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First Click, Maryland
A review of two records on revenues

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36 days until the Maryland elections

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Monday, Sept. 27, 2010:

The Agenda

WagnerEven the casual observer of the Maryland governor's race has no doubt heard Gov. Martin O'Malley (D) knock his Republican predecessor for "jacking up taxes and fees by $3 billion." It's a common line on the stump and in campaign ads.

The number is based on an analysis by Maryland's nonpartisan Department of Legislative Services of revenue increases that took place during former governor Robert L. Ehrlich's four-year tenure. The figure -- actually $2.9 million -- requires some explanation, and it is unfair to pin the full total on Ehrlich (R). But more on that in a moment.

Thumbnail image for O'Malley bill signing.jpgA newer DLS analysis is now circulating that provides close to an apples-to-apples comparison of revenue increases during O'Malley's four years. That figure: $3.6 billion (a higher number than the Ehrlich era but lower than some, including the Ehrlich campaign in a recent Web ad, have suggested).

In the final five weeks of the campaign, voters are certain to be treated to cacophony of numerical claims from both sides, some more firmly rooted in reality than others. The DLS numbers are probably as objective as we're going to get, so they seem worth exploring.

First off, the numbers are "cumulative," meaning they are intended to measure the additional revenue that resulted across all four fiscal years that began while Ehrlich and O'Malley were in office.

The state property tax, for example, was raised early in Ehrlich's term, so DLS scores the impact of that tax increase as $170.8 million in fiscal year 2004, $185.1 million in 2005, $205 million in 2006 and $132 million in 2007 -- for a cumulative impact of $692.9 million.

Secondly, it is important to note that the analyses do not take into account how the revenue increases originated.

Ehrlich scoff.jpgThe Democrat-led legislature, for example, approved an HMO tax during a 2004 special session to subsidize doctors' medical malpractice insurance costs and to enhance Medicaid coverage. Ehrlich vetoed the bill that included the tax, but his veto was overridden by the legislature. Still, nearly $190 million in revenue increases attributable to the HMO tax are included in the analysis during Ehrlich's tenure.

Moreover, the definition of "revenue measures" in the analysis is broader than just tax and fee hikes. The Ehrlich-era total includes his better-known fee increases, including those on vehicle registrations, sewer systems and corporate filings. But Ehrlich's tenure also includes several "tax compliance measures," which are hardly the political sin these days that tax and fee increases have come to be.

The O'Malley-era total includes some revenue related to the state's fledgling slot-machine gambling program and speed cameras initiative.

But the $3.6 billion figure is almost entirely attributable to a 2007 special session in which multiple taxes were raised in an effort to fix the budget, and the imposition of a temporary "millionaires' tax" in 2008.

The 2007 tax measures included an increase in the personal income tax on high-end earners, as well as increases in the sales tax, corporate income tax, tobacco tax and vehicle titling tax.

The four-year impact of the special session is scored at $4.2 billion. O'Malley's overall figure is brought down some by backing out the impact of a tax on computer services, however. Lawmakers passed that tax in 2007 but repealed it in 2008 before it took effect. The four-year impact of the "tech tax" alone would have been $661.5 million, according to the analysis.

Got all that? We can promise it won't be the last time you'll hear some of these numbers between now and Nov. 2.

-- John Wagner

News You Should Know

O'Malley to appear at White House for jobs bill signing
Obama side view.jpgMaryland Gov. Martin O'Malley (D) on Monday will stand alongside President Obama as Obama signs the Small Business Jobs Act, O'Malley's office says. The White House invitation appears to be a nod to O'Malley's role in helping to craft a slice of the $30 billion dollar bill and in lobbying other governors to support it. It offers a high-profile opportunity for O'Malley to counter the campaign message of former governor Robert L. Ehrlich Jr. (R) that he would do more for small businesses if returned to power. But it may be an even bigger chance for O'Malley to appear with Obama -- who remains far more popular in Maryland than nationally.
-- Aaron C. Davis

Proposed sales tax cut a defining issue in governor's race
cash register.jpg"To win his job back, former Maryland governor Robert L. Ehrlich Jr. promises to roll back the state's sales tax rate to where it was when he left office. That might be good for consumers, but it could cost the Maryland treasury more than $600 million a year -- and Ehrlich has yet to say how he would pay for it," writes The Post's John Wagner. "The Republican's pledge has emerged as the costliest promise by far in a competitive rematch with Gov. Martin O'Malley (D), and the implications extend well beyond the price tag."

