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Tough decisions loom in Annapolis

Annapolis is awash in good feelings as the General Assembly prepares to convene this week, with lawmakers saying they are eager for a respite from the intense partisanship that has dominated the state Capitol recently.

But it's easy to envision the honeymoon ending soon.

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Despite the losses by Republicans and the inauguration next week of a Democratic governor, the potential for fierce debate remains as the state grapples over the next four years with billion-dollar budget shortfalls and growing pressure to expand health care access. Decisions on social issues such as the death penalty and gay marriage could determine whether Maryland sheds its conservative Democratic past and fully joins the ranks of the nation's most liberal states.

New legislators and new governors typically take some time to feel their way, and many expect this year will be no different.

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Nearly a quarter of the seats in each chamber of the General Assembly turned over after last year's election, and the newcomers need time to find their offices, much less affect legislation.

Gov.-elect Martin O'Malley has yet to take positions on several of the issues that could spark the most contention, such as a smoking ban in bars and restaurants. But at the same time, he has worked with some success to build a reservoir of goodwill after the tumult of Republican Gov. Robert L. Ehrlich Jr.'s term.

Ehrlich was unable to get many of his priorities through the legislature and saw dozens of his vetoes overridden in the past two years - moves he took as a personal insult. O'Malley has huddled with top legislators and county government leaders since winning election, assuring them that they will be partners in his administration. He has even made courtesy calls to GOP leaders, impressing those such as House Minority Leader Anthony J. O'Donnell of Southern Maryland.

"Governor O'Malley has come into office, and he's got a lot of political capital," Senate President Thomas V. Mike Miller said. "There's a sense of euphoria, even among Republicans, that there's this lack of tension. There's a sense that we can get things done."

Even so, the traditional inclination of lawmakers to put off major issues until the second year of a term appears stronger than usual because of a growing consensus among the Democrats who lead the General Assembly that Maryland should conduct a major overhaul of its tax structure.

No major tax changes have been enacted since the 1960s, and several key lawmakers say they want the system to better reflect the current economy, and generate more revenue for education, health care, transportation and other government programs.

Miller and House Speaker Michael E. Busch have said they support a tax overhaul. Miller has said he thinks changes could be made this year, but most leaders expect the creation of a study commission with an attempt at changes in 2008.

O'Malley has pledged not to seek revenue increases this year but has said he wants a comprehensive solution to a state fiscal structure that has oscillated between boom and bust for years.

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A restructuring would involve raising some taxes and cutting others, but the net result would almost certainly be that the state collects more from its residents. One often-discussed idea involves expanding the list of services to which the sales tax is applied, a nod to the state's shift away from a manufacturing-based economy.

The tax reform idea has even gained some currency among traditional tax foes.

"The economy has changed. We recognize it," said Maryland Chamber of Commerce President Kathleen T. Snyder. "We would like to see such a study group comprised of tax experts, economists ... not just people saying, 'Oh, we've got a $1 billion hole, here's $1 billion in taxes we can raise.'"

O'Malley made a number of potentially expensive promises during the campaign, and he has pointed to looming shortfalls and the need to close them to tamp down expectations for how quickly those pledges will be fulfilled.

This week, for example, he said he still intends to fund a program to give more aid to jurisdictions where the costs of education are greater but said it likely won't happen this year.

"How soon we'll be able to do that is still an open question," he said.

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Liberal advocacy groups and business groups alike are pushing this year for a major expansion of health insurance coverage, but that issue, too, could become subsumed by tax reform.

A large coalition is pushing for a $1-a-pack increase in the cigarette tax to fund the expansion of Medicaid, drug treatment and other health programs. Nearly half of the legislature - including a number of influential lawmakers - is backing the proposal, which also got the endorsement this week of the Greater Baltimore Committee, a business group.

