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Proposed Budget Remedies Include Slots, More Taxes
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But there are no more easy fixes, lawmakers say, particularly with the economy slowing and tax collections remaining sluggish.
Some legislators, including Miller, have pushed to increase taxes or legalize slot-machine gambling this session, arguing that it will be easier to balance the budget next year if they start raising new money now.
But both O'Malley and House Speaker Michael E. Busch (D-Anne Arundel) have counseled a more cautious approach, arguing that the public and new members of the legislature need more time to understand the magnitude of the problem.
O'Malley said he is confident that the need for revenue can be reduced by better management of government by his Cabinet secretaries, about half of whom have not yet been sworn in.
"I'm very reluctant to tell the people they need to cut a bigger check before I've made some cuts myself," O'Malley said.
Republicans, who are in the minority in both legislative chambers, are advocating the need to slow spending. Sen. J. Lowell Stoltzfus (R-Somerset) introduced a bill last week that would cut $270 million from next year's budget, including $159 million planned for the Thornton education initiative.
"We need to have a serious discussion of where we can and should do cuts," Stoltzfus said. "Everyone's talking about revenues."
Here is a look at some of the options lawmakers are contemplating to close the gap.
Sales Tax Increase
Perhaps the simplest way to raise money, lawmakers say, would be to increase Maryland's sales tax, which is 5 percent. Bumping up the rate to 6 percent would yield about $750 million in the 2009 fiscal year, legislative analysts say.
Some lawmakers argue that an increase is justifiable, given surrounding states' rates. Virginia's is 5 percent, but the District's is 5.75 percent, and the rate is 6 percent in Pennsylvania and West Virginia.
One argument against an increase is that it would have the greatest impact on lower-income citizens, for whom the sales tax accounts for a greater percentage of household income.
Taxing Services
Another option, but one that could be more difficult to sell, would be to apply the state's sales tax to services that are now largely exempted.
