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First Click, Maryland -- Will state taxes rise in 2011?

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Thursday, August 26, 2010:

The Agenda
Aaron.jpgTwice in the last seven days the campaign of former Gov. Robert L. Ehrlich, Jr. (R) has tried to lure reporters to "major" policy announcements. They turned out to be promises to restore some transportation funding cuts to counties and to give retired military veterans bigger tax credits.

Ehrlich military pensions.jpgBut a pledge Ehrlich made on Wednesday not to raise new taxes or fees if returned to power in Annapolis seemed capable of becoming a far bigger force in Maryland's gubernatorial race between now and November.

For months, Ehrlich and Gov. Martin O'Malley (D) have traded shots over one another's records on taxes and spending. For most, it's been a hard-to-follow fight full of claims and counterclaims. The Post and others have written lengthy stories trying to parse the rhetoric.

Ehrlich's pledge on Wednesday, however, seemed to turn the campaign message away from that muddled fight and back to a simple theme that Republicans in the General Assembly began pushing early this year: If O'Malley wins a second term, Marylanders will face a massive tax increase. Mix in Ehrlich's new promise not to raise taxes or fees and the message loop is now complete. Ehrlich is a safe bet for your pocketbook, the campaign is saying, while O'Malley is not.

Brown outside HQ.jpgTeam O'Malley has seemed to see this move coming for a while and has for weeks been working to undermine Ehrlich's credibility. The campaign has charged that Ehrlich has so often said one thing and done another when it comes to taxes and spending that he can't be trusted. Taking a turn as the campaign's front man on Tuesday, Lieutenant Governor Anthony G. Brown ratcheted up the attack.

"We know that Bob Ehrlich is good at making budget-busting campaign promises," Brown said. "But we also know from Bob Ehrlich's failed record that he just can't keep a promise. Bob Ehrlich says he wants to lower taxes, but he raised taxes."

Regardless of your politics and which candidate you believe, the back-and-forth has brought into focus serious and hard-to-answer questions about what happens to Maryland's budget in 2011. How big will the state's shortfall be? And what new taxes or deep spending cuts will be needed to bring it into balance? (After employing $2 billion in accounting maneuvers in the last two years to close gaps, budget analysts say it's almost definitely one tough decision or the other).

At last count, Maryland was expected to face a budget shortfall of $1.6 billion next year. State revenues have slightly exceeded dismal projections in recent months, but the gap is still expected to be roughly the same.

Ehrlich has vowed not to raise taxes or fees, but he has also said he is against furloughs of state workers, and will increase the veterans' tax credits and restore some funding to local governments.

Taken together, Ehrlich's campaign promises amount to hundreds of millions of dollars that were not included in this year's state spending plan. He has not provided a blueprint for where the funding for those initiatives would come from, but it is clear that something would have to give. Shaving spending on social services or education may be among the most likely sources since they are the state's two largest annual costs.

On the other side, O'Malley has said he has no plans to raise taxes next year but has not ruled out the possibility to do so. Momentum in the General Assembly was also building this spring for tax increases on alcohol and corporations.

The General Assembly's Democratic leadership squashed those efforts before the election saying it was not the right time with the economy still suffering, but many in Annapolis believe a tax increase, at least on alcohol which has remained unchanged for decades, is likely in 2011 if a Democrat remains in the governor's mansion.

Even with higher taxes on liquor and beer, the next governor will have to find more than a billion dollars next year in additional cuts or new revenue -- and that's just the beginning. Barring an unexpectedly fast and furious economic recovery, Maryland is expected to face shortfalls of at least $1 billion or more for each of the next four years.

