When Republican Larry Hogan was elected governor this month, his platform was narrow and clear: Roll back as many of the tax increases of the last eight years as possible. When he made that promise, he knew he faced a $405 million shortfall in this year's budget and next year's as soon as he walked in the door. Now, though, things look worse — the Department of Legislative Services revealed last week that Maryland's expected shortfall is actually about $900 million over that time frame. So much for Mr. Hogan's promises, right?
Wrong. The governor-elect's rhetoric about "40 straight tax increases" from the O'Malley administration may have given voters the impression that he was coming in to slash and burn the state budget, but a closer examination of what he actually said reveals nothing of the sort. Mr. Hogan advanced by far the most responsible and prudent approach to the budget and taxes of any of the candidates in the Republican primary, and he made it through the general election without a lot of specific promises that might foreclose his options as governor.
During an interview with The Sun's editorial board before the election, Mr. Hogan spoke extensively about his plans for spending and tax cuts, and with more specificity than he typically did during debates and stump speeches. He reiterated his view that spending cuts must come before tax cuts — this would seem obvious, but apparently it isn't among conservative ideologues like those who have driven Kansas' economy into the ditch during the last few years. And he insisted that he would approach cutting the budget "in a deliberate way." He said he doesn't think that there are departments or major programs that should be eliminated, and he rejected the idea of across-the-board spending cuts. The first order of business, he said, was to conduct independent, outside audits in "a reasonable, cautious approach." He said he did not want to "make wild promises, but I want to run government more efficiently so we have money to bring tax relief and can free up taxpayer funds for top priorities."
As for taxes, the big hike that came under Gov. Martin O'Malley was an increase in the sales tax rate from 5 percent to 6 percent, but that's not where Mr. Hogan would start. He has expressed support for reductions in the corporate income tax to make the state more competitive with Virginia, but he did not make specific promises of how much he would cut that tax or when. Nor did he join many of his Republican primary opponents in calling for steep cuts in — or even the elimination of — Maryland's individual income tax. During his interview with The Sun, Mr. Hogan said he would "start with a lot of the smaller taxes, tolls and fees coming out of the pockets of Marylanders."
One specific promise Mr. Hogan made during the campaign was to seek to eliminate taxes on certain retirement income, including pensions for former members of the military, police officers and fire fighters. We opposed that idea and still do on the grounds that tax relief should be focused first on those of more moderate means, but it is worth noting that this is an idea that has had bipartisan support (Lt. Gov. Anthony G. Brown proposed tax exemptions for some military pensions, and Del. Sheila Hixson, the chairwoman of the House Ways and Means Committee, has sponsored legislation to exempt from taxation pensions related to work as a first responder). And again, Mr. Hogan couched this goal as a long-term effort.
Perhaps the most telling sign of Mr. Hogan's intentions for fiscal policy is his selection of former state Sen. Robert R. Neall to head his transition team's review of the state budget. Mr. Neall, who has served in public office as a member of both parties, is generally considered one of the sharpest minds on Maryland budget policy. His record is one of a pragmatist, not a radical.
Many advocacy groups in this state who had been expecting Mr. Brown to be elected and continue most of Mr. O'Malley's policies are understandably nervous about what level of support Mr. Hogan will budget for their causes. But given the constraints he'll be working under — self-imposed and otherwise — the greater risk may be that he disappoints those who want an abrupt about-face from the O'Malley administration. Mr. Hogan's slogan was "Change Maryland," but he never suggested that was easy or would happen overnight.