WASHINGTON — WASHINGTON - During his third visit to the capital in little more than a week, Gov. Martin O'Malley suggested that his administration's 2008 budget fix - including tax increases that required a special session of the General Assembly - is a national model for what he called the "American value of fiscal responsibility."
Before a friendly lunchtime audience at the liberal Center for American Progress, the Maryland Democrat said restructuring the state income tax and raising sales and corporate taxes had enabled the government to close a $1.7 billion projected gap between spending and revenue while increasing funding for school construction, health coverage and other administration priorities.
"We were asking our neighbors to sacrifice more at a time when they were already getting hammered and the dollar was already being weakened," O'Malley said. "None of these decisions were made lightly."
But he added: "I believe that the people that we serve actually have a far greater capacity to embrace, understand and make investments than sometimes we give them credit for."
The $1.3 billion in new taxes appeared to cost the first-term governor in popularity, at least in the short term. A year after O'Malley took office with 53 percent of the vote, a Sun Poll in January found that just 35 percent of state voters approved of the way he was handling the job. It was among the lowest approval ratings for a governor in a decade of surveys and was only eight percentage points higher than President Bush's among the largely Democratic state electorate.
Maryland is not alone in confronting fiscal challenges. The National Conference of State Legislatures said last week that state governments are slashing spending in the face of a collective budget shortfall of $40 billion. The conference blamed downturns in manufacturing, financial services and housing for declining revenues in several states.
O'Malley said he arrived in office as "the chickens of our bad math were coming home to roost."
"In a flash of bipartisan irresponsibility," he said, the state had committed nearly $2 billion in spending, mostly for public education, "while at the same time cutting income taxes for millionaires and everybody else," at a cost of another billion dollars.
The commitment to public education, called the Thornton Plan, came in 2002, four years after the tax cuts. Both were approved by Democratic General Assemblies, with Republican support, during the administration of Democratic Gov. Parris N. Glendening.
