The Democratic leadership of the Maryland House of Delegates yesterday put the brakes on plans to introduce a package of tax increases to solve the state's fiscal crisis, as the Senate president began considering a menu of cuts that would include some of Republican Gov. Robert L. Ehrlich Jr.'s top priorities.
The actions come one day after Ehrlich blasted Democratic lawmakers for what he called "tax and spend" policies that have allowed state spending to spiral "out of control." The moves suggest that Democrats are hoping to refocus the debate on shortcomings in Ehrlich's budget, which they say relies too heavily on accounting gimmicks and leaves the state in the red over the long term.
"To go out and immediately throw taxes on the front burner I think sends the wrong message to the public," said state Democratic Party Chairman Isiah Leggett, who has held several strategy meetings with lawmakers. "Ultimately, you will have to look at revenue enhancements. But first, the public needs to have a clear debate about what is and isn't in the governor's budget."
Montgomery County Executive Douglas M. Duncan (D) has even dropped his push for the gas tax increase he sorely needs to fund a signature plan to build new roads and alleviate traffic in the region. Why bother, he asked county delegates yesterday, when an increase in the state's gas tax would not even replace the money Ehrlich took from the state's primary road building fund to pay for other priorities?
"Democrats are saying, 'This is Ehrlich's budget,' " said Duncan, who is widely viewed as a challenger to Ehrlich in 2006. "Let him fix it. It's got more holes than Swiss cheese."
The state faces a record budget gap of nearly $1.8 billion between revenue and projected spending over the next 18 months. Ehrlich, the state's first Republican governor in more than three decades, proposed to balance the budget with modest spending cuts, one-time fund transfers and revenue from the legalization of slot machines. While Ehrlich's proposal would balance the budget for the next fiscal year, it would leave a $700 million shortfall the next year.
Democrats have struggled to fashion an alternative budget strategy, in part because divided government represents unfamiliar territory for a party that has long controlled all the levers of state politics and because the party is divided internally on slots. Senate President Thomas V. Mike Miller Jr. (D-Prince George's) supports slots, while House Speaker Michael E. Busch (D-Anne Arundel) opposes them.
A poll of 807 registered voters released Thursday showed that legalizing slots was preferred to increasing taxes, 35 percent to 24 percent respectively.
Busch had been working with key House leaders to draft a host of bills that would increase taxes as an alternative to legalizing slots. Proposals ranged from increasing the sales tax and income tax rates on top earners to closing tax loopholes.
House leaders said yesterday that they would hold off on the measures, acknowledging that the plan to introduce them might have been premature.
"The concern, if there was a concern, is that the package needs to be better thought out than the governor's plan," said House Majority Leader Kumar P. Barve (D-Montgomery). "Mike [Busch] isn't Joe Stalin. He governs with the consent of the House. For there to be consensus, there has to be an informed debate, and we're not there yet."
Some Senate Democrats said they saw the move as backpedaling by Busch, who is new to his post. "Retreat! Retreat!" joked one Senate fiscal leader, Sen. P.J. Hogan (D-Montgomery). "They jumped out a little too quick without looking at the whole picture."
Busch said his decision to hold back the tax bills does not represent a significant shift in strategy. "You don't need to have the [actual] bills on the table," Busch said. "Let's have the discussion first and then see where we're going to go."
Meanwhile yesterday, Miller received a menu of $450 million in additional cuts to state spending that he had asked legislative fiscal analysts to assemble. The list contains cuts that would target many of Ehrlich's priorities, including Medicaid funding, aid to local governments and a $30 million package of initiatives to benefit the disabled, the elderly, juvenile offenders and the public defender's office.
Miller said Senate fiscal leaders ultimately will decide "whether they're going to do the dirty work for Governor Ehrlich" by cutting the budget.
"The public expects us to downsize. Then and only then should tax increases be considered," said Miller, who met yesterday with Busch and agreed to consult weekly on the budget and other matters.
Ehrlich spokesman Paul E. Schurick said the governor welcomes any effort by lawmakers to cut spending. "We have said all along that state government needs to shrink," Schurick said. "We welcome any and all attempts to make it smaller."
He exempted, however, attempts that would strike at Ehrlich's priorities.
"The governor's initiatives are aimed at helping some of the most vulnerable and needy people in Maryland," Schurick said. "These are needs that must be met even in an austere fiscal year."
Staff writer Craig Whitlock contributed to this report.