State Leaders

State leaders are considering the first changes to Maryland's income tax brackets in 40 years to make them more progressive - and to help erase the state's projected $1.5 billion budget shortfall. The tax is essentially flat - the highest bracket kicks in at $3,000 in income - and the top rate of 4.75 percent is the seventh-lowest in the country. Gov. Martin O'Malley said this week that he wants to find ways to make the state's tax structure more progressive, and key legislators, including Senate President Thomas V. Mike Miller, have expressed support for at least a temporary tax increase on top earners, such as one that helped Maryland weather its last major fiscal crisis, in the early 1990s.

MARYLAND'S business climate has been a source of concern for decades. Are state politicians and regulators hostile to corporations? Do Maryland laws and attitudes chase companies away?In 1977, Joseph G. Anastasi, state economic development secretary under acting Gov. Blair Lee III, issued a provocative and unprecedented report warning that Maryland's prosperity was threatened by high taxes and environmental restrictions.That same debate resurfaced in the 1980s and in the 1994 elections. It will be with us once more, thanks to James T. Brady's sudden resignation as state economic development chief.

TO KICK OFF 1998, we decided to identify the key issues likely to be in the headlines during the coming year. Here are our thoughts on what's likely to happen -- and what should happen -- in the state, city and suburbs:MarylandSTATE LEADERS will split 1998 into two parts: The governing portion, which ends in the spring with the conclusion of the General Assembly session, and the political portion, which concludes with the fall elections.Thanks to a strong economy, Gov. Parris Glendening has $260 million in extra funds to disburse.

For $2 million a year, Marylanders wrap their top elected officials in a cocoon of security that far exceeds the protection offered leaders in nearby states. It is neither cost-effective nor security-efficient.No one questions the 24-hours-a-day protection given Maryland's governor. But why provide more than 30 state troopers to guard the governor plus the lieutenant governor, comptroller, treasurer, attorney general, Senate president and House speaker?Yes, the world can be a dangerous place.

WASHINGTON -- About all that has been clarified by Ross Perot's gathering of the state leaders of his "United We Stand America" organization in Dallas is that he continues to hold a firm grip on it behind his customary veil of secrecy.Not only were reporters kept out of almost all the business sessions, but by a vote of 42-8 the leaders followed Perot's preference of not releasing any numbers on the organization's membership. At a press conference, he again dismissed questions about the size of the membership as "Silly Putty."

Leslie E. Hutchinson knows a good thing when she sees it. Her position as a state delegate from Essex can be leveraged in any number of ways to funnel business to her new venture, Events Extraordinaire, a super-catering firm that will do everything from rent space to provide meals to line up speakers and entertainers. Just turn the screws on state officials and other interested bystanders in Annapolis and the money should roll in.Sounds simple. It is. That's why Ms. Hutchinson wrote to 50 state agencies, cabinet secretaries and gubernatorial aides announcing her new venture, making it clear she's got a product to sell.

Baltimore County's legislative delegation has made itself conspicuous during recent General Assembly sessions by vocally opposing budget-balancing measures that might peeve angry voters back home. The predictable upshot of this strategy has been a freeze-out of the county by Gov. William Donald Schaefer and other state leaders.And yet, delegation members express hurt and surprise when they count the slights against the county -- new legislative districts that link parts of the county with Baltimore City, the governor's unwillingness to free up state money for the purchase and preservation of Cromwell Valley land, the lack of major committee chairmanships for county legislators, and so on.But they salve their bruised feelings with the knowledge that their theatrics are like money -- or votes -- in the bank come election time.

"How does a community blessed with a rich and varied cultural tradition sustain it through troubled economic times?" That is the question that opens "Building Community: The Arts and Baltimore Together," a thought-provoking report unveiled yesterday by the Baltimore Community Foundation.The foundation's answer lies in a renewed commitment to the arts by city and state leaders -- not only to protect the city's cultural legacy by strengthening older arts institutions and encouraging new ones, but as a way of overcoming the racial and economic divisions that threaten Baltimore's future as a vibrant place to live and work.

Baltimore City officials must feel like abandoned orphans in the State House these days. Everywhere they turn, someone else is sticking a knife in their backs. Even their friends aren't doing them any favors.Gov. William Donald Schaefer, a devout city-lover, tried to help Baltimore in his state of the state address by announcing his plan for a diversion of 10 percent of the local piggyback income tax levy to the subdivision where each taxpayer is employed. This reformulation for distributing tax revenues would aid Baltimore and counties with big employment centers.

Senate President Thomas V. Mike Miller says state legislators are so distressed over the thought of a special General Assembly session to cure Maryland's latest deficit woes that "if we even considered the prospect, we'd have a revolt." That's the kind of no-leadership attitude which has placed lawmakers in such low public regard these days.Less than four weeks into the new fiscal year, Maryland is already somewhere between $170 million and $250 million in the red. Some experts are predicting a shortfall of $400 million by next spring.