The Chamber of Commerce opposes the cigarette tax increase, but it is endorsing a plan to require high-income people to purchase health insurance, a cause that liberal groups also back. O'Malley has pledged to help small businesses band together to buy health insurance for their employees, another Chamber priority, and some key legislators are looking to Massachusetts, which enacted near-universal health care last year, for ideas.

"2007 is clearly going to be the year of health care," said Vincent DeMarco, president of the Maryland Citizens Health Initiative, which is pushing the tobacco tax.

But again, it may well take much more than this year's 90-day legislative session to do the job. Busch said his goal is to cut the number of uninsured Marylanders in half by the end of the four-year term, but he said he expects only incremental steps this year. Many of the major pieces to health care reform will require new revenues, and that will likely have to wait for a tax reform package, he said.

Even slot machine gambling, a perennial issue in Annapolis, may become attached to a tax package in the second General Assembly session of the term. O'Malley's chief policy adviser, Joseph Bryce, said last week that slots need to be considered in a broader context. Busch, who has been the biggest obstacle to slots for the past four years, said much the same thing.

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"If you're going to try to balance the structural budget on a long-term basis, you need to come up with a stable revenue source as well," he said.

Some issues that come without a major price tag for the state could become a big part of this session. Environmentalists say they will push for new pollution restrictions on cars and stricter standards to prevent pollution from entering the Chesapeake Bay. Republican leaders say they will push for tougher sentences for sex offenders and protections against government seizure of property.

But the issues that could turn the spirit of cooperation into a philosophical battle are those that would determine whether Maryland swings further left of center. This session could see fights over whether the state should abolish the death penalty, allow gay marriage, and ban smoking in bars and restaurants.

Although Maryland has been run by Democrats more or less continuously for decades, moderates and conservatives have long held sway, keeping the state from the liberal forefront on some social and fiscal issues.

But in the last election, the legislature got an influx of forceful, articulate liberal members, mainly from the Washington suburbs. The Senate, in particular, could feel the effects as conservatives who were key swing votes on issues such as gun control were replaced by liberals.

Blair Lee IV, a developer and conservative political columnist from Montgomery County, said the center has collapsed in Maryland politics in recent years. The political left has grown as a result, but the right largely has not, he said.

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"Four years from now it's going to be a much different state," Lee said. "We're clearly going to be more regulated. We're going to have higher taxes. We could be a single-payer health care state. We may be a no death penalty state. We might be a gay marriage state. We might be a California car emissions state. ... The next Massachusetts? Yeah, looks like it. What's to stop it?"

Republicans, although they are outnumbered 2-1 in both chambers, say they'll try. With the loss of the governor's mansion, the GOP has been working to retrench and figure out an approach to maintain its relevance in Annapolis. The new leaders the party has selected say they want to stand on principle and hope to attract the remaining conservative Democrats.

"I'd offer a word of caution to not misinterpret what was a nationalized election as a mandate for an extreme left-wing lurch," said O'Donnell, the new House minority leader.

What will ultimately set the course, said Sen. Paul G. Pinsky, a Prince George's County Democrat, is the agenda O'Malley pushes. "You have a number of liberals and progressives and moderates, but I think it's at the tipping point," Pinsky said. "The power of the governor and his agenda can push something over the top and give it the momentum it needs to get life."

Where O'Malley stands on some of these issues is known - he opposes the death penalty and has not lent support to gay marriage, for example - but for the moment, he's talking much more about his eagerness to compromise than about where he will spend his political capital.

His agenda remains vague, and until he spells it out, much of the character of this session and the three that will follow it will remain impossible to know.

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"That'll all come," O'Malley said. "Over the course of the campaign, we were really clear in laying out a comprehensive and ambitious agenda. Now is the process of governing and figuring out how quickly and how much progress we can make over the next four years."

andy.green@baltsun.com

Other key legislative issues

Budget/taxes The scheduling quirks of Maryland's Constitution give Gov.-elect Martin O'Malley a scant two days after he is inaugurated Jan. 17 before he must submit a budget for fiscal 2008, which starts in July. He has a relatively modest gap to fill through spending cuts or new revenues for 2008, but after that, analysts expect shortfalls of $1 billion or more a year. O'Malley has offered few hints on how he intends to deal with the problem, but Democratic leaders in the General Assembly say they want a comprehensive overhaul of the state's tax structure, maybe this year.

