Maryland fiscal leaders got a first look yesterday at the options for closing an estimated $1.8 billion gap in the state budget, including tax increases on income, consumer purchases, gasoline, cigarettes and liquor and new taxes on food and seven categories of services.
"If it moves, we'll tax it. If it doesn't move, we'll tax it. If it moves too slow, we'll tax it. If it moves too fast, we'll tax it," state Sen. Robert R. Neall (D-Anne Arundel) joked darkly before a meeting of a special state commission studying Maryland's fiscal structure.
At the meeting, commission members received a briefing from policy analysts for the nonpartisan Department of Legislative Services that included five pages of potential budget cuts, tax increases and other revenue-generating ideas worth more than $5 billion.
Some commission members found the list so alarming that they urged policy analysts to make clear on the commission's Web site and in public documents that no one has endorsed any of the items.
"I don't want the public thinking that Democrat Pete Rawlings is buying into all this," said Howard P. Rawlings, a Baltimore lawmaker who chairs the House Appropriations Committee. "It needs to be clear that these are not embraced by this group."
Warren Deschenaux, the legislature's chief fiscal analyst, agreed that the list represents nothing more than "things for you to consider. We were invited by the chairman to let it all hang out." The list, he said, remains "just a staff document."
The commission, chaired by former state budget secretary Fred Puddester, is expected to issue a report next month making recommendations to Gov. Parris N. Glendening (D), Gov.-elect Robert L. Ehrlich Jr. (R) and legislative leaders about how to balance the state's $21.6 billion budget.
Slumping tax revenue and eight years of dramatic expansions in spending have left the state facing a deficit of nearly $600 million in the current fiscal year and a projected shortfall of nearly $1.2 billion in the fiscal year that begins in July.
Ehrlich has promised not to raise taxes during his first year in office, and his spokesman, Paul Schurick, dismissed many of the ideas presented yesterday as "unpalatable."
But, Schurick said, "the answer to the budget crisis is probably in there somewhere."
The good news, relatively, for Ehrlich is that fiscal analysts believe legalizing slot machines -- a cornerstone of Ehrlich's campaign for governor -- could raise as much as $800 million annually. That figure assumes that 2,500 slot machines are placed at each of the state's four racetracks and that each of the machines generates $217 in profits each day. Most analysts say the state's share of the profits could amount to about $400 million a year.
Other options for generating revenue include selling off a portion of Maryland's future income from a national lawsuit against cigarette makers, raising the top income tax rate to 6 percent, eliminating deductions for home mortgages and charitable contributions, increasing the sales tax to 6 percent from 5 percent, doubling the tax on alcohol, and taxing for the first time business and professional services and food.
Options on the list of budget trims include cutting aid to local governments by more than $190 million and cutting the salaries of state workers by 1 percent and increasing their rates for health care.