By John Wagner
Washington Post Staff Writer
Wednesday, October 25, 2006
Maryland's two leading candidates for governor tangled over taxes yesterday, with Gov. Robert L. Ehrlich Jr. and Baltimore Mayor Martin O'Malley stepping up efforts to exploit weaknesses in the other's fiscal record just two weeks before the election.
Holding the first in a series of events to contrast his record with that of his Democratic challenger, Ehrlich ticked off several "burdensome tax hikes" on Baltimore residents since O'Malley was elected in 1999: a 20 percent income-tax increase, higher water and sewer fees, a new tax on cellphones and an energy tax on nonprofit groups.
"This is the record of someone who wants to represent working families? Forget it," Ehrlich said at an event at Arundel Mills Mall. "People aren't buying it."
But O'Malley suggested that it was Ehrlich who would have a hard time selling his fiscal stewardship as responsible.
"I look forward to a comparison of records with $3 billion Bob," O'Malley said at a news conference on transportation.
O'Malley was referring to his campaign's tally of the cumulative effect of tax, fee and toll increases imposed on Marylanders during Ehrlich's tenure. The O'Malley campaign's $3 billion figure is similar to tallies by nonpartisan legislative analysts.
Ehrlich has kept a promise not to raise income or sales taxes. But he agreed to a significant increase in the state property tax and in fees that Marylanders pay when they register their vehicles, pay sewage bills and file corporate documents with the state.
In a news release, the O'Malley campaign branded Ehrlich "the biggest tax and spender in Maryland history." That claim rests in part on a 31 percent increase in state spending that has occurred in the past four years.
Ehrlich aides say much of that spending can be attributed to growth in the state's health insurance program for the poor and education spending increases mandated by the legislature -- neither of which Ehrlich has much control over.
Yesterday's skirmish was the most intense so far over taxes in a campaign dominated by such issues as crime and education. Neither candidate has spotlighted the other's tax increases in TV ads -- in part because they recognize their own vulnerabilities, aides suggest.
Ehrlich and O'Malley inherited challenging budgets upon assuming office.
Ehrlich had combined deficits of about $2.1 billion in the first two budgets he faced. After several rounds of revenue increases and spending cuts -- and a boost in the economy -- the governor is finishing his term with a surplus, which he emphasized yesterday.
Left unmentioned was that legislative analysts are forecasting more trouble down the road. By fiscal 2009, the state will face a nearly $1.3 billion shortfall in revenue needed to pay for existing programs, analysts say.
O'Malley, who took office in late 1999, also faced budget shortfalls that forced painful cuts, including the closure of fire stations and libraries earlier in his tenure. He took credit yesterday for stabilizing his city's budget, modest property tax cuts and recent budget surpluses.
O'Malley aides suggested that the tax increases during the mayor's tenure have been more modest than Ehrlich suggests.
Baltimore's income tax has risen from 2.54 to 3.05 percent -- up about 20 percent. But the rate remains lower than those in six Maryland counties, including Montgomery and Prince George's.
Increases in the city's water and sewer rates have been driven largely by $900 million in facility upgrades required by a 2002 consent decree that ended a federal lawsuit that sought to reduce sewage overflows in Baltimore. The average family's annual water and sewer fees in Baltimore are about $760, up from $400 when O'Malley took office, according to City Hall.
During O'Malley's tenure, the city imposed the same telecom tax on cellphones that it does on land lines, a move that other jurisdictions have taken.
Ehrlich aides took issue yesterday with O'Malley lumping fee increases in the tally of Ehrlich's tax increases. As a matter of policy, the governor has sought to rely more heavily on fees that are earmarked for particular spending initiatives than on broad-based taxes.
The tally included one measure O'Malley has supported, the Chesapeake Bay restoration fee, initiated in 2004. The $2.50-a-month "flush tax," a surcharge on sewer and septic users, is earmarked for upgrades at sewage treatment plants, with the goal of reducing nitrogen pollution in the bay.
Under Ehrlich, motor vehicle fees have also been increased to help pay for road projects. The upshot is that most drivers pay an average of $128 every other year to register their car, up from $81. Truck and sport-utility vehicle owners pay $180 every two years, up from $108.
In 2003, Ehrlich agreed to a budget deal that would balance the budget by raising the state property tax rate nearly 5 cents. The Board of Public Works, on which Ehrlich sits, endorsed the increase. For the owner of a $400,000 home, that translated into $192 a year in added property taxes.
In the latter part of his term, Ehrlich made several attempts to roll back part of the increase -- eventually persuading his colleagues on the board to knock 2 cents off the rate this year.
Appearing at the New Carrollton Metro station, O'Malley also announced yesterday that, upon taking office, he would appoint a panel of legislators and transportation experts to develop a 10-year plan for funding initiatives.
Ehrlich's transportation secretary, Robert L. Flanagan, chided O'Malley after the announcement.
"All Mayor O'Malley could come up with is a plan to make a plan?" Flanagan asked.
View all comments that have been posted about this article.