Maryland Gov. Robert L. Ehrlich Jr. is facing a rebellion from the conservative wing of the Republican Party over his administration's newfound willingness to consider tax increases, and GOP lawmakers threatened yesterday that such a move could cost him votes on his signature plan to legalize slot machines.
"In politics, you don't step on your base, and our party's base didn't elect him to raise taxes," said Del. Herbert H. McMillan, an Annapolis Republican who chairs the House's new, 25-member Taxpayer Protection Caucus. "There has to be someone to pull the governor back to the right and back to the principles that got him elected."
Throughout last fall's campaign, Ehrlich managed to keep the conservative wing of his party supportive and silent, despite differences over his views on abortion, gun control and gambling. Yesterday's criticism marked the first open rift between Ehrlich and his party's right.
It came a day after Ehrlich and administration officials met privately with Democrats who control the General Assembly and signaled a willingness to raise property and business taxes to help solve the state's historic budget crisis. Yesterday, Ehrlich spokeswoman Shareese DeLeaver said the meetings were "an attempt to find common ground" and said the governor has reached no final decisions.
"The talk [Wednesday] was very preliminary in nature," she said. "At this stage in the game, this mini-revolt is premature. Nothing is a done deal."
Ehrlich campaigned on a platform to restore fiscal stability to a state government that he said has grown out of control because of Democratic tax-and-spend policies. With the state facing a record budget shortfall when he took office, Ehrlich proposed balancing the budget with cuts, one-time accounting maneuvers and revenue from slots. He said repeatedly that he would veto any sales or income tax increases, a position he continues to hold.
Budget talks evolved after Ehrlich was forced to rewrite his slots bill and decrease the state's take, and this week new revenue projections showed the state was in worse fiscal shape than anticipated. Even if the slots measure passes, lawmakers are faced with a $410 million hole.
Democrats widely praised Ehrlich's latest move on taxes, but it has splintered the GOP. Some argue that Ehrlich, the first Republican governor in more than three decades, inherited the fiscal crisis and has little choice but to try to strike a compromise.
Sen. Robert H. Kittleman (R-Howard) sits on the Senate Budget and Taxation Committee, where he and others have been working to slash the budget, and he is sympathetic to Ehrlich's plight. "I'm as anti-tax as anyone, but I understand more than some the impacts of these cuts," he said.
But there are reservations in other quarters. Ehrlich needs every GOP vote he can muster to pass his bill to legalize slots at four of the state's horse racing tracks. Many in the Republican caucus are only reluctant supporters, justifying their position as a way to stave off tax increases.
House Minority Leader Alfred W. Redmer Jr. (R-Baltimore County) warned that "there is nowhere near a majority willing to support slots and taxes. If there is a budget deal that ties together slots and taxes, there will be a dramatic loss of Republican support for slots."
The most volatile measure on the table involves increasing the state's property tax by 5 cents, raising an estimated $165 million next year.
Sen. Larry E. Haines (R-Carroll) said he finds that hard to swallow because voters are already struggling to keep up with rising property tax assessments. "It's really hitting the hardest-working families," he said.
Senate Minority Leader J. Lowell Stoltzfus (R-Somerset) acknowledged the concerns but said he is hopeful some Republicans will be swayed once administration officials explain their rationale in a meeting today.
By law, the state's debt service is supposed to be funded with the property tax. But earlier Democratic administrations chose not to increase the rate to pay the interest on money they borrowed, dipping into the state's general fund instead. "Previous administrations spent too much money," Stoltzfus said, "and we are in a deep, deep hole."
House Speaker Michael E. Busch (D-Anne Arundel), who has clashed with Ehrlich over slots, defended the governor.
"It's easy to be on the sidelines criticizing," Busch said. "But as far as I'm concerned, [Wednesday's] meeting was the first really productive one we've had. I give the governor a lot of credit."