- The Washington Times - Monday, January 31, 2005

ANNAPOLIS — Maryland Democratic legislative leaders say they will not seek new taxes during the current General Assembly session despite a report from their fiscal adviser that the state spends more money than it collects.

“I did it last year, and no one seems to want to address the issue,” House Speaker Michael E. Busch said of proposing a tax increase. “So we are not initiating any further action until there is some interest.”

Last year, Mr. Busch, Anne Arundel Democrat, proposed a $640 million tax increase as an alternative to Gov. Robert L. Ehrlich Jr.’s plan to legalize slot-machine gambling. The governor proposed using slots revenue for education.

Meanwhile, Senate President Thomas V. Mike Miller Jr., Prince George’s Democrat, said he also has no plans to “broaden the sales tax or increase the income tax.”

“We want to continue to work with the administration to pass a slots bill on the Senate side,” said Mr. Miller, Prince George’s Democrat.

Before the start of the session last month, the General Assembly levied a 2 percent tax on health maintenance organization premiums. Revenue from the HMO tax will be used to subsidize doctors’ malpractice-insurance premiums, which have risen about 70 percent in the past two years.

The Democrat-controlled legislature imposed the tax by overriding Mr. Ehrlich’s veto of a medical malpractice insurance reform bill that included the levy, even though the governor warned that HMOs would pass on the cost of the tax to their customers.

Several HMOs have said they will increase customers’ premiums to pass on the cost of the tax.

Last month, Warren Deschenaux, the legislature’s chief fiscal adviser, said Mr. Ehrlich’s proposed $25.9 billion budget was balanced with $900 million worth of one-time fixes.

Mr. Deschenaux, director of the Office of Policy Analysis, said the plan would increase spending by 7.7 percent, as much as $300 million more than the goal set by budget committees. He told House and Senate budget committees that the Ehrlich budget “doesn’t provide durable solutions to the fact that our revenues don’t match our desire to spend.”

Mr. Deschenaux also predicted that the deficit facing lawmakers in fiscal 2007, which begins in 1 years, will be about $850 million.

Mr. Busch, who pushed for a $640 million increase in income and sales taxes last year, said that even though he has ruled out introducing new taxes this year, he does not regret his past efforts.

“I regret not coming up with a solution to the budget problem,” he said. “I think we are at a point where we are just passing the cost along to the local governments.”

Mr. Ehrlich, a Republican, has worked against levying new taxes, saying slot machines could bring as much as $800 million in annual revenue.

“The governor has had a plan for three years to fully fund education and effectively end any fiscal challenges, but the House of Delegates have to act on it, and that is slots,” Ehrlich spokesman Henry P. Fawell said.

Mr. Miller has backed Mr. Ehrlich’s slots proposal, but Mr. Busch has killed the legislation in the House in the past two years.

• This article is based in part on wire service reports.

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