- The Washington Times - Monday, January 1, 2007

ANNAPOLIS — Funny thing about campaign promises: Most of them cost money.

That could prove dicey for Gov.-elect Martin O’Malley, a Democrat who analysts say faces a bleak fiscal future because expenses may outstrip tax revenues in the coming years.

That gives Mr. O’Malley limited wiggle room to find money for programs such as school construction and Chesapeake Bay cleanup.

Lawmakers expect the budget to dominate their time in upcoming sessions as Mr. O’Malley tries to pay for his ideas without raising taxes.

“The No. 1 priority for the state of Maryland is the structural budget deficit,” said House Majority Leader Kumar P. Barve, Montgomery Democrat.

Though Maryland is banned by law from having an unbalanced budget, a structural deficit exists, meaning that the state’s pocketbook will be empty in future years unless spending slows or taxes increase.

The projected gap over the next four years is about $5.8 billion, a sum greater than the so-called deficit Gov. Robert L. Ehrlich Jr., a Republican, inherited when he took office four years ago.

Despite the gloomy prediction, lawmakers and Mr. O’Malley say they will stall any major fiscal changes for at least the next few months. That means no deep spending cuts and no tax increases during Mr. O’Malley’s first legislative session, which begins Jan. 10.

Using a euphemism for tax increases, Mr. O’Malley has said that he does not plan to propose “revenue enhancements” during his first session.

Top lawmakers also sounded cautious when asked about Maryland’s finances.

A committee that suggests spending levels to the governor has proposed that state spending in the fiscal year that starts in July grow by about 7.9 percent, or $1.45 billion.

If the recommendation is followed, as is the custom, the state operating budget next year would be more than $19.8 billion.

House Speaker Michael E. Busch predicted that taxes or spending cuts would wait past this year.

“Everybody ought to take a deep breath and see where all the money is being spent,” before new taxes are considered, said Mr. Busch, Anne Arundel Democrat.

Senate President Thomas V. Mike Miller Jr. took a similar tack when asked about the looming deficit.

“We have enough really bright people in state government who understand the budget to help us get something done,” said Mr. Miller, Prince George’s Democrat.

However, he acknowledged that fiscal problems are going to pop up before he retires in 2010.

“We do have to find a way to continue to pay for services. … Somehow, someplace, somebody is going to have to pay for it, and it’s going to be the Maryland taxpayer,” he said.

Delegate Sheila Ellis Hixson, who heads the tax-writing Ways and Means Committee, said that before raising taxes, Democrats likely will put together a group to examine state finances.

“It’s time for Maryland to look and see what we have and what we need,” said Miss Hixson, Montgomery Democrat.

Mr. Ehrlich and other Republicans have predicted that Democrats will raise taxes to meet the shortfall.

Mr. Ehrlich himself raised state property taxes to ease the crunch. He later lowered property taxes.

“The big issue is where we’re spending the state’s resources,” said Sen. Allan H. Kittleman, Carroll Republican.

Mr. Kittleman said Republican lawmakers will “keep the heat on” Democrats to trim spending to avoid tax increases.

Incoming Senate Minority Leader David R. Brinkley was blunt about the prospects for higher taxes under Mr. O’Malley: “absolutely.”

“I foresee it,” said Mr. Brinkley, Carroll Republican.

One revenue source debated for at least four years is slot-machine gambling. Mr. Ehrlich unsuccessfully promoted it as a way to ease drooping income, and Mr. O’Malley has expressed support, too.

However, Mr. O’Malley has said that he wouldn’t suggest the state legalize slot machines this year, and gambling opponent Mr. Busch has told reporters that he doesn’t see the House approving them in the short term.

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