- The Washington Times - Thursday, September 20, 2007

TOWSON, Md. — Gov. Martin O’Malley made public yesterday his plans to raise taxes on Maryland’s top wage earners to help cut the state’s $1.5 billion budget shortfall.

Mr. O’Malley, a Democrat, expects that the increase — along with legalizing slot machines and increasing taxes on sales, gasoline, cigarettes and corporate income — will generate roughly $2 billion.

The public announcement in Baltimore County — which the O’Malley administration named a “kitchen table talk” — was the first of several scheduled into next week to discuss the proposed budget.

“On some things there will be tax relief, and on some things we will have to pay more,” Mr. O’Malley said. “At the end of the day, what you will see is that collectively a majority of us will be treated more fairly.”

The governor also officially said he will call for a special General Assembly session to close the budget deficit — likely to convene in early November.

Mr. O’Malley expects to raise $163 million from the income-tax increases, which range from 1.25 percent to 1.75 percent, starting with single residents whose taxable income is at least $150,000 and married couples whose taxable income is $200,000 or more — about 4 percent of Maryland residents.

The other 95 percent of Marylanders would see a modest decrease in their income taxes — about $90 a year for single filers and up to $176 annually for married taxpayers.

Mr. O’Malley put off work on the budget shortfall earlier this year, choosing instead to transfer $1.2 billion out of state savings to close a $1 billion gap in his first budget.

He began his budget pitch Monday with separate, closed-door sessions with Senate President Thomas V. Mike Miller Jr., Southern Maryland Democrat, and House Speaker Michael E. Busch, Anne Arundel Democrat.

On Tuesday, he spoke privately with top Assembly budget leaders, but no Republican lawmakers were invited.

The deadline for Mr. O’Malley to file is budget is January, when lawmakers return to Annapolis for the 2008 General Assembly session.

Sarah Achenbach hosted Mr. O’Malley, her neighbors and reporters at her modest, single-family home in Towson.

Mrs. Achenbach, who spent days cleaning for the visit, said she wants to make sure public services aren’t cut as lawmakers figure out how to make up the shortfall.

“It’s a lot to digest, these are complicated issues,” she said. “Public education and pubic safety, to us, are top priorities. Hopefully, they will remain untouched.”

She and her husband, Jason Knott, have one son in Baltimore County public schools and another whom they expect to start at public school in a few years.

Mrs. Achenbach supports many of Mr. O’Malley’s proposals — including the gas- and sales-tax increase — but was leery of having slot machines in Maryland, a key part of Mr. O’Malley’s revenue package.

Mr. O’Malley proposal is a compromise package that includes priorities from Mr. Busch and Mr. Miller and new administration proposals, including the increases in personal-income taxes.

Mr. Busch has been a longtime supporter of increasing the state sales tax but opposes slot machines. Mr. Miller has long supported a gas-tax increase and legalizing slot machines, but only recently has he begun to support the sales-tax increase.

However, some parts of the proposal confused Mr. Miller and other key lawmakers.

Mr. Miller said after meeting with the governor Monday that the gas-tax increase would not be part of the plan.

An O’Malley spokesman said yesterday the governor plans to tie the tax to annual increases in the cost of construction materials, which would guarantee an annual increase in the gas tax.

Other lawmakers said 83 percent of Marylanders would have their income tax cut under the plan, even though the plan states rates would be cut for 95 percent of Marylanders.

“The governor is trying on another suit, and today it is Mr. Populist — Progressive,” said Senate Minority Leader David R. Brinkley, Frederick Republican.

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