ANNAPOLIS -- Maryland Gov. Martin O'Malley said Wednesday he would like to raise the state's sales tax by a penny, putting another revenue source on the table in a new General Assembly session expected to produce extensively higher taxes for Marylanders.
"I'm saying it's another idea," he told reporters after welcoming the state Senate back into session. "These bridges don't build themselves. One penny on a sales tax is a pretty big yield."
| Issues to watch |
| The 2012 Maryland General Assembly is expected to broach a variety of hot-button issues, as lawmakers seek to plug a more than billion-dollar-budget gap while wading into divisive cultural issues. |
| • Gay marriage will represent the defining issue of the legislative session. After same-sex matrimony passed just one chamber last year, Gov. Martin O'Malley is putting his political clout behind the measure. |
| • O'Malley will press lawmakers to approve a massive expansion in off-shore wind power, which died last year after lawmakers balked at passing the costs on to electricity ratepayers. |
| • Taxes, taxes, taxes. O'Malley will propose raising the state's 23.5 cents-per-gallon gasoline tax and likely will push a steeper "flush tax" to help pay for improvements to the Chesapeake Bay. |
| • Senate President Thomas V. Mike Miller Jr., among others, would like to bring another gambling location to Maryland. Industry supporters will attempt to implement table games at the current five sites and bring a new casino to Prince George's County. |
Though the governor's office said they weren't pushing the idea, O'Malley somewhat shocked the political establishment here when he floated a 7-cent sales tax in an interview with a Baltimore radio station Wednesday morning.
In fact, Senate President Thomas V. Mike Miller Jr., D-Prince George's County, dismissed the concept as a "non-starter."
The call for a higher sales tax comes as O'Malley is expected to push lawmakers to raise Maryland's 23.5-cents-per-gallon gasoline tax and could propose a tripling of the state's $30-a-year "flush tax" in his budget to be released soon.
Millionaires and corporations also face higher taxes, and Internet sales and tobacco products might get pricier as state officials look to close a $1.1 billion shortfall.
In a 2007 special session -- at the urging of O'Malley -- lawmakers raised the sales tax from 5 to 6 percent. State analysts say an additional penny in sales tax revenue would pump more than $600 million into Maryland coffers.
O'Malley is pushing for hundreds of millions of dollars more in school construction and transportation funding. However, in the two previous fiscal years, O'Malley took roughly $700 million from the transportation trust fund to help plug general fund deficits.
"I wasn't surprised at all," said Kimberly Burns, president of the Maryland Business for Responsive Government, of O'Malley's sales-tax suggestion. "Increasing taxes has become a recurring theme of his administration. They haven't cut spending enough -- it's unacceptable."
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Lawmakers are exploring options beyond higher taxes in hoping to improve a fiscal forecast awash in red ink.
Just moments before the General Assembly was called into session, Miller suggested that localities take on a greater burden in paying for teacher pension costs. The state picks up most of the tab, which makes up a large share of its massive deficit.
But that blueprint was met with skepticism from O'Malley and Washington-area leaders.
"I've resisted that in the past," O'Malley said. "I still think it would be irresponsible without a revenue stream to support it."
Prince George's County Executive Rushern Baker told The Washington Examiner, "It would be devastating. I've got a $126 million deficit and don't have the money to pay for that. We would need another source of revenue to cover it."
