By John Wagner
Washington Post Staff Writer
Thursday, June 7, 2007

Maryland Gov. Martin O'Malley (D) rejected a $30 million-a-year proposed increase in motorist fees, acting yesterday hours after a Republican senator accused him of a "sneak attack" on taxpayers' wallets.

The Motor Vehicle Administration had proposed higher fees starting next month for about three dozen services, including raising the cost of a driver's license renewal from $30 to $40 and that of a title certificate from $23 to $30.

Aides to O'Malley said MVA officials were trying to comply with laws championed by former governor Robert L. Ehrlich Jr. (R) that require the agency to recover nearly the full cost of its services through fees charged to motorists.

But in a statement issued yesterday afternoon, an O'Malley spokesman said the increases would not take effect, and aides said the governor had never seriously contemplated letting them be implemented.

"Constantly raising these hidden fees and taxes is not consistent with Governor O'Malley's beliefs, and they are not going forward," said Stephen J. Kearney, O'Malley's communications director. He also said Republicans were being hypocritical for criticizing fee increases prompted by legislation that most of them supported under Ehrlich.

The episode highlighted the political challenges facing a governor who ran as a champion of "working-class families" when the state faces an array of budget problems, including a looming $1.5 billion shortfall that lawmakers say will almost certainly require tax increases next year to close.

During last year's campaign, O'Malley was highly critical of Ehrlich, accusing him of "jacking up" fees on services such as vehicle registrations, sewer bills and visits to state parks. Ehrlich highlighted that he held the line on income and sales taxes. O'Malley argued that the fee increases were just as bad, in part, he said, because they hit lower-income families harder.

Yesterday morning, Sen. E.J. Pipkin (R-Queen Anne's) sought to turn the tables, calling the MVA's proposed fees "the first step in the tax-and-spend crowd's effort to fix the $1.5 billion budget deficit."

"Our hard-working families are strapped with exorbitantly high gas and electricity prices, and to now face dramatic increases in motor vehicle fees is unconscionable," Pipkin said in a news release that had O'Malley aides scrambling to respond.

Pipkin also accused the administration of trying to raise fees by "sneak attack."

State law allows the MVA to increase fees, a process the agency initiated in March by notifying a legislative review committee. The proposed increases were revised and forwarded to the committee last month.

Although the move was not widely publicized, the new fee schedule was posted on the MVA's Web site several weeks ago, and notices have been going out in driver's license renewal notices, said Jack Cahalan, a spokesman for the Department of Transportation. O'Malley's picture is featured atop MVA's home page, as it is with many other state agencies' Web sites.

The legislative committee had tentatively scheduled a public hearing on the issue next week at the request of Senate Minority Leader David R. Brinkley (R-Frederick). The panel's co-chairman, Sen. Paul G. Pinsky (D-Prince George's), said yesterday that he expected the regulations would have been approved.

"This was not any end run or anything out of the ordinary," Pinsky said. "There are some Republicans who think any fee increase is raising taxes, but you've got to run the MVA."

Cahalan said MVA officials were aware that O'Malley might reject the fee increases and had started preparing to deal with a $31.3 million reduction in a budget of about $180 million.

Cahalan said much of the revenue from fee increases would have been used for "service enhancements" such as software upgrades. "The customer is not going to see an impact today," he said. "There's no hard decisions yet on how we will adapt."

In a separate move yesterday, legislative leaders asked their staffs to start preparing an analysis of how deeply state services would need to be cut to close the state budget shortfall if taxes are not raised.

The joint letter sent by Senate President Thomas V. Mike Miller Jr. (D-Calvert) and House Speaker Michael E. Busch (D-Anne Arundel) appeared to be a first step in preparing the public for the need to raise additional revenue.

"Everybody in the General Assembly knows that there needs to be revenue increases if you're going to balance the budget and continue to fund education," Busch said in an interview.

Said Miller, "We're making sure the problem is defined."