O'Malley Increases Influence With Wins on Taxes and Slots
Md. Legislators Praise Effort, Flexibility

By John Wagner
Washington Post Staff Writer
Tuesday, November 20, 2007

Gov. Martin O'Malley emerged from a grueling special session of the Maryland General Assembly with big wins on tax and slot machine legislation, praise from lawmakers for his willingness to tackle the state's most vexing issues -- and greatly increased clout in Annapolis.

Less clear, as O'Malley (D) and bleary-eyed legislators celebrated at a bill-signing ceremony yesterday, were the wider political ramifications of pushing through $1.4 billion a year in tax increases during a frantic three-week session called to solve the state's chronic budget problems.

"How it plays politically is still up in the air," said Sen. Brian E. Frosh (D-Montgomery). "Will people recognize it as hard choices that had to be made or as government run amok? But by any measure, the governor did an incredible job pulling it together. He was buttonholing people. He was schmoozing people. I don't know if he was threatening people. At points, it was ugly, but it was certainly an impressive effort overall."

By the time they adjourned shortly after 2:30 a.m. yesterday, lawmakers had raised the state's sales, corporate income, tobacco and vehicle titling taxes. And they had overhauled the personal income tax system, which will result in high-end earners paying more.

The legislature also embraced O'Malley's proposal to hold a referendum on legalizing 15,000 slot machines, a truce on an issue that had poisoned the relationship of the legislature's two Democratic presiding officers and had ended in stalemates when Robert L. Ehrlich Jr. (R) was governor.

Lawmakers voted to direct O'Malley to make $550 million in cuts in next year's budget, to expand access to government-subsidized health care and to raise an additional $400 million a year for transportation priorities.

"This is the boldest move, the boldest action, on the part of any governor I've served with," Senate President Thomas V. Mike Miller Jr. (D-Calvert), who has served with six other governors, said as he sat with O'Malley and House Speaker Michael E. Busch (D-Anne Arundel) at the afternoon bill-signing.

O'Malley shared the credit yesterday. "We have overcome a tremendous challenge, and it would not have been possible without everyone working together," the governor said.

Miller told reporters that the tax increases could do short-term damage to O'Malley's standing in the polls. But he predicted that the governor, who is nearing the end of his first year in office, would bounce back once voters realized more fully that he had fixed fiscal problems that he inherited.

Republican observers predicted the damage would be deeper and last longer, with voters seeing the Democratic governor as a tax-and-spender until O'Malley stands for reelection in 2010.

"If there's a negative stereotype and you take action to prove the stereotype, it's a problem," said Republican strategist Kevin Igoe.

"We'll see how people react when they start paying these taxes," said Senate Minority Leader Allan H. Kittleman (R-Howard). "There's no question people will remember this."

Others said it was remarkable that O'Malley had steered the session to a conclusion where such judgments were possible.

In the weeks before its start Oct. 29, Miller and Busch counseled O'Malley against calling such a broad session, saying lawmakers could wait to fix the budget until their regular 90-day session, which begins in January, rather than on a rushed schedule that presented many potential pitfalls.

The divergent views of the two presiding officers on slots alone could have resulted in a quagmire that might have jeopardized other legislation. Miller is among the legislature's most ardent slots supporters. Busch has been the most powerful foe of expanded gambling in recent years.

O'Malley's proposal to put the issue to voters proved crucial to the session's success. Miller, a gregarious lawyer, initially balked at the idea, calling a referendum "the sissy way out." But he eventually seemed to realize that it was the only way to advance the issue, given continued resistance in the House to a stand-alone bill.

Busch, who maintains the disposition of the high school football coach he once was, agreed to help O'Malley bring anti-slots delegates on board for a referendum vote. He relayed the governor's argument that a public vote would put a draining issue behind them.

Lining up votes for the slots and tax bills was still challenging.

After a previously scheduled dinner speech Thursday night to the liberal group Progressive Maryland, O'Malley commandeered a side room at the site and had aides bring in delegates in the audience who were undecided on a slots referendum.

Debate on the House floor, less than 24 hours later, ended with 86 delegates backing O'Malley's proposal, one more than the required supermajority.

Lawmakers and O'Malley aides said such meetings were typical.

They said little was explicitly promised in exchange for legislators' votes. Rather, they said, O'Malley and other administration officials would outline what programs and projects would be possible with new revenue from slots and tax increases as well as the consequences of budget cuts as an alternative. Lawmakers said they were also left with the general impression that administration officials would remember who helped them.

In some cases, inducements were offered. The Prince George's County delegation secured the promise of state funding for its hospital system.

O'Malley also benefited, lawmakers said, from being willing to bend on specific proposals in a way that his Republican predecessor was not. Montgomery legislators balked, for example, at O'Malley's plan to establish a top income rate of 6.5 percent, saying it would harm the economic interests of the jurisdiction, which is home to more high-income earners than any other in Maryland. O'Malley accepted a compromise of 5.5 percent.

"I think the governor showed immense skill in being flexible enough to make changes," said Barbara Hoffman, an Annapolis lobbyist and former Democratic senator from Baltimore. "He didn't draw lines in the sand."

Del. Tom Hucker (D-Montgomery) said O'Malley won points for his openness to lawmakers' ideas and a work ethic that contrasted with that of Ehrlich, whose tenure Hucker derided as "four years of press conferences and golf."

Lawmakers were also motivated to take tough votes by fear of the session's failure, said Montgomery County Executive Isiah Leggett (D), who was visible in Annapolis in closing days as he tried make the package more friendly to Montgomery and bring more delegates on board.

"If this had failed, it would have had negative consequences for him, for his leadership, his credibility and for the party," Leggett said of O'Malley.

Hoffman said O'Malley might have been hobbled in his relations with the legislature for the remainder of his term if the session had ended in a stalemate.

"He's now proven his chops, so to speak," she said.

There was as much talk at yesterday's bill-signing about the future as there was about having addressed the state's budget woes and reached a compromise on slots.

"This is a day to move Maryland forward," Busch said. "It puts all the demons behind us."

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