- The Washington Times - Friday, March 14, 2003

A spokesman for Gov. Robert L. Ehrlich Jr. acknowledged yesterday that increases in property and corporate taxes are being considered to close Maryland's $1.8 billion budget deficit.
But the governor remains opposed to raising income and sales taxes, Ehrlich spokesman Henry Fawell said.
"He met with the Senate president and the House speaker, and they reviewed a number of spending reductions and alternative revenue sources that were presented by the Department of Legislative Services," Mr. Fawell said. "Every option presented is now on the table, with the exception of the taxes he has pledged to veto sales and income tax."
Mr. Ehrlich insisted during his campaign that he would not increase taxes, promising instead to raise enough money by allowing slot machines at four racetracks in the state. However, demands from the racing industry recently forced him to submit a revised plan that includes reduced licensing fees for slot operators, which cuts the expected revenue in fiscal 2004 from $395 million to $165 million.
Republican lawmakers were upset yesterday by the reports that the governor might have initiated a proposal to increase property and corporate taxes. They also urged him to focus on more spending cuts to close the budget gap.
"The governor needs to know that those in the party are against a tax increase. It is wrong. It is not why we were elected," said Delegate Herb McMillan, Anne Arundel County Republican and chairman of the Maryland Taxpayers Protection Caucus, a group of 25 state lawmakers that has pledged not to support tax increases.
Responding to the reports that the governor had suggested the tax increases, Mr. McMillan said he has neither seen a tax-increase proposal from Mr. Ehrlich nor heard him talk about one.
"Until I hear the governor say something, I do not agree it is his proposal," he said.
Mr. McMillan suggested Mr. Ehrlich instead cut government jobs and scale back a proposal to give $148 million more to Maryland public schools in fiscal 2004.
"But when you start fudging around and say 'property tax' increases … you are on a slippery slope where people's trust is concerned," he said.
Mr. McMillan also said some residents had their property tax assessments increase more than 100 percent this year and that another one would hurt small businesses, homeowners and especially retirees on fixed incomes.
Mr. Ehrlich's supporters said yesterday that the governor has never closed the door on increasing property and corporate taxes.
Senate Majority Leader J. Lowell Stoltzfus, Somerset County Republican and a member of the taxpayer protection caucus, said he was opposed to tax increases, but he acknowledged that "we are in a very difficult situation because of the past administration, and we need to save significant amounts of money in many areas."
Mr. Fawell said increasing taxes would be an "absolutely last resort" for the governor.
Sen. Janet Greenip, Anne Arundel County Republican, said any tax-increase proposal would be "very sad" and a last option.
"What we have to do is tighten the belt and see where we can save money," she said.
Maryland Taxpayers Association President Dee Hodges said she felt "very negative" after hearing that Mr. Ehrlich was considering a tax increase.
"In a time when a lot of Marylanders have lost their jobs, it will slow down our recovery," she said.
Delegate John R. Leopold, Anne Arundel County Republican, said he would support only a gas-tax increase and only if the money went into a transportation trust fund.
He also said the proposed tax increases came from the Department of Legislative Services.
"His first and foremost priority is to bring funds to Maryland by making further reductions to government," Mr. Fawell said. "It is not appropriate that the burden should be placed on the taxpayer."

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