Mr. O'Malley's Test

Maryland's governor forges ahead with a special session on his tax package.

THE NEXT few weeks should reveal whether Gov. Martin O'Malley's first major act of leadership in office -- convening a special session of the General Assembly to revamp the state's creaky tax structure and close a looming $1.7 billion deficit -- has been cunning, audacious and carefully considered, or just plain foolhardy.

For Mr. O'Malley (D), the special session, which starts tomorrow, is a swan dive into uncertainty. Legislative leaders have warned him that the votes are not yet there for his ambitious proposal combining a tax overhaul with a major spending initiative on health care, not to mention the most contentious issue of all -- legalizing slot machine gambling. His pathway to success is further clouded by the fact that Senate President Thomas V. Mike Miller Jr. (D-Calvert) and House Speaker Michael E. Busch (D-Anne Arundel) -- the legislature's two key players -- share a mutual disdain that neither seems able to overlook or overcome. Nor does recent history provide much consolation for Mr. O'Malley: His predecessor, Robert L. Ehrlich Jr. (R), called special sessions twice in three years to address pressing issues; both times he lost control of the proceedings and got stuck with bills he heartily disliked.

Mindful of the political obstacles, Mr. O'Malley has adopted a strategy of extreme pragmatism. He has offered a plan -- higher taxes on sales, corporations, cigarettes and vehicle titling, plus a more progressive income tax and a property tax cut -- while signaling that he is willing to entertain almost any modification. The pragmatism is good; but the question is whether the governor is so eager, or desperate, for a deal that he is ready to throw sound policy to the wolves.

He has already done so by proposing a higher sales tax but declining to apply it to most consumer services. And, instead of suggesting a broad-based sales tax, the governor has blown with the political winds by pressing ahead on slot machine gambling. Not only are slots tantamount to a tax on the poor, as the governor acknowledges, they also tend to sap spending on other products and services, since household budgets are finite. Moreover, by pushing a referendum to break a long-standing legislative deadlock on slots, Mr. O'Malley is enabling lawmakers to evade their most important responsibility: to cast votes and make decisions on tough issues.

In other respects, the O'Malley plan is more enlightened. By increasing corporate income taxes and closing loopholes, he would ensure that firms pay their fair shares. By cutting income taxes on the lowest earners and raising them on the highest ones, he would ditch the state's antiquated flat tax in favor of a much-needed progressive structure. (A competing proposal by Montgomery County Executive Isiah Leggett (D) serves the interests of his wealthiest constituents but is no improvement; it would spread the burden of a tax increase much more broadly on middle-class earners while easing the impact on the rich.)

Explaining his decision to press ahead with a special session, Mr. O'Malley said it would be "irresponsible not to try." In one important sense he is right: By waiting to address the deficit until the legislature's regular session next year, the state would dig itself $500 million deeper into the hole. Having inherited the deficit, Mr. O'Malley will now be judged on his performance in fixing it.