Since launching his bid for governor, Robert L. Ehrlich Jr. has told military veterans he would reduce their income taxes, county leaders he would return state road repair money to the counties, and state workers that he would end the three-year-old furlough program.
The former Republican governor has aimed his most expensive promise at all Marylanders: A 20-percent rollback of the sales tax. At the same time, he says he won't raise other taxes or fees.
All of which has prompted the question that has dogged Ehrlich on the campaign trail: How does he plan to pay for the promises he is making?
Taken together, the spending and cuts he proposes would add $785 million to the state's operating budget, according to the General Assembly's nonpartisan Department of Legislative Affairs, as the state continues to face projected budget deficits of more than $1 billion.
"We have a saying in the budget business," said Neil L. Bergsman, who was budget director to Democratic Gov. Parris Glendening. "When you find yourself in a hole the first thing you should do is stop digging."
As the campaign has worn on, Ehrlich has provided some answers. He would stop funding a $126 million grant to local boards of education. He suggests a more aggressive push to rid the state of illegal immigrants could save millions in federally mandated health services.
He has also proposed cutting public information officers at the state agencies. It's not a big money saver, but could prove popular in the wake of revelations that labor department communications staff under Democratic Gov. Martin O'Malley spent frantic hours trying to add a positive sheen to a negative jobs report, overruling agency economists whose initial gloomy analysis proved accurate.
Ehrlich's campaign, meanwhile, says O'Malley is the one being reckless with spending.
Aides to the Republican campaign point to two planned light rail projects that would cost $3.4 billion. These would be partially funded by the federal government or shelved, O'Malley says. The state portion would be funded at least in part, by borrowing money, so would have less of an impact on funds for government programs.
Ehrlich aides say regular Marylanders don't distinguish between various types of government spending. "Money is money," said Henry Fawell, Ehrlich's spokesman.
The state has already set aside money for the rail projects, and recently approved a $160 million contract. The spending commitment drew questions from Comptroller Peter Franchot, a Democrat, who said the funds represent "an awful lot of money" for projects that are still "up in the air."
It is Ehrlich who has made the largest promise of the campaign, in the form of undoing the penny-increase in the state sales tax endorsed by O'Malley in 2007. Ehrlich says the loss in revenue would be offset in part by an increase in retail sales.
"People that are now going out of state will decide to go to Maryland," Ehrlich said. "You see story after story, anecdote after anecdote of Marylanders running over state lines" to purchase goods in jurisdictions with lower taxes, he said.
State budget analysts project the reduction would cost the state roughly $600 million in lost revenue; Ehrlich pegs the revenue loss at $400 million.
Also Ehrlich repeatedly says there will be a bump in consumer spending, which economists say could be true — up to a point.
"There is some elasticity in the retail market," said Richard Clinch, an economist with the University of Baltimore. But he estimated the resulting increase in revenue in the tens of millions, not the hundreds of millions.
Bergsman, the Glendening budget director, sees a net loss. "It is very clear that if you cut state taxes, the state loses revenue," he said.
Ending the furlough program would cost the state $65 million, according to the Department of Legislative Services. Exempting military pensions from the state income tax would cost $42 million. And Ehrlich has pledged and additional $60 million for local road improvements.
Ehrlich says his administration will be far friendlier to businesses than O'Malley's has been, creating jobs and adding revenue. "You cut a point off that unemployment rate and your deficits shrink," he said.
And the state's revenue does appear to be improving. Maryland faced a $1.5 billion budget gap in April, but state fiscal analysts say the figure now is probably closer to $1.1 billion. That trend gives Ehrlich hope that there will be more room to maneuver by January when the next budget is due.
Still the question emerges frequently and, on the campaign trail, Ehrlich has joked about the topic, telling reporters at one point that he would not "answer with specificity" because they would stop coming to his news conferences. When he quipped that he would reveal the details of his spending plan on Nov. 3 — the day after the election — the O'Malley campaign made it the basis of an online-only advertisement.
