Maryland Gov. Martin O’Malley (D) on Wednesday floated the idea of raising the sales tax from 6 percent to 7 percent, saying the revenue could help address shortfalls in both the state’s operating and transportation budgets.
“That’s what I’d like to do,” O’Malley said in a radio interview, just hours before the General Assembly was scheduled to convene at noon for its annual 90-day session.
O’Malley cautioned that he can’t enact such decisions on his own, and aides scrambled to make clear such a proposal is unlikely to be included in the budget proposal O’Malley submits to the legislature next week.
“He floated it. He did not commit to doing it,” O’Malley spokeswoman Raquel Guillory told reporters shortly after O’Malley left the site of the radio interview, which was taped in front of a live audience in Annapolis. “You have to propose a budget that has an opportunity to pass.”
In a brief interview following the taping, Senate President Thomas V. Mike Miller Jr. (D-Calvert) called the idea of raising the sales tax “a non-starter.”
Legislative analysts say the increase would generate more than $600 million a year in revenue at a time when the state is facing a shortfall of close to $1 billion in its $14 billion operating budget.
O’Malley is likely to propose increases in the state gas tax and so-called “flush tax,” which would be used to fund transportation projects and water-and-sewer upgrades — projects the governor says will create jobs.
Increases in those taxes are more likely to pass the legislature this year, though neither is considered a sure thing.
O’Malley, who appeared at the “Annapolis Summit,” hosted by radio personality Marc Steiner, said part of the proceeds from a sales tax increase could be earmarked for transportation projects, while the rest could be used to close an operating budget shortfall.
A sales tax increase could reduce significantly any cuts O’Malley must propose to state agencies and government programs.
“That one penny could solve that operating problem,” O’Malley told Steiner.
O’Malley left the site of the taping without taking questions from reporters.
Maryland lawmakers last voted to raise the sales tax in 2007, during a special session called by O’Malley. At the governor’s urging, the tax was increased from 5 percent to 6 percent to help close a gaping budget shortfall at the time.
Miller and House Speaker Michael E. Busch (D-Anne Arundel) appeared jointly on the same radio taping in the hour before O’Malley.
Miller said he is confident a gas-tax increase could pass his chamber.
Busch said the fate of an increase would rest in large part with the ability of county executives in large jurisdictions, including Montgomery and Prince George’s counties, to convince state lawmakers that it is needed.