ANNAPOLIS — Gov. Martin O’Malley ordered lawmakers yesterday to return to Annapolis on Oct. 29 to consider his plan to increase the sales tax and legalize slot machines to help close the state’s $1.7 billion budget shortfall.
Mr. O’Malley, a Democrat, asked state lawmakers to pass the budget package he says would reduce taxes for 83.5 percent of Marylanders and said failing to reach an agreement at a special General Assembly session would cost taxpayers an additional $600 million.
Mr. O’Malley said he will reduce the shortfall “in a way that is not only mindful of Maryland’s competitive standing with surrounding states, but is also a lot fairer to the working people of our state, who have been taking it on the chin by wage stagnation and taxation by stealth, taxation by fee, taxation by tool, and taxation by property fee.” The governor would like to conclude the session by Thanksgiving, about six weeks before the regular 2008 General Assembly session begins in January.
Skepticism about Mr. O’Malley’s budget plan and about his chances of success has increased since he ended his statewide tax tour last month.
“The governor has put together a tax plan which he believes benefits 85 percent of voters,” said Senate President Thomas V. Mike Miller Jr., Southern Maryland Democrat. “I think the public is very dubious about that.”
House Speaker Michael E. Busch, Anne Arundel Democrat, was in New York yesterday and unavailable for comment, though he has advised against calling a special session and still opposes legalizing slot machines.
Mr. O’Malley’s tax package also has drawn the attention of national anti-tax activists.
“Instead of cutting spending to deal with the deficit, O’Malley has the temerity to increase government spending and fleece taxpayers’ hard-earned dollars to pay for it,” said Nachama Soloveichk, a spokeswoman for the Washington-based Club for Growth.
Mr. O’Malley has asked lawmakers to increase the state sales, gas, corporate and income taxes and legalize slot machines — either by legislation or through ballot votes in 2008.
He also wants to increase car-titling fees, close corporate-tax loopholes and cut education spending by $207 million in his next budget.
In addition, the plan calls for cutting the state property tax, increasing tax exemptions for senior citizens and decreasing the income tax for low-wage earners.
“There’s one very simple alternative to coming together and forging a consensus, and that is to default,” he said. “The alternative is pretty damaging to the quality of life all of us cherish as Marylanders.”
Mr. Miller said yesterday Mr. O’Malley does not have the support of lawmakers to get the proposal passed and counseled him against calling a special session.
“There is not consensus,” he said. “The governor does not have the votes.”
Legalizing slot machines, an issue that divided lawmakers over the past four years and a priority for Mr. Miller, has again split lawmakers to the point where Mr. O’Malley has said he would consider putting it to a popular vote, or referendum, on the 2008 ballot, rather than tying up the General Assembly.
Mr. O’Malley has struggled to find consensus from Democrats and Republicans, and he has courted Democratic lawmakers to get the votes needed to increase taxes.
The governor said he also called House and Senate Republican leaders Sunday night to let them know his plans.
But Mr. O’Malley’s relations with Republicans — a key voting bloc on slot machines — has frayed since taking office in January.
The governor has said he talks “routinely” with the “Party of Lincoln” and that he has better relations with Republicans than his predecessor, former Gov. Robert L. Ehrlich Jr., a Republican.
But party leaders in the House and Senate have said Mr. O’Malley kept them out of the budget-making process and excluded them from a breakfast for freshman delegates at the governor’s mansion.
Mr. O’Malley “has not consulted with the minority party whatsoever,” said House Minority Leader Anthony J. O’Donnell, Southern Maryland Republican. “Very obviously, they don’t like our plan, so now they’re attacking us.”
House Republicans introduced a budget plan in August that would have capped spending increases and legalized slot machines to avoid tax increases.
House and Senate Republicans have opposed holding a special session to increase taxes, but are outnumbered 137-51 by Democrats in the General Assembly.
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