-- Aaron C. Davis


News You Should Know

omalley-with navy sec.jpgO'Malley credited for bringing military into fold on Chesapeake Bay cleanup
Navy Secretary Ray Mabus and EPA Administrator Lisa P. Jackson both credited Gov. Martin O'Malley on Wednesday for conceiving of the first gathering of base commanders from the 68 military installations within the Chesapeake Bay watershed to promote conservation efforts. Jackson characterized O'Malley and Maryland as a leader in the effort, but also said the Chesapeake was such a high federal priority because "the commander in chief said so." Somewhat cryptically, Jackson also said she knew military leaders had gotten phone calls from "important people" urging them to attend. Mabus said the military was already working to upgrade waste-water systems on bases and to begin other efforts to limit runoff, but he declined to put a price tag on what the military would contribute to efforts to protect the Chesapeake. -- Aaron C. Davis

Maryland GOP says gun shot broke campaign office window
A gunshot appears to have shattered a glass door to a Maryland Republican Party field office on the Eastern Shore early Tuesday. The office was closed and no one was inside when the incident occurred, according to police and the state Republican party. Salisbury police discovered what appeared to be run-of-the-mill vandalism early Tuesday when a glass pane in the office's front door was found to be shattered. But when a Republican Party staffer arrived Tuesday morning and opened the door, the worker discovered a bullet inside, said Ryan Mahoney, a party spokesman.In a statement, Maryland Republican Party Chairman Audrey Scott said the act was deeply concerning. -- Aaron C. Davis

Muse, Miller on the Baker bandwagon in Prince George's
"Members of Maryland's General Assembly often are thought to have a fair amount of influence in Prince George's politics, so the endorsements of county executive hopeful Rushern Baker by State Sen. C. Anthony Muse, and Senate President Thomas V. Mike Miller could prove helpful to the Baker campaign in the Sept. 14 Democratic primary," writes The Post's Miranda Spivack. "They join State Sens. Jim Rosapepe and Paul Pinsky, who have already backed Baker, which means half of the county's Senate delegation have taken sides in the race."


Quotables

"This is a no-brainer of all no-brainers. ... We want military retirees to live in Maryland."
-- Former Maryland governor Robert L. Ehrlich Jr. (R) saying he would seek to exempt the pension income of Maryland military retirees from taxation, making good on a promise to veterans that he said was broken by legislative leaders.

omalley-navy.jpg"Thanks to the flush tax ... that one's headed in the right direction, too."
-- Gov. Martin O'Malley on Wednesday crediting Ehrlich's fee on sewer and waste-water treatment systems for helping to inch the state toward one of its goals of reducing emissions into the Chesapeake Bay.

-----

Trust First Click for critical news and analysis you need to navigate Maryland politics. Each Monday and Thursday, First Click brings you The Agenda, a concise, forward-looking analysis of a top development in politics or policy. "News You Should Know" breaks down top stories from across the state. And other features keep you up to speed with power brokers in Annapolis and beyond. Want First Click on the go? Sign up for our free e-mail edition, and get the news delivered to your inbox or mobile device.

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By Aaron C. Davis  |  August 26, 2010; 7:18 AM ET
Categories:  First Click  
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Next: Currie reports inconsistencies in campaign account

Comments

Didn't ehrlich promise not to raise taxes before being elected governor the first (and only) time?
He then went on to raise over $3 billion dollars in taxes and fee's on Marylanders.

How stupid and forgetful does he think Maryland voters are?

Ehrlich is a liar.

Posted by: MarilynManson | August 26, 2010 8:52 AM | Report abuse

Bob "user fees are not taxes" Ehrlich should be ashamed of himself. Please people go to the polls in November and stop his lies.

Posted by: mike51 | August 26, 2010 9:16 AM | Report abuse

My bet is that taxes/fees will rise no matter who wins.

For me the issue is who is in the pocket of receipients of state spending and will raise them the most.

Posted by: RedBird27 | August 26, 2010 10:54 AM | Report abuse

Ehrlich should concentrate on the 20% increase in the state sales tax.
Governors who raise the state sales tax almost always lose re-election.

Posted by: robinficker | August 26, 2010 12:20 PM | Report abuse

you can tell when ehrlich lies about taxes; his lips move.

Posted by: MarilynManson | August 26, 2010 12:25 PM | Report abuse

the national and state economies are so bad now and could get potentially much worse by next year, no matter who the next gov is, taxes are bound to go up. There is no way to cut enough state services or state employees to make up the estimated billion dollar deficit projected for next year. Only question is, which special interests will be protected and who will pay the most. All a matter of political priorities.

Posted by: VikingRider | August 26, 2010 1:39 PM | Report abuse

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