed in early April.

The Senate approved the same three bills Tuesday.

As part of the package, legislators approved by a vote of 86-51 what amounts to a 50-50 split of teacher pension costs with local governments. The split will be phased in over the next four years beginning July 1 with the new budget year.

That bill also includes a doubling of fees for death certificates; increasing the tax on the wholesale cost of so-called "little cigars" to 70 percent of the wholesale costs; and doubles the tax on smokeless tobacco.

Eight Democrats joined all 43 Republicans in the House in voting against the bill that split pension costs.

The House voted 77-60 to approve legislation increasing income taxes on what lawmakers and O'Malley called the top 14 percent of earners in the state. Again, all 43 House Republicans voted against the tax increases and elimination of personal tax exemptions, which are expected to generate $247 million in additional revenues.

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