Commentary - Robert Ehrlich: O’Malley tax increase bilks taxpayers, ignores history

Less than nine months after restoring one-party rule, the liberals in Annapolis are pushing massive tax increases based on a revisionist account of Maryland’s budget history. Let me set the record straight.

In 2002, as state revenues steadily dwindled, the General Assembly enacted a $1.3 billion education law. Legislators passed it knowing they had no money to pay for it. They also passed a budget that overspent by $616 million.

This massive new spending, combined with an economic downturn and rising health care costs, created a long-term deficit. My administration inherited that deficit in 2003 and, four years later, left state government with a budget surplus.

We cut government spending by more than $700 million in our first six months. We cut the size of the executive branch work force by 7 percent. We defeated $7.5 billion in proposed new taxes.

We directed state agencies to budget under the assumption they would receive 12 percent less money than the previous year. These decisions were wildly unpopular with the lawmakers who created the budget crisis, but I took these steps to end their “cocktail party” spending in Annapolis.

We also proposed to place slot machines at Maryland racetracks. Had the leaders of the Maryland House of Delegates not rejected this bipartisan proposal for four straight years, Maryland would be enjoying an estimated $800 million in additional non-tax revenue each year.

Despite inheriting a raft of new spending programs, my administration left Maryland in strong fiscal health. We nearly tripled the rainy day fund to $1.4 billion and at the end of fiscal 2006, Maryland enjoyed a $1 billion budget surplus and remarkably low unemployment.

As recently as December of 2006, general fund revenues were up despite high gas prices and a slowdown in the housing market. We also preserved Maryland’s Triple A bond rating, which saves residents money by allowing the state to borrow at low rates.

Government was leaner and more effective than it was when we inherited it, which is why I am so troubled by the O’Malley administration’s plans to enact historic new tax increases.

Maryland’s hard-left leaders plan to increase the sales tax by 20 percent; expand the sales tax to new services including automotive repairs, real estate services, and health clubs; increase the income tax burden; increase and index the gas tax; increase motor vehicle fees; create a tax to be paid by new homeowners; and increase the tobacco tax.

Here’s what leaders in Maryland don’t get: We don't have a revenue problem; we have a spending problem. With creativity and slower budget growth, legislators can align Maryland’s spending with its needs without raising taxes.

Yet they inherently believe that low taxes are a problem that must be “fixed” in order to expand government's reach into our wallets and our lives.

Nowhere is that more evident than the bloated salaries doled out to political appointees. The new administration approved a whopping 58 percent pay raise for the head of the Public Service Commission, who then forced a 50 percent increase in electricity costs on one million state residents.

The new comptroller gave three of his aides salary increases to $150,000 each — on par with Cabinet secretaries with infinitely greater responsibilities.

These raises may be small in the context of a $30 billion budget, but they speak volumes about Annapolis's lack of respect for Marylanders’ money. So, as our government leaders rush to Annapolis this week to raise our taxes, ask yourself: Have they made a real attempt to tighten government's belt?

Or are they simply playing that old Annapolis routine of “scare ‘em, tax, and spend?” The stakes in Annapolis are high. This is our state. Call your legislator today. Let your voice be heard. To find out how to contact your legislator, go to http://mlis.state.md.us/.

Former Gov. Robert Ehrlich, a Republican, was Maryland’s chief executive from 2003 to 2007.