The UB Post

University System of Maryland officials say they think they can still manage a tuition freeze next year after the system was spared from a round of budget cuts passed by lawmakers on April 5.

In fact, lawmakers said not a single member proposed cutting from the system's allocated funds as they wrangled over how to pay for the repeal of a widely disliked computer services tax passed last fall. State Senate President Mike Miller (D-Prince George's) said the General Assembly purposely tried to take it easy on higher education, because it's been on a funding roller coaster over the past decade or so.

"We're doing our very best to make certain that our flagship is not jeopardized by any budget cuts," Miller said. "We're trying to hold tuition increases-we're trying to keep the same level they've been at for years."

About $300 million in state budget cuts were made last month because of what lawmakers called a down-turning economy, but the system's funding remained largely intact. The General Assembly only cut $6.8 million from what Gov. Martin O'Malley originally proposed.

USM Chancellor William "Brit" Kirwan said the system's governing body will decide in an upcoming meeting whether to freeze tuition for the third year in a row, which is what O'Malley said he hoped for when he wrote the budget in January.

"That's ultimately a decision for the Board of Regents, but it looks like [a tuition freeze] will be the case. That's certainly my recommendation," Kirwan said. "I just think [the budget is] a real tribute to the support we have in Annapolis. We could always hope for more, but as a whole it was a very successful session, especially considering the bad economic times."

Del. Ben Barnes (D-Anne Arundel and Prince George's) said that higher education fared very well compared to many other areas of the budget that faced steep cuts.

"I think it was a big win for higher ed between staving off draconian cuts on the one end of the spectrum and on the other end of the spectrum also staving off any increases in tuition for another year," he said.

Miller attributed the General Assembly's generosity to the governor's influence.

"Martin O'Malley doesn't want to tax middle-class Maryland by increasing tuition, so it's been the governor's policy now for two years, holding tuitions at the same level he inherited it as when he became governor," Miller said. "We really have one of the best-educated workforces in the nations."

Other groups in the state aren't as happy about where legislators decided to make cuts, however. The governor was asked by lawmakers to cut about $250 million from the state budget he put forth in January, and legislators chopped another $300 million from it during initial talks, said Warren Deschenaux, the state's top fiscal analyst.

However, cuts could have been significantly worse. Lawmakers reconvened last November in a special legislative session to increase several taxes, because fiscal analysts were projecting a $1.7 billion debt. They passed the state's largest tax increase in history, which included raising the state sales tax and income tax, as well as taxing services that hadn't been tapped before.

The "tech tax," as it came to be called, would have put a burden on high-tech companies. Opponents argued the tax wasn't being levied in surrounding states. Some companies that launched a lobbying campaign against the tax threatened to relocate to Northern Virginia if the tax was not repealed.

Lawmakers generally agreed that the tax needed to be repealed but sparred over whether to continue cutting from the budget or to increase a different tax.

The Senate produced a three-part plan last week that centered around a temporary increase in income tax that would only affect those who earn more than a million dollars per year, which analysts expect will bring in about $110 million next year. The plan also included a provision to reduce a Transportation Trust Fund by $50 million each year for the next five years. Finally, it asks that O'Malley find a way to cut $50 million from the budget by the end of June.

The House agreed to that plan on April 5, but Republican leaders and several Democrats voiced fierce opposition, saying they had found several other parts of the budget that could have been cut instead.

"I think it's critical we repeal the tax, but I also believe that in this economic time it is not a good idea to raise any further taxes. People are already struggling," said Del. Gail Bates (R-Howard), who is the ranking minority member of the House Appropriations Committee that gives the budget preliminary approval.

"I know the idea of a millionaire tax sounds wonderful," Bates added. "They're millionaires, what's the harm? But these are the same people who make substantial donations to your university. They make substantial donations to nonprofits, in many cases they employ people because the reason they have that kind of income is that some of their business income flows through their personal tax returns.…If you tax them substantially more, what will that do to the other side of the coin? Will they stop making contributions? Will they have to lay off people?"

Montgomery County lawmakers such as Sen. Richard Madaleno (D-Montgomery) found themselves in a particularly challenging position. A large percentage of the state's millionaires live in that county, but many of the new computer and biotechnology companies have been setting up shop there as well. Many of the county's leaders ultimately voted to repeal the tech tax, but Madaleno said he did not agree with raising the millionaire tax.

"With our continuing economic downturn, I do not think that this is a good time for us to be raising additional taxes," he said. "With so much uncertainty in the local economy, with the federal election and the referendum on slot machines, I just do not think that now is a good time to be raising taxes."

Reprinted with permission from The Diamondback.

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