- The Washington Times - Thursday, May 1, 2003

ANNAPOLIS Gov. Robert L. Ehrlich Jr. voted yesterday to increase the state property tax by nearly 60 percent, saying it was necessary to resolve the budget problems he inherited.
   The 4.8 cent increase, from 8.4 cents to 13.2 cents per $100 assessed value, will cost the owner of a $200,000 property about $96 more a year.
   It will generate $165 million to help pay the debt service on the state’s bond issues, which will free up the same amount in the general fund previously used to pay the service.
   The Maryland Constitution calls for property taxes to pay for the service, but money from the general fund had subsidized the payments for at least 20 years.
   When Mr. Ehrlich removed the subsidy in his March budget proposal, the state’s Board of Public Works had to adjust the property-tax rate to comply with the laws.
   Mr. Ehrlich said the increase was needed to protect the state’s AAA bond rating, which guarantees the state low interest rates when borrowing money.
   “You don’t fool around with a AAA bond rating,” he said
   Mr. Ehrlich said the increase would help to reduce the$2 billion budget deficit for fiscal 2004, which begins July 1. He also said the budget crisis resulted from irresponsible spending by his predecessor, Gov. Parris N. Glendening, a Democrat.
   The increase was approved unanimously yesterday by Mr. Ehrlich and the other two members of the public works board, Comptroller William Donald Schaefer and Treasurer Nancy K. Kopp, both Democrats.
   "An era of fiscal responsibility is now here in this state," said Mr. Ehrlich, who called the board the "vanguard of that effort."
   Since the beginning of his campaign for governor, Mr. Ehrlich has pledged to balance the budget by cutting government spending, not increasing taxes.
   Even after approving the property-tax increase yesterday, he maintained his no-tax-increase position.
   "There are no taxes this administration is going to sign up on," he said.
   Mr. Ehrlich has blocked nearly $3 billion in new taxes proposed this year by Democratic lawmakers. He also has vowed to veto $137 million in new corporate taxes approved by the legislature.
   The corporate-tax veto is expected May 21.
   Mr. Ehrlich also has vowed to repeal the property-tax increase next year, though Mr. Schaefer and Mrs. Kopp have their doubts.
   "I think you are saying something the taxpayers want to hear," Mr. Schaefer said. "You are going to keep [the rate] where it is unless you have a windfall that I don't think you are going to have."
   However, he also defended Mr. Ehrlich.
   "He does not want to do it," said Mr. Schaefer, who has previously served as governor and Baltimore mayor. "He must do it to pay off the bonds. … You have no choice."
   Mr. Schaefer also blamed Mr. Glendening, calling the budget problems the former governor's "masterpiece of destruction."
   David Paulson, spokesman for the Maryland Democratic Party, said Mr. Ehrlich's promise to repeal the tax is political cover.
   "I see it as a kind of half-baked piece of spin designed to make himself look better when it comes to taxes," Mr. Paulson said. "He still goes around saying, 'I held the line on taxes.'"
   The Maryland Taxpayers Association, a nonpartisan group promoting long-term reductions in taxes, was disappointed with the increase but optimistic about Mr. Ehrlich's promise to reverse it.
   "The property tax hits home to people in a way that a lot of other taxes don't," said Richard Falknor, the group's vice president.

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