On tax reform, O'Malley can learn a lot from Virginia

Gov. Martin O'Malley is planning to resume his fight for comprehensive tax reform during next year's regular legislative session. He is wise to do so.

The business of fixing Maryland's structural deficit is unfinished. The projected budget shortfall is expected to exceed $1 billion for fiscal year 2013.

To ensure that this new possible bid for tax reform fares better than his previous attempt in 2007, Mr. O'Malley should prepare a new strategy now. He should begin by studying the approach that Mark R. Warner took in 2004 to master Virginia's budget problems.

As a neighbor of similar population and wealth, Virginia has always been a political laboratory for Maryland policymakers to observe with interest. Today, the most visible mark of Virginia's political influence on Maryland is probably Mr. O'Malley's "One Maryland" slogan, a mirror image of Mr. Warner's "One Virginia" message.

But the substance — not just the symbolism — of the Warner legacy is worth emulating.

Mr. Warner, a moderate Democrat now serving in the U.S. Senate, was Virginia's chief executive from 2001 to 2005. (Virginia governors are only permitted to serve one term.) The keynote of the Warner administration was set in spring 2004, when Virginia was under pressure from the three major national credit rating agencies to fix its budget gap or risk losing its coveted AAA bond rating. A political standoff between a House controlled by conservative Republicans and a Senate led by moderate Republicans aggravated budget woes.

Mr. Warner exploited the opportunity for comprehensive tax reform, proposing a mix of spending cuts, tax cuts and tax hikes that would rectify the structural deficit, provide record investments for education and support other core state services. The Virginia General Assembly approved $1.4 billion in new taxes in 2004.

Three elements of the 2004 Warner tax plan were essential to his success and are replicable by other governors:

•First, Mr. Warner worked with the business community behind the scenes to win key endorsements before he sold his plan publicly. Ultimately, the Virginia Chamber of Commerce endorsed the plan because of its large investment in K-12 education and the governor's practiced insistence that he was acting to save the state's AAA bond rating. Virginia AARP endorsed the plan despite its cancellation of a tax break for seniors — thanks to Mr. Warner's early lobbying.

•Second, Mr. Warner worked with humility, patience and determination to persuade Republicans to support his plan. He pressured wayward Democrats but reserved the bulk of his time for lobbying the Republican caucus, which constituted the vast majority of the General Assembly.

The governor would call some key legislators multiple times a day to ensure their support. He played basketball with lawmakers at Medical College of Virginia. He dined with legislators in small groups of three or four, especially at Helen's, a favorite local restaurant.

L. Preston Bryant Jr., a former Republican state legislator during the Warner administration, recalled Mr. Warner's successful lobbying style. "It was a soft sell over multiple dinners," said Mr. Bryant. "It wasn't uncommon for a several-hour dinner to be dominated by talk of kids, sports, gossip and other things, with budget politics coming later in the evening."

•Finally, though his plan depended on tax hikes to fund new investments, Mr. Warner carefully crafted a popular message that focused on "tax fairness." He delivered this message to the public via a marathon road tour.

The Warner tax plan was designed so that, overall, 65 percent of Virginians paid less in taxes. The day Mr. Warner rolled out his plan, the only picture his staff provided for reporters depicted the governor walking to a flip chart and writing "65% Pay Less" in massive lettering.

Mr. Warner liked to travel to parts of Virginia where he polled the worst. During his three-month road tour across the state, he gave a slide show on the structural deficit more than 60 times. He shook every hand at every diner, Rotary Club and chamber of commerce visited.

Were Mr. O'Malley to try such an approach, he would face many more anti-tax Democrats and far fewer anti-tax Republicans than Mr. Warner did. But the Warner legacy is still instructive on how to craft what Mr. O'Malley calls "precious consensus."

Mr. O'Malley prides himself on the success of StateStat, the performance-based government system he began in Baltimore as CitiStat and then expanded statewide. The original CitiStat model has been adopted across the country and overseas.

But Maryland can learn from other jurisdictions, too.

John Coggin, a freelance writer from Annapolis, worked on the 2006 O'Malley for Governor campaign as a field staffer. His email is johndpcoggin@gmail.com.

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