A group of liberal state senators wants the state to consider ideas beyond sales tax increases or slot machine gambling to solve its budget problems -- and they think they have the votes to make their voices heard.
More than a dozen Democrats in the Senate plan to deliver a letter to Gov. Martin O'Malley next week outlining principles they think should guide the debate over how to close Maryland's projected $1.5 billion deficit for the next fiscal year. New revenues should not fall disproportionately on the poor and working class, they say, and the solution should not just fill the budget hole but put Maryland on the path toward a cleaner environment, better schools and safer streets.
The group is not endorsing specific taxes, nor is it precluding anything, including slot machine gambling. But members say they want the debate to be as expansive as possible.
"There are easy fixes, I suppose, but they don't help the state in the long run," said Sen. Brian E. Frosh, a Montgomery County Democrat and one of the leaders of the effort. "We would like to make the system fairer and would also like to give folks incentives to do things that would be helpful as opposed to doing the kind of things that actually are bad for society, bad for the environment, bad for our communities."
The group -- largely but not exclusively politicians from the Washington suburbs -- are well shy of a majority in the 47-seat Senate. But the coalition is big enough that they may be able to steer the debate.
And they have, at least, gotten Democratic Gov. Martin O'Malley's attention.
"The point they made, which was a good one, was that this is not about solving the deficit in and of itself," said O'Malley, who met with several of the senators this week. "This is about bigger and better things, improving public safety, public education, making sure small business is able to keep employees by providing health care."
The group doesn't have a specific plan, but members are considering ideas such as "combined reporting," a change to business tax law that prevents large corporations from using out-of-state subsidiaries to avoid taxes and an idea that has failed in Annapolis before; taxes on inefficient cars or appliances; and a more progressive income tax, rather than the relatively flat structure Maryland has now.
"A large percentage, some say half, of the large corporations don't pay any taxes because of the loopholes, but the working people, they don't have six attorneys and 12 accountants to help them avoid paying taxes," said Sen. Paul G. Pinsky, a Prince George's Democrat.
The budget shortfall, expected to hit next summer, is largely the product of a 10 percent income tax cut in 1998 and the state's decision five years later to enact an education funding system known as the Thornton formula without enacting a new revenue source to go with it. The two factors together now cost the state more than $2 billion a year.
Senators involved in the effort say they want to make sure that the fiscal solution does more than make up for those two decisions and instead addresses other pressing needs in the state, such as reducing the number of Marylanders without health insurance.
"We were elected to improve health care and take care of the environment and invest in schools and teachers," said Sen. Jamie Raskin, a Montgomery County Democrat. "The deficit is an abstraction. It's something that politicians have to deal with, but I'm emphatic that we have to keep our eyes on the prize. We need to keep making social progress even as we balance the books."
How receptive the rest of the Senate will be remains to be seen. Republicans in that chamber crafted a plan during the spring legislative session for balancing the budget without tax increases. Instead, they relied on revenue from slot machine gambling and savings from hundreds of millions of dollars in cuts to government programs, including K-12 education, higher education and health care.
No Democrats supported that plan. But many conservative Democratic senators, primarily from the Baltimore suburbs, are reluctant to support tax increases at all and certainly not without first taking advantage of the potential revenue from legalizing slot machines. The coalition of liberal senators is not taking a position on slots.
Senate President Thomas V. Mike Miller, a Southern Maryland Democrat who is in the no-taxes-without-slots camp, said he has met with members of the group and with their allies, such as Progressive Maryland. Miller said their ideas that government is a force of good and that its programs should be protected are laudable, but he said they don't seem to have a plan that could address a problem so large as the one Maryland faces.
"We've got a $1.5 billion problem here, and it's going to be very difficult to get everybody pulling oars together," Miller said. "This is going to take hard work, and there's got to be a willingness to look at the entire state of Maryland, not inner-[Washington] Beltway politics, but the Eastern Shore, Southern Maryland, the needs of metropolitan Baltimore and suburban Maryland."
But members of the coalition say the fact that Maryland is again in a budget crisis is proof that applying old solutions to the state's problems is a recipe for failure. They say the state budget has been bouncing between boom and bust for years and that new ideas are needed to break the cycle.
"Every time we have faced a fiscal crisis since the late 1970s, we have done the same things," said Sen. Richard S. Madaleno Jr., a Montgomery County Democrat. "There are a few of us saying that's not adequate because it perpetuates this cycle that we've been in, and it's not fair to the citizens, it's not good for our economy and it's not good for the state government."
andy.green@baltsun.com