New Ehrlich ad hits O'Malley on utility rate relief, economy
"Former Maryland governor Robert L. Ehrlich Jr. (R) launched a new television ad Friday that makes that argument that Gov. Martin O'Malley (D) has not delivered on promised electricity rate relief and that he is 'making stuff up' about the state's economic progress," writes The Post's Wagner. "The 30-second spot, which is airing only in the Baltimore market, attempts to undercut one of O'Malley's most powerful arguments against Ehrlich in their 2006 campaign: that O'Malley would deliver rate relief for BG&E customers at a time when Ehrlich had become too cozy with the industry."

Harris taps anesthesiologists for cash in congressional bid
Thumbnail image for Harris mug.JPG"Minnesota anesthesiologist Mark A. Warner freely admits he doesn't know who represents Eastern Maryland in Congress. But he knows who he wants for the job: Andy Harris, the Republican challenger to Frank Kratovil, the district's Democratic incumbent," writes The Baltimore Sun's Paul West. "In his second run at the seat he missed narrowly two years ago, Harris has worked hard to raise money from fellow doctors around the country. Anesthesiologists from at least 39 states and the District of Columbia have responded by pumping more than $250,000 into his campaign, according to Federal Election Commission records, making them far and away the largest single interest fueling Maryland's most competitive House race."

Hollywood Casino Perryville set to open three days early
Thumbnail image for Perryville2.jpg"Maryland's first slots casino is officially cleared to open its doors to the public Monday -- three days ahead of schedule -- after state officials issued the Hollywood Casino of Perryville an operating license," writes The Sun's Andrea K. Walker. "Maryland Lottery Director Stephen Martino signed the license Sunday evening allowing Penn National Gaming, the owner of the casino, to begin operations after a successful trial run of the facility on Saturday. "'Everything is a go and we will open at 8 a.m.,' said Marc DeLeo, director of marketing at the casino. 'We will open our doors as the first casino in the state. We passed all the tests, and they gave us the go ahead.' "

Baker seeks big changes without alienating political base
Thumbnail image for baker kickoff.jpg"Rushern Baker III, who won the Democratic nomination for Prince George's County executive, watched as his friend Adrian M. Fenty made bold and sometimes controversial changes as D.C. mayor, especially school reform, which Baker, too, has promised," writes The Post's Miranda Spivack. "Then, on Sept. 14, as Baker won in Prince George's, he saw Fenty, criticized for having lost touch with even his closest supporters, get booted out of office. But Baker, who has no Republican opponent on the Nov. 2 ballot and is soon to take the reins in Prince George's, is optimistic that his pledges to remake his county's political and fiscal culture and improve its lagging public schools can be accomplished without alienating his reform-minded political base."

Quotables

Stink bug.jpg"If we fail to take action ... damage from this insect could prove to be a national crisis."
-- a letter Friday to Agriculture Secretary Tom Vilsack and EPA Administrator Lisa P. Jackson, signed by members of Congress from Maryland, Pennsylvania and three other states under siege by the brown marmorated stink bug

"Laws that are secondary are better than doing nothing, but not much better."
-- Jonathan Adkins of the Governors Highway Safety Association, on a Maryland law that takes effect Friday making it a "secondary offense" to use a handheld cellphone without a hands-free device


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Trust First Click for critical news and analysis you need to navigate Maryland politics each weekday. You can also find First Click on Facebook and Twitter.

By John Wagner  | September 27, 2010; 6:45 AM ET
Categories:  First Click, John Wagner  
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