Impasse?

House and Senate negotiators have reached an apparent impasse over a revenue plan for the state. In Annapolis, there is much talk about the likelihood of an impasse over revenues, and the possibility of an extended session to complete the budget, a special session to enact a revenue increase, and/or a “Doomsday Budget” in the event no compromise ensues.

House Speaker Mike Busch (it is said) has his heels dug in and will not allow House negotiators to discuss revenue plans that add to the bill that passed the house. House leaders assert that there are not sufficient votes on the floor to pass a conference report that contains any more taxes.

Senate President Mike Miller is (said to be) threatening to hold up House-sponsored legislation in the Senate, force an extended session, and even to keep the Senate in session during the Orioles’ opening day game if the conferees do not make progress.

This could be serious, or it could all be posturing and gamesmanship.

The two plans have more similarities than differences. Both versions include budget cuts, progressive revenue measures, and a shift of a portion of the cost of teachers’ retirement to local government budgets.

The House income tax plan affects only taxpayers with incomes over $100,000. The Senate plan affects everyone with over $3000 of taxable income, though for most taxpayers the amount will be $1 per week or less. However the Senate plan generates almost twice as much revenue. That’s important because it will help Maryland maintain school quality, access to health care, and college affordability next year and in the future. Also, the Senate plan leaves a much larger cushion in the state’s general fund for June 2013 – meaning there’s less risk of precipitous mid-year cuts in the event of a revenue drop caused by a worsening of the fragile economy or federal budget cuts.

The House version provides less revenue and a smaller year-end balance. The result could be a $200 million shortfall lurking for the legislature to resolve this time next year. In order to bridge that gap, the state will either need to revisit its options for new taxes, or make more cuts to education, health care, public safety and community services.

If the legislature cannot settle on a budget by the end of the 90-day session (Monday April 9), that triggers an “extended session” of up to 30 days. During the extended session, the legislature may only consider the budget bill (and a bill to provide for the cost of the extended session itself).

That means that the budget reconciliation act, the revenue bill and the capital budget would be left hanging. It is likely that the legislature would reconvene in “special session” shortly after the end of the extended session to handle these items and any other essential business left over from the regular session.

This is a lot of extra days of legislating for 188 senators and delegates who are really planning to be back home on April 10. It’s better to provide adequate, responsible and sustainable revenues for the state now. The conference committee should end their game of chicken and settle on a budget plan.