About 20 percent of taxpayers will see smaller state income tax refunds, and Maryland will significantly shift how it pays for teacher pensions, under a budget proposal released by Gov. Martin O’Malley on Wednesday aimed at closing a $1.1 billion deficit.
The Democrat outlined a $15.3 billion general fund budget plan that includes about $311 million in new revenue. About $182 million will come from capping income tax deductions and phasing out exemptions. O’Malley said on average, a family of four with annual income of about $150,000 will pay $191 more.
The governor’s plan would cap income tax deductions at 90 percent for incomes above $100,000 and 80 percent for incomes above $200,000.
It also would reduce exemptions from $2,400 to $1,200 per person for singles who make between $100,000 and $125,000 and couples who make between $150,000 and $175,000. Exemptions would be eliminated for singles who make more than $125,000 and couples with incomes above $175,000.
Republicans quickly criticized the governor’s plan, which must be approved by the Democrat-controlled General Assembly by the end of the legislation session in April.
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