Gov. Martin O'Malley plans to outline about $300 million in budget cuts today that will mostly fall on state agencies. But future rounds of cutbacks could include furloughs of state employees, officials said. O'Malley, a Democrat, briefed legislative leaders on his proposed budget cuts over a two-hour dinner meeting at the governor's mansion in Annapolis Monday night. The governor must pare about $700 million from the $14 billion budget for the fiscal year that began this month because the recession has caused tax receipts to slump.

The thorny questions of granting driver's licenses to illegal immigrants and how aggressively to regulate electricity markets await the Maryland General Assembly as it enters its final week of the 2009 session. And there's still a budget to balance amid the country's worst fiscal crisis in decades. Senators and delegates have yet to resolve several fiscal disagreements, such as funding to buy land for preservation and how much to cut aid to local governments. Still, the discord could have been worse.

A week before the governor delivers his "State of the State" address in the ornate Maryland House of Delegates chamber, the state's tax collector will today orate on the "State of the Treasury" in a Bethesda bank building. It will be the first such address in recent memory by a state comptroller -- and one sure to raise eyebrows about Peter Franchot's political aspirations. He says he's just following the law of the land. "It's very specific in the state constitution," said Franchot, a Montgomery County Democrat.

State leaders are considering the first changes to Maryland's income tax brackets in 40 years to make them more progressive - and to help erase the state's projected $1.5 billion budget shortfall. The tax is essentially flat - the highest bracket kicks in at $3,000 in income - and the top rate of 4.75 percent is the seventh-lowest in the country. Gov. Martin O'Malley said this week that he wants to find ways to make the state's tax structure more progressive, and key legislators, including Senate President Thomas V. Mike Miller, have expressed support for at least a temporary tax increase on top earners, such as one that helped Maryland weather its last major fiscal crisis, in the early 1990s.

OCEAN CITY -- Jockeying over how to solve Maryland's projected $1.5 billion budget shortfall has intensified, with the state's top leaders staking out often conflicting positions about what spending cuts, tax increases and new revenues should be on the table for discussion. Despite near-universal agreement in Annapolis that fixing the state's persistent gap between revenues and spending is a top priority, no concrete proposals have emerged. No government commissions or task forces are studying the state's budget.

A Baltimore Circuit Court judge has dismissed a $14 million lawsuit accusing city and state leaders of failing to protect the Dawson family from the 2002 firebombing that killed the couple and their five children. Judge M. Brooke Murdock struck down an argument from survivors that the city created danger by soliciting participation through its "Believe" campaign and by encouraging residents to report criminal activity to police. The judge ruled that the advertisements were directed at all Baltimore residents and not to the Dawsons specifically.

Special programs for gifted and talented students already have been canceled. Elementary school counselors have been laid off or moved to middle or high schools. And with money for substitute teachers cut, some classes are doubling up when a teacher is out sick. For Baltimore's school children the financial crisis has brought disruption. But the next round of cost-cutting measures - which top state officials say will be necessary no matter what school system bailout plan emerges in Annapolis - likely would be more damaging.

THE RECENT STORMS drenching this state -- and closing major roads, transit systems and rail lines -- provided a graphic reminder of Marylanders' reliance on the state's transportation network. If there's any issue on which state leaders ought to truly take a "One Maryland" approach, ought to forge a statewide vision, it's transportation. The time for that is now: Maryland transportation funding -- more than $10 billion short of the needs identified by the administration of Gov. Robert L. Ehrlich Jr. through 2010 -- is deep into a full-blown crisis.

With bold promises of open government and policy reform, they defeated two incumbents in a bitter primary and racked up huge margins over their Democratic opponents in the general election. But now, the three Republicans who will be inaugurated tomorrow morning for four-year terms as Carroll County commissioners are set to begin the more challenging task of governing. And they know that they face great, perhaps exaggerated, expectations - expectations that they will reduce residential growth, forge better relations with state leaders and attract businesses that offer higher-paying jobs to Carroll.

MAYBE PEACE slowly dawns among the Democrats. In public, Martin O'Malley fumes about lack of State House "leadership," but in private, he and Kathleen Kennedy Townsend are finally talking. In public, O'Malley decries Annapolis' insensitivity toward Baltimore. But in private, he and Townsend have exchanged letters indicating they are philosophically simpatico. All of this occurs as O'Malley decides if he'll stay at City Hall or run for governor. For eight months, he and Townsend kept a silent distance, O'Malley insisting his city was getting short-changed by state leaders - clearly casting a cold eye Townsend's way - and the lieutenant governor biding her time and hoping O'Malley's temper would cool.