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O’Malley proposes more taxes for more jobs

O’Malley proposes more taxes for more jobs

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ANNAPOLIS — Gov. Martin O’Malley called for tax hikes Wednesday in his State of the State address, urging lawmakers to weigh those “tough choices, the costs and the trade-offs” against the jobs he hopes to support through increased spending on infrastructure.

The governor’s $35.9 billion budget includes more money for schools and wastewater treatment plants, and he said he will formally introduce legislation to raise taxes on gasoline “in the next few days.”

“I know that this is a very, very difficult task,” O’Malley told the joint session of the General Assembly just three weeks into what promises to be a busy and contentious session. “But nobody else is going to do this for us.”

The transportation proposal would phase in the 6 percent sales tax on gasoline over three years and eventually raise an estimated $613 million annually. O’Malley, a Democrat, said Wednesday it would support some 7,500 jobs through road, bridge and transit projects and ease the state’s nation-leading congestion.

“With a growing population and aging infrastructure, we might soon pay an even steeper price because bridges are not like trees,” the governor said. “They do not grow stronger or broader with age.”

O’Malley also implored lawmakers to support his proposals to double revenues from the “flush tax” to pay for more wastewater treatment plants, spend $372 million on school construction and raise taxes on the top 20 percent of Maryland earners.

The governor also visited same-sex marriage, his top social issue this year, in the 33-minute speech.

“It is not right or just that the children of gay couples should have lesser protections than the children of our families in our state,” he said.

Most of the speech, however, was focused on O’Malley’s taxes-for-jobs proposals, a tack the governor said was necessary after years of cuts to planned spending.

“Every passing year leaves fewer and fewer responsible choices for cutting,” he said

Republicans tore into the governor’s fiscal record.

“He’s anything but frugal,” said House Minority Leader Anthony J. O’Donnell, R-Calvert and St. Mary’s. “The budget he submitted this year is $1 billion bigger than it was last year.”

While some have quibbled with the size of the governor’s transportation proposal, business leaders have applauded the governor for seeking tax increases to pay for more construction projects.

“The reality is that the transportation and mobility is a top issue for the future of the state,” said Greater Baltimore Committee President and CEO Donald C. Fry, who watched O’Malley’s speech from the gallery.

Fry said he was particularly encouraged by the governor’s promise that his proposal would protect the new transportation dollars from budgetary raids.

House Speaker Michael E. Busch, D-Anne Arundel, praised O’Malley for a “straightforward” assessment of the state’s top issues, including transportation.

“There’s no easy way to come up with the transportation revenue, but you can’t just put it off for the next set of elected leaders,” he said.

Serious discussion of O’Malley’s proposal will likely wait until the final weeks of the legislative session, which concludes April 9.

The governor and top lawmakers will be leaning heavily on core Democratic strongholds of Howard, Montgomery and Prince George’s counties and Baltimore City to support a transportation revenue package.

Those jurisdictions hold the Democratic votes needed to pass legislation in both chambers — 24 senators and 71 delegates — but leaders of those delegations were not ready Wednesday to lend their muscle to the governor’s proposal before seeing how the money would be spent.

“If we’re going to be paying this tax, we need to see a full package, and see how this will improve our quality of life through improved transportation,” said Democrat Guy J. Guzzone, who heads the Howard County delegation in the House of Delegates.

Democrat Douglas J.J. Peters, chair of the Prince George’s County delegation in the state Senate, said he wants to see money set aside for at least the top five projects in his county, including improvements to Route 1 and Indian Head Highway.

“That list would need to be funded for me to even think about voting for it,” Peters said. “Those are things that we as a county can deliver to our constituents.”

Sen. Jamin B. “Jamie” Raskin, D-Montgomery, said he had not yet polled his delegation on the issue, but said they would be open to discussing the governor’s proposal.

“We want to make sure our essential transportation priorities are part of the arrangement,” the Democrat said.

Leaders of Baltimore delegations in the House and Senate said the regressive nature of the tax gives them pause.

Baltimore City’s Senate delegation has not taken a formal position, said Democrat Verna Jones-Rodwell, but there are “some individuals who support and some who don’t.”

A study released Wednesday by the Maryland Public Policy Institute found that the governor’s proposal would take a bite out of the income of the state’s lowest earner seven times greater than that of the highest earners.

Baltimore’s median income was $38,000 in 2010, compared to $70,000 in Prince George’s, $89,000 in Montgomery and $101,000 in Howard.

“I’m not feeling the gas tax,” said Curtis S. Anderson, leader of the Baltimore City delegates. “It comes at a time, and there many never be a good time, when most Marylanders are feeling the pinch of lost jobs and inflated prices of other goods.

“I think a lot of us have heard from our constituents that they don’t want new taxes.”

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