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Parties split on call for special session to tackle deficit

10/18/07
By Nate Sandstrom

Howard County Republican lawmakers this week criticized Democratic Gov. Martin O'Malley's decision to call a special session of the General Assembly to deal with a projected $1.7-billion gap in next year's state budget, while local Democrats said they believe the session could prevent the deficit from growing larger.

Meanwhile, local legislators from both sides of the aisle said they are unsure that a majority of the assembly will agree on a series of new tax proposals that O'Malley says are needed to close the gap, particularly his plan to legalize slot machine gambling in the state.

On Oct. 15, O'Malley ordered the assembly to meet for a special session beginning Oct. 29 to consider legislation to overhaul the state's tax code in a way the governor has said will make it fairer o middle- and lower-class residents and address the budget shortfall.

O'Malley proposes to raise the state sales tax from 5 to 6 percent, hike the income tax on the state's wealthiest earners, increase business taxes and double the state cigarette tax to $2 per pack.

He also proposes to cut the income tax rate for the state's lowest earners, cut the state property tax, cut education spending under a measure designed to create more equality in school funding, and legalize slot machines.

Consumers already crunched

Republicans have balked at the proposals, saying that O'Malley should focus on limiting new spending at a time when consumers are feeling the crunch of rising health care and energy costs.

This week, they said that considering tax hikes before the legislature has an accurate picture of the coming year's state budget, which the governor normally releases in January, was bad policy.

"It doesn't make sense to consider additional revenues if you don't have any idea how that money will be spent," said Senate Minority Whip Allan Kittleman, a West Friendship Republican.

O'Malley counters that waiting until the assembly's regular session in January to address the projected shortfall will cause it to grow to $2.2 billion.

Several Howard Democrats said they understand the governor's desire to identify new revenues prior to releasing a budget, adding that they believe they can come up with budget estimates that would be accurate enough to consider O'Malley's plans.

"You can make fairly decent assumptions about where things would go based on the previous (budget) year," said Del. Guy Guzzone, a Columbia Democrat and member of the House Appropriations Committee, which reviews the state budget.

Slots debate the key issue

Under the state's constitution, a special session of the legislature can last 30 days. If no deal is reached by that time, O'Malley could issue a new executive order to extend the session.

"We're confident we'll get the work done in 30 days," said Rick Abbruzzese, a spokesman for the governor, adding that O'Malley hopes the legislature can pass a plan by Thanksgiving.

However, several local legislators said they had less confidence that the assembly could reach an agreement on a plan that includes so many pieces, and particularly the controversial issue of slot machines.

O'Malley has predicted that legalized slots would raise more than $650 million annually.

"It depends on people's desire to resolve this problem," said Senate Majority Leader Edward Kasemeyer, a Columbia Democrat and vice-chairman of the Senate Budget and Taxation committee, which will hear many of O'Malley's proposals. "Ultimately it comes down to the slots issue."

Del. Frank Tuner, a Columbia Democrat who is a member of the House committee that will hear many of the tax bills, said that O'Malley doesn't have enough votes in the House of Delegates to pass a slots bill.

Kittleman added that it remains unclear whether O'Malley could get a slots proposal through the Senate without Republican support, adding that, although some GOP senators might support legalized slots, they oppose passing a bill without a budget.

Some measures could pass

Turner said he believes that lawmakers will pass at least a portion of O'Malley's proposals, including the sales tax increase, even if slots fail. He added that addressing the deficit without a sales tax hike -- which O'Malley projects will raise about $800 million in the next fiscal year -- would be difficult.

If Democrats were so concerned about the projected shortfall, they should have voted for a Republican budget plan for the current fiscal year that, if passed, would have preserved a $1 billion surplus, said Del. Gail Bates, the ranking Republican on the House Appropriations Committee.

"We could have dealt with this last (session)," said Bates, of West Friendship.

Democrats said the GOP plan would have harmed residents' quality of life.