Session set for hectic ending

One week ago it appeared that Gov. Martin O'Malley's second legislative session would conclude with few victories and plenty of unresolved problems.

The Democratic governor was mired in a fight with the state's largest utility over high electricity rates that have dogged him since his inauguration, and computer companies were threatening to leave the state over a new tax he signed into law late last year. His poll numbers were down, and he faced opposition from his own party on several of his legislative initiatives.


But in 24 hours, the logjam of bad news broke. In that time, O'Malley struck a rate- relief settlement with BGE's parent company, Constellation Energy Group, that includes a one-time $170 rebate to each customer. And he floated a proposal to repeal the unpopular computer services tax that is likely to dominate debate in the final week before the General Assembly adjourns for the year.

Finalizing the computer tax repeal and the BGE settlement - both of which must be done through legislation - would give O'Malley political victories after a cantankerous special session in November that raised taxes by $1.3 billion to help balance the state's budget.


"O'Malley could feel good about repealing the computer tax that was universally disliked, especially in business circles," said Michael Cain, chairman of the political science department at St. Mary's College. "And now he's going to be able to talk about the BGE settlement all summer when those checks start coming in, and he can say how tough he was on the energy industry."

Cain added: "He needs to talk about other things besides tax revenues going down and having to make more budget cuts."

O'Malley has characterized the Constellation deal as one of the biggest settlements of its kind. Administration officials also point out that the governor didn't put forward the computer tax during the special session but wanted to raise the income tax on higher earners to make the system more progressive, which he is again proposing to pay for part of the tech tax repeal.

But it remains to be seen how the actions will play out with voters. Some Republicans say that the BGE settlement falls short of what O'Malley could have secured and that his proposed tax on millionaires is political folly.

"The settlement is cents on the dollar in terms of what ratepayers had on the table," said Sen. E.J. Pipkin, an Eastern Shore Republican. "And one of the last acts that the governor is going to support this year is an increase in income taxes. I don't see how you gain ground with that."

O'Malley came into this year's legislative session with modest goals. But the governor's position quickly became difficult.

An economic downturn forced lawmakers to shave hundreds of millions of dollars more than anticipated from the budget - and to slash funding for O'Malley's initiatives from the special session, including an expansion of health coverage to the uninsured and a Chesapeake Bay cleanup fund.

Meanwhile, computer companies launched an all-out lobbying effort. Among others, they had assistance from a firm headed by the governor's former communications chief. O'Malley called for a repeal this month.


"Here we are a week to go, and it's like Groundhog Day," said Del. Christopher B. Shank, a Western Maryland Republican and the House minority whip. "It just reflects how opportunistic this governor is. He's just going from issue to issue to try to figure out how he can rescue his political career."

O'Malley also ran into opposition to his proposal to allow police to collect DNA samples from criminal suspects, with the Legislative Black Caucus threatening to withhold votes over concerns that an expanded database of genetic markers would be used by authorities to target minorities. And some lawmakers balked at the greenhouse gas reduction plan O'Malley endorsed, insisting on a provision that weakened the bill.

Those bills have passed in one or both chambers. And lawmakers have approved a number of O'Malley's proposals intended to increase oversight of the mortgage industry and protect homeowners facing foreclosure. Other administration measures to boost renewable energy and conservation and to bolster enforcement of shoreline development restrictions are also moving through the legislature, though their fates are not yet certain.

"He tried to present a moderate, forward-looking agenda to address the immediate foreclosure problem and longer-term policies surrounding energy, environment and public safety," said Joseph C. Bryce, O'Malley's chief legislative aide. "Those things are unfolding the way we expected."

But O'Malley's success or failure this year will probably be judged on whether he can line up votes for the BGE settlement and the computer services tax repeal.

Senate President Thomas V. Mike Miller, a Prince George's County Democrat, indicated late last week that there's not enough support in the Budget and Taxation Committee for O'Malley's plan to pay for a repeal through the millionaire tax and spending cuts to transportation and other programs. Miller raised the possibility of dropping the higher income tax and making up the lost revenue entirely through spending cuts, though that would be a tough sell as well.


"The problem is getting Democrats to agree is like herding cats to a common goal," Miller said.

Legislative leaders predicted that the bill to implement the BGE settlement would move quickly. While some lawmakers might try to amend the bill, most probably would be loath to take steps that could jeopardize the hard-fought deal.

"I'm sure we'll have a piece of legislation that puts this in place," said Thomas "Mac" Middleton, a Charles County Democrat and chairman of the Finance Committee.

While legislative sessions often come down to the wire, the coming days promise to be among the more hectic. Only a few dozen bills have been approved so far, after weeks of Miller and House Speaker Michael E. Busch of Anne Arundel urging their respective chambers to get their work done.

"No matter how much it snows, a lot of snow always seems to accumulate in front of the plow," said Lt. Gov. Anthony G. Brown. "As we near the end of session, difficult decisions are being made on big issues."