ANNAPOLIS – Gov. Robert Ehrlich signed his first measures into law Tuesday, but repeated his promise that the General Assembly’s $135.6 million tax package will never earn his signature.
Lawmakers sternly warned Ehrlich not to veto the bill, but he said, “It won’t be long,” before he makes good on his threat.
Ehrlich said he plans to substitute program cuts for the revenue, but it is unclear where or how he’ll find the savings in Maryland’s more than $22 billion budget, which began the year with a $2 billion deficit.
The upcoming veto will “set the tone” against tax-increase reliance in government, Ehrlich said.
His vows to veto any sales and income tax hikes kept those proposals from full consideration, despite the loss of $400 million in slot-machine revenues from Ehrlich’s original budget.
“If you can’t defeat an easy funding source now,” he said, it would be tough to stop taxes later in his term.
“He should reconsider,” said Senate President Thomas V. Mike Miller, D- Calvert, “Every cut here hurts . . . Poor families, mothers on welfare, are going to lose programs.”
Both Miller and House Speaker Michael Busch, D-Anne Arundel, say the state will need a major sales or income tax increase next year.
Assembly Republicans, however, were gleeful in their support of their governor.
“I had several Republicans show up with veto pens,” Ehrlich said at Tuesday’s bill signing ceremony.
Ehrlich said wrapping up the state’s deficit without a sales or income tax measure was the monumental success of this year’s session, which ended Monday.
Businesses will be the biggest beneficiaries of Ehrlich’s veto of a trio of taxes: a three-year, .7 percent increase on corporate income, a 2 percent levy on health maintenance organization premium payments and $45 million in loophole closings.
But a veto doesn’t mean no new taxes or fees. There are more than $200 million in increases in the budget next year.
Ehrlich proposed a 5-cent property tax increase worth $165 million and an $85 million hike in annual reporting fees for businesses. The Legislature limited the business fees to $59 million and the Board of Public Works will likely approve the property tax in an upcoming meeting.
The board, consisting of Ehrlich, Comptroller William Donald Schaefer and Treasurer Nancy Kopp, will also have to vote to replace the vetoed taxes with cuts.
A spokesman for Schaefer said he would not comment until it was clear the board would have to deliberate on cuts.
Kopp isn’t convinced the budget needs fixing. “The General Assembly passed a balanced budget,” she said. “I don’t believe additional cuts are necessary,” Ehrlich confirmed he would veto the bill after a ceremony where he signed 52 bills into law alongside Miller and Busch. Many of the new laws dealt with local matters, including a bill to allow Frederick County to award a liquor licenses to stadiums and another authorizing a loan to a Boys and Girls Club in Largo. Ehrlich said he was proudest of a series of bills to restore benefits to 4,000 Bethlehem Steel retirees, who were dropped from the company’s insurance program as part of its merger agreement. The bills will allow those who are too young to qualify for Medicaid to receive state-paid insurance or federal credits, laws Ehrlich called a model for the country. – 30 – CNS-4-8-03