ANNAPOLIS – A long-serving member of the House Ways and Means Committee Thursday proposed a compromise to stop the bickering among the state’s top lawmakers over whether to use taxes or slot machine revenue to plug the state’s budget gap.
Delegate Clarence Davis, D-Baltimore City, laid out his plan one day after House Speaker Michael Busch, D-Anne Arundel, and Republican Gov. Robert Ehrlich brought the General Assembly to gridlock over taxes and slots.
Busch pushed a $1 billion tax package through the House last week as an alternative to a slots proposal, which the governor favors to solve the long-term deficit. Busch’s tax plan has received a chilly reception in the more conservative Senate, which also backed slots.
Davis suggested a 1 percent sales tax increase combined with a slot machine bill to raise the $800 million needed to close Maryland’s budget shortfall. He said he was optimistic a compromise could be reached, but acknowledged both sides have hardened their positions.
“The governor has some good ideas, but he can’t do it without revenues,” Davis said. “I believe there’s a way out, but it’s time to stop bickering.”
Busch remained non-committal about a compromise taxes and slots bill after closed door meetings with Budget Secretary James “Chip” DiPaula Thursday.
“We’re looking for a solution to next year’s budget before slots,” Busch said. “The vast majority of the leadership in the House doesn’t want slots.”
Busch and House leaders said Wednesday the governor’s slots proposal would remain stalled until Ehrlich made it clear what other revenue sources he would accept in filling the budget hole.
Ehrlich responded by telling House Democrats to work out their differences with Senate Democrats before coming to him.
The governor has unwaveringly opposed any increases in sales or income taxes to pay for landmark education reforms and other urgent funding needs. However, Ehrlich has said other tax increases may be acceptable, including closing some loopholes that give businesses a break.
While the fiscal year 2005 budget is balanced without taxes or slots, the 2006 budget would be marred by a $1 billion hole in the absence of additional revenues.
Ehrlich threatened earlier this week to fill that gap with deep cuts to local governments and health care if slots fail for the second consecutive year.
Senate President Thomas V. Mike Miller Jr., D-Calvert, said he would support Davis’ compromise, but doubted the proposal would receive enough votes in the Senate to prevent the governor from vetoing it.
“Reasonable people should have found a compromise by now,” Miller said. “The speaker and myself need to bend a bit, but the governor needs to bend, too.”
Miller predicted a “train wreck come April 11 or 12” if neither side backs down.
The annual 90-day session is scheduled to adjourn April 12, leaving lawmakers little time to forge a compromise.
Davis said his Ways and Means subcommittee would continue working on the Senate’s revised version of the slots bill, even as Ways and Means Chairwoman Sheila Hixson, D-Montgomery, said she would keep the bill in committee until the governor agreed to discuss taxes.
Hixson has repeatedly said a slots bill will not make it to a floor vote in the House without additional revenues included.