Death penalty A recent Court of Appeals decision put Maryland's death penalty on hold unless the legislature adopts regulations for how lethal injections are carried out. With the election of several more liberals to the state Senate, it could be difficult for such a measure to overcome a filibuster. O'Malley personally opposes the death penalty.

Environment Senate President Thomas V. Mike Miller pledged last week that his chamber would pass a bill allowing Maryland to join 11 other states in requiring tailpipe emissions standards for cars that are stricter than the levels established by the federal government. The initiative would regulate carbon dioxide emissions, which are not part of the federal standards, and would require a minimum percentage of cars sold in the state to use advanced emissions control technology, a standard that would encourage the sale of hybrids. Environmentalists are also pushing for more funding to preserve open space, and tougher regulations on storm-water runoff flowing into the Chesapeake Bay.

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Gay marriage The Court of Appeals is considering whether to uphold a Circuit Court ruling that paved the way for gay marriage. If it does, social conservatives in the House and Senate are poised to push for a constitutional amendment to ban the unions, but it could be difficult for them to achieve the required three-fifths majorities needed in both chambers to put such a measure on the ballot. This is an issue that a lot of Democrats wish would just go away.

Ground rent Legislative leaders say they want to phase out the state's ground-rent system - arcane laws that in Baltimore have led to residents losing their homes for unpaid bills of a few hundred dollars. Lawmakers and the incoming administration say they will make reform a priority, prompted by a series of articles in The Sun that documented abuses. Ideas include eliminating the system and a prohibition on the seizure of homes.

Growth/housing The good news is that Maryland was a big winner in a national military base realignment and will get tens of thousands of high-paying jobs in the next few years. The bad news is that all those people will need someplace to live, and that could be a tough challenge, as residents of many communities are tired of growth and many jurisdictions are finding their available land dwindling.

Slot machines Prospects look dicey for the state to act on an issue that tied Annapolis in knots for the past four years. O'Malley is lukewarm about legalizing slot machines, saying that he would support them to help the horse racing industry but that he is unlikely to press the issue. Miller, the biggest slots backer in the Assembly, still wants them but has said he will wait for the governor to take the initiative. Meanwhile, House Speaker Michael E. Busch, his position solidified by re-election, remains steadfastly opposed. That said, somebody is bound to introduce a slots bill, and many expect a push to package legalized gambling with a tax reform package sometime in the next four years.

Smoking A large coalition - with the pledged support of nearly half the legislature - is pushing to raise the tobacco tax by $1 a pack on cigarettes to pay for expanding Medicaid eligibility. Additionally, momentum is building for a statewide smoking ban in bars and restaurants. Baltimore is considering a local restriction (Howard, Montgomery and other counties have a ban), which, if passed, could be the tipping point for a measure that has failed for several years.

Transportation The gridlock-bound Washington suburbs flexed their electoral muscle this year, and some leaders in the region are pushing for a gas tax increase to pay for more roads and mass transit. A lot of the state's debt capacity is being used up by the funding for the Inter-County Connector, and O'Malley may find himself in need of new revenues (such as a gas tax increase) to pay for the roads and rails he wants.

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Key Dates

Wednesday:

Assembly opens.

Jan. 17:

Gov.-elect Martin O'Malley inaugurated.

Jan. 19:

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Deadline for governor to submit state budget bill.

Feb. 16:

"Green Bag," containing appointments to boards made by governor, submitted to legislature.

March 5:

Final day for submitting legislation without suspension of rules.

March 26:

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Crossover Day, deadline for each chamber passing bills it intends to send to opposite chamber.

April 2:

Deadline for both chambers' passage of budget bill.

April 9:

Adjournment "sine die."


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