Thursday, January 17, 2008

ANNAPOLIS — Gov. Martin O’Malley yesterday introduced his $31.5 billion budget for Maryland in fiscal 2009, which includes increased spending on the environment, community colleges and public safety.

The budget — the second in Mr. O’Malley’s four-year term — has 5.7 percent more in state spending than his first budget. And it uses much of the revenue from the new taxes approved during the recent special General Assembly session to cover the increases.

Mr. O’Malley, a Democrat, delivered his budget in the face of concerns from state lawmakers that the stagnant economy will drive down revenues and undo efforts made during the special session to close a more than $1.5 billion shortfall.

“It has put a lot of work in jeopardy,” said Senate Finance Chairman Thomas M. Middleton, Southern Maryland Democrat. “It’s a scary thing with the way the economy is going. If we have a budget write-down come March, we’ve got some very serious decisions to make.”

Maryland’s budget leaders said the major factors are a downturn in local housing sales and the likely credit crunch that would follow, which would slow the money flow into state coffers and likely cause a new budget shortfall.

In addition, consumer confidence across the country has dropped, as Maryland lawmakers look to the newly increased state sales tax for a greater source of income.

“It’s a very scary time,” Mr. O’Malley said. “It’s a time when a lot of Marylanders are hurting, having a very difficult time paying the bills.”

The governor called lawmakers back to Annapolis in November for the special session to cut the billion-dollar shortfall.

The Democrat-controlled Assembly passed $1.4 billion in taxes and $550 million in budget cuts in a grueling three-week session.

Republican leaders, who opposed the session to the point they filed a lawsuit to overturn its results, said the time to fix the budget was during Mr. O’Malley’s first session in Annapolis.

“They based all their numbers on the most optimistic of assumptions,” said Senate Minority Leader David R. Brinkley, Frederick Republican. “In time, it will prove a big mistake.”

Comptroller Peter Franchot, the state’s chief tax collector and fiscal watchdog, cautioned lawmakers last month about the potential for less revenue because of declining home sales and the resulting credit troubles.

But Mr. Franchot, who staunchly opposed the special session, said yesterday he feels no vindication.

“They passed the biggest tax increase in Maryland history right as we were going into a recession,” he said. “That just adds to the unpredictability of the revenues.”

Economists say the soft economy could result in lawmakers having to find $100 million to $200 million more in cuts or taxes — roughly the same amount they approved in the special session through the increased sales taxes and expanding taxes to computer services.

Much of the increased tax burden — including increases in the corporate income tax, the state sales tax and the expanded taxes on computer services — slams Maryland businesses, which will further slow economic growth, said Anirban Basu, chairman and chief executive officer of the Sage Policy Group.

The desire to increase taxes or cut the budget was drained from most lawmakers during the special session, in which they also approved a measure to ask voters in November whether to legalize slot machines to generate additional state revenue.

“Nobody looks forward to any of that,” said House Speaker Michael E. Busch, Anne Arundel Democrat. “That’s just the economy you have to face.”

He said lawmakers would likely cut spending before considering new taxes to cover a new shortfall.

Mr. O’Malley lost public support after the tax increases were approved during the special session, according to two polls over the past several weeks. A third poll, released in the past several days, showed Mr. O’Malley and the Assembly’s approval ratings have dropped.

However, Mr. O’Malley downplayed the poll numbers.

“I make decisions based on what’s best for the people,” he said. “I volunteered to serve and what’s in their best long-term interest.”


Saying nooses have replaced white hoods and burning crosses as symbols of racial hate, some Maryland lawmakers have proposed making it illegal to place one on someone’s property as a threatening gesture based on race or another protected class.

“Nooses seem to be becoming the premier symbol of racism today,” said Delegate Saqib Ali, Montgomery Democrat, who co-sponsored one of two bills a House committee debated yesterday.

The anti-noose bills would expand harassment and property-damage laws to make it a felony to hang a noose as a symbol of racial hatred to intimidate.

Noose hangings, which do not violate state law, have popped up around Maryland in the past year. A noose was discovered in October at the University of Maryland at College Park, near a building that houses several black campus groups. And a noose was found hanging from a classroom door at Kent Island High School last month after a fight between a white student and a black student.

But Maryland lawmakers from both parties questioned the noose-bill sponsors yesterday about whether their plan is constitutional. No other state makes noose displays a hate crime; New York lawmakers have considered but not approved one.

“Do you no longer have the right to hate?” asked Delegate Michael D. Smigiel Sr., Cecil Republican.

Bill sponsors offered to change their legislation to ban hateful displays of weapons, not just nooses, to satisfy free-speech concerns. But that only brought up more questions from lawmakers.

Sponsors conceded they had work to do on their noose ban to make sure it would pass constitutional muster. But they argued Maryland needs to find a way to make it illegal to hang nooses as a racial threat.

“There’s a real need for a criminal penalty for the people who commit these acts,” said Delegate Herman L. Taylor Jr., Montgomery Democrat.

This article is based in part on wire service reports.

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