By John Wagner
Washington Post Staff Writer
Thursday, August 16, 2007

House Republicans put forward a plan yesterday to solve Maryland's fiscal problems without raising taxes, proposing instead to curtail planned spending on education and other programs and to legalize slot-machine gambling.

The plan calls for limiting overall growth in state spending next year to 3.5 percent, compared with current projections of 8.5 percent. Republicans would rely on $600 million from auctioning licenses to operate slot machine parlors at a half-dozen locations in Maryland.

House Minority Leader Anthony J. O'Donnell (R-Calvert) called the plan "a very credible, and in my opinion, very well-thought-out alternative" to proposals from leading Democrats to raise taxes to help close a budget shortfall of nearly $1.5 billion in the state's $15 billion general fund budget next year.

But the Republican plan drew immediate criticism from Democrats for its lack of detail. The plan provides targets for spending reductions in nine broad areas but does not spell out the implications for specific programs.

Spending on public education, for example, would grow by 2.3 percent next year under the GOP plan, instead of the 5.9 percent that budget analysts say is needed to keep pace with surging enrollments and the requirements of Maryland's landmark 2002 Thornton education program, designed to pour tens of millions of dollars into school districts.

"They leave open the details to just how one reaches that solution," said Gov. Martin O'Malley (D), who was briefed on the plan Tuesday night by Republican leaders.

O'Donnell said Republicans know what funding would need to be reduced but decided against providing the details for fear that political opponents would exploit them.

"We know where they are, but we're not going to allow the diversion of the discussion," O'Donnell said. "We're not laying that marker out now."

Republicans hold 37 of 141 seats in Maryland's House of Delegates, so their plan is unlikely to greatly influence debate.

The political implications may be far greater. O'Malley and Democratic legislative leaders are talking openly of possible increases in sales taxes, income taxes, gas taxes and other levies. Republicans, reeling from the loss of the governor's mansion last year, are hopeful that a backlash from voters could brighten their prospects in 2010.

The presentation of the GOP plan at a news conference yesterday offered a preview of their arguments.

"The working families of Maryland can ill-afford to pay new taxes," said House Minority Whip Christopher B. Shank (R-Washington). "We do not have a revenue problem in the state of Maryland. We have a spending problem."

O'Donnell acknowledged that the legalization of slots is not supported by all 37 members of the GOP caucus, some of whom have moral objections to gambling.

Unlike most slots proposals that have been floated in recent years, the GOP plan presented yesterday would generate revenue immediately by auctioning licenses to operators who accept the lowest share of proceeds. Future proceeds would be split among operators, the horse racing industry, the state and local governments.