Legislators Promise No Tax Increases

State lawmakers this week warned the current budget situation in Maryland could be worse
this year than last when a special General Assembly session was called to
address the problem, but each said further reductions in spending would likely
supersede any new tax increases.

Ocean City’s Economic Development Committee (EDC) hosted a
legislative meeting with several of the area’s state representatives this week
to discuss the burning issues facing the General Assembly in the upcoming
session. While the slots issue dominated much of the meeting, no less important
was the discussion on the state’s burgeoning structural deficit, which is
expected to come in at around $500 million again this year.

Of course, the two
issues go hand in hand with slots being counted on in some circles to inject
millions of dollars in new revenue into the state’s economy should voters
decide in November to approve the gaming machines. Short of that, state
lawmakers will likely have to make drastic cuts in spending to offset the
budget shortfalls this year as raising existing taxes or creating new one does
not appear to be an option.

Just one year removed
from a special session during which Governor Martin O’Malley’s sweeping tax
reform package was passed by the General Assembly in answer to the state’s
deficit problem, many of the lawmakers in attendance at the EDC meeting on
Wednesday said there is neither the political will nor the public support to
suggest new tax increases again this year.

“As we go forward, any
budget fixes will have to come from reductions,” said Ocean City Chamber of
Commerce lobbyist Dennis Rasmussen. “I believe there will be no new taxes this
year. The General Assembly has said that.”

Sen. Lowell Stoltzfus
(R-38) agreed there was likely no support on either side of the aisle for
increasing taxes or creating new ones this year.

“I would say it’s not a
good idea to increase taxes, especially in a tough year,” he said. “I don’t
think you’ll see any new taxes suggested this year. It’s just not politically
viable right now.”

With tax increases
apparently off the table and the slots issue still up in the air, it appears
state lawmakers will have to tighten the state’s collective belt and look to
serious reductions in spending to attack the projected $500 million deficit
going into next year’s assembly session.

“It sure looks like
we’re in for a bumpy ride,” said Stoltzfus. “We’re starting at $500 million in
the hole and we might get up to $1 billion next year. For one thing, although
the numbers aren’t out yet, it looks like revenue will be down about $200
million less than was projected.”

Rasmussen agreed the
$500 million figure projected appears to be accurate. He further agreed the
number will likely increase without significant reductions in spending or
increases in revenue, whatever the source might be.

“We are at least $500
million short,” he said. “It’s probably going to get worse before it gets
better. I don’t think we’ve seen it bottom out yet.”

Still smarting from the
grueling one month special session last fall, legislators are preparing to
return to work to face many of the same problems they faced last year. At least
one, Delegate Norm Conway (D-38-B), who is on the front lines of the debate as
chairman of the House Appropriations Committee, isn’t relishing the prospect of
picking up where the assembly left off last year.

“That special session
was the 22 days from hell,” he said. “Those were the toughest 22 days in all my
years in the assembly.”

Conway said despite the projected deficit, Maryland was in solid
fiscal shape for the most part compared to some of its neighbors. During the
EDC meeting on Wednesday, he tallied off an impressive list of state economic
rankings that show Maryland
at or near the top. Nonetheless, Conway
said legislators would have to put aside partisan bickering in order to achieve
the desired results this year and held out hope his colleagues would do so.

“I’m convinced people
are ready to sit down and talk,” he said. “We need to come up with some common
ground areas. When we do that, there isn’t anything we can’t overcome in this

Delegate Page Elmore
(R-38A) agreed avoiding partisan grandstanding would help resolve the state’s
budget issues and called on his colleagues to put an end to it.

“Every legislator,
Republican or Democrat, has to take a stand and say enough is enough,” he said.
“Partisan politics is the worst thing that can happen in any state including Maryland.”

However, no sooner did
Elmore call for an end to partisan politics than he went back on the offensive.

“I really question the
governor’s spend-and-spend and tax-and-tax approach,” he said. “When you look
back on that special session, it took O’Malley almost 30 days to convince his
own party to embrace his tax increase package.”

Elmore said the extensive
tax package ultimately passed last year has been particularly hard on the rural
areas of the state including the Lower

Eastern Shore residents cannot afford the tax increases passed
last year,” he said. “The rest of the state looks at the hard working families
on the Lower Eastern Shore as ATM machines
with endless amounts of funds.”