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Trying to win on tax issue

Baltimore Mayor Martin O'Malley didn't wait long to start a public relations campaign to influence how Marylanders view his decision to raise taxes.

Even before the City Council passed $30 million in new taxes last week - two-thirds of what he had originally proposed - O'Malley stood at a podium with a couple of props and a plan to paint Gov. Robert L. Ehrlich Jr. as Maryland's real tax-and-spender.

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O'Malley and his supporters recognize that Maryland Republicans stand ready to keep the image of a tax-happy mayor alive until 2006. That's when O'Malley is widely expected to challenge Ehrlich, who has cast himself as a no-new-taxes conservative even as he has raised a range of state fees.

"You have two schools of thought - one is frivolous tax and spend, and the other is sound management and accountability," said Deborah Martinez, spokeswoman for the Maryland Republican Party. "It just seems like there's crisis after crisis coming out of Baltimore City, and each time he [O'Malley] wants to blame someone else for his faults."

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But Democrats think taxes can be a winning issue for O'Malley and the governor's other potential Democratic rivals - including Montgomery County Executive Douglas M. Duncan - if they can make the case that the state is taxing more and giving localities less.

The props O'Malley never got to show off at the podium last week were two pieces of paper. Written on one was $16.50, the average amount that he said residents will pay each month in new state taxes and fees. On the other, $6.75, the amount they'll pay in new city levies.

"Governor Ehrlich raised more taxes in 16 months than two Democratic governors did in 16 years," said Steve Kearney, a spokesman for O'Malley. "People are smart. They know that fees are just taxes that don't go to education. And after a few years of being nickeled and dimed, I don't think anyone is going to see Governor Ehrlich as a tax savior - except maybe big corporations."

Democratic primary

Taxes are not expected to be an issue in a potential Democratic primary between O'Malley and Duncan, political observers say. Montgomery County has recently imposed or increased some of the same levies included in O'Malley's revenue package - on cell phones and energy - albeit over Duncan's objections in some cases.

In his nearly 10 years in office, Duncan has cut some taxes and raised others, said spokesman David S. Weaver. Duncan increased the county's income tax two years ago but more recently vetoed a County Council bill that would have raised the tax on greens fees, movie tickets and other amusements from 7 percent to 10 percent.

"I don't see taxes as being a big issue in a Democratic primary," said Steve Silverman, president of the Montgomery County Council and a Duncan supporter. "I think it will be a big issue with whoever the Democratic nominee is against Bob Ehrlich. But Ehrlich's the guy who's drawn the line in the sand with income and sales taxes but has no problem [with] fees. He's going to try to draw that distinction whether it's against O'Malley [or] against Duncan."

In the budget package passed last week, Baltimore doubled taxes on real estate sales, imposed a flat $3.50 fee on cell phones and land lines, and assessed a 2 percent energy tax on residents and manufacturers. Nonprofit organizations will pay a 6 percent tax on energy starting in July next year.

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In Annapolis, Ehrlich backed increases in numerous fees, including a $2.50-a-month sewer bill surcharge that critics call a "flush tax." He also raised car registration fees starting July 1, with most car owners paying an additional $23.50 a year.

State money

O'Malley has tried to make the case that the city taxes were forced upon him by cuts in state and federal funding. The federal grants to Baltimore's operating budget fell by nearly $13 million in the budget year that begins July 1. But the state side of the equation is open to interpretation.

Ehrlich and his supporters note that state aid to the city went up for the coming fiscal year. Baltimore will receive nearly $960 million, up about $61 million, or 6.8 percent.

"Baltimore City receives more state aid than any other city in Maryland," Martinez said. "The question is, 'Where's the money going?'"

O'Malley and his backers say those figures are deceptive because $49 million of the new aid is dedicated to schools as part of a reform plan known as Thornton. Motor vehicle funds rose by $18 million, but aid for other areas of City Hall shrank. Baltimore will receive $2.2 million less for parks, for example.

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"All localities around Maryland are being hit by the fact that the governor abandoned his pledge not to cut local funding," said Josh White, executive director of the Maryland Democratic Party. "He's pushing the tough decisions onto our local leaders."

Lenneal J. Henderson, professor at the University of Baltimore's School of Public Affairs, thinks that argument could work with voters.

"Quite frankly, it's courageous of the mayor to say, 'All right, folks. Raising taxes is never popular, but the truth is that's what we have to do in a situation where the state's not there for us,'" Henderson said. "He's telling the voters the truth on the fiscal situation. He's not trying to do a Botox job on us and trying to make it look pretty."

But Ehrlich's supporters say that argument won't fly.

"It's a lot easier to cast blame than to take responsibility," said Shareese N. DeLeaver, an Ehrlich spokeswoman. "Governor Ehrlich was faced with a $2 billion deficit, and he was faced with tough choices. And it's no different for jurisdictional leaders."

Even as Ehrlich and his challengers make much of taxes and fees, it's not clear that voters will care, said Donald F. Norris, a public policy professor at the University of Maryland, Baltimore County.

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Just 6 percent of Maryland voters believe taxes are the most important issue facing the state, according to a poll conducted early this month by Gonzales Research & Marketing Strategies of Annapolis. The number was 3 percent among Democrats, 13 percent for Republicans.

Silverman, the Montgomery County Council president, said he does not believe the next governor's race will be won or lost over taxes.

Voters care about "the record of accomplishment and not about whether somebody increased taxes or not," he said. "What did you spend it on?"


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