MARYLAND

O'Malley: Raise taxes to invest in roads, schools

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ANNAPOLIS, Md. (AP) - Gov. Martin O'Malley on Wednesday urged lawmakers in his State of the State speech to make difficult decisions to raise taxes in order to spur job growth through investments in schools, roads, bridges and waste water treatment improvements.

Gov. Martin O'Malley stated in his State of the State speech that he wants taxes to be raised. (Photo: Associated Press)

O'Malley, a Democrat in his second term, said Maryland is moving out of the recession, although the state still has not recovered all the jobs that were lost.

"We cannot kid ourselves into thinking that by failing to invest in our future we are somehow saving resources - that we are somehow being clever in saving money, for everything has a cost," O'Malley said. "Failing to make decisions that are consistent with the best interests of the next generation, this too has a cost."

O'Malley has proposed an ambitious budget plan for the current legislative session. For example, his capital budget, which is used to pay for state infrastructure, would increase includes $3.6 billion by increasing state borrowing to pay for projects that officials say could create more than 51,000 jobs.

He also is pushing for a variety of tax increases, proposals that have brought strong criticism from the state's Republican lawmakers.

One would levy a 6 percent sales tax on gasoline, phasing it in by 2 percentage points a year. Another would double the state's "flush tax," a $30 annual tax on sewer bills. The governor's budget also would raise taxes on cigars and smokeless tobacco from 15 percent of wholesale to 66 percent. O'Malley also wants to require online sellers such as Amazon to begin collecting sales taxes that are owed on such purchases.

Sen. E.J. Pipkin, R-Cecil, said he disagreed with O'Malley's take.

"The state of this state is that it is heavily taxed, and those taxes are job killers," Pipkin, who is Senate minority leader, said in the GOP's response to O'Malley's speech.

Pipkin and other Republicans contend this is the worst time to raise taxes, when the state is trying to recover from a recession. Republicans also say O'Malley actually is hurting the middle class, despite the governor's stated goal of expanding it.

"The governor has raised taxes and fees and tolls," Pipkin said. "He ignores the fact that people are still struggling to keep their heads above water in these economic times."

But O'Malley emphasized that the state can't fall too far behind in maintaining infrastructure crucial to economic development.

"To create jobs, a modern economy requires modern investments," O'Malley said. "Investments by all of us, for all of us."

O'Malley also mentioned his proposal to shift a significant portion of teacher pension costs to the counties.

"We will partially fund this education cost, along with other priorities, by capping income tax deductions and phasing out some exemptions for the 20 percent of us who earn more than others," O'Malley said.

House Speaker Michael Busch, D-Anne Arundel, described the governor's speech as well-received by his chamber, which is divided on some of his priorities, especially legalizing same-sex marriage. He also noted the difficulty of raising taxes.

"The issue is, 'Who's going to have the political will to come up with a solution to that political problem?' I don't think there's anybody out there who wants to see their education money cut to their county or wants to see tuition go up, so if you're not going to do those things, you have to make some tough decisions," Busch said.

The governor said he understands that Maryland residents are still feeling the effects of the recession, but he said necessary investments won't be made by anyone else.

"Asking our fellow citizens to do more will not be popular," O'Malley said. "But without anger, without fear, without any meanness in the course of this discussion, let's ask one another: How much less education do you think would be good for our children's future? How much less education do we want? How much less public safety? How many fewer jobs? There are costs, and there are values."

O'Malley also mentioned his push to legalize same-sex marriage in Maryland.

"It is time to join with clergy, faith-based organizations, civil rights organizations, community leaders, and individuals across our state to pass a civil marriage law that protects religious freedom and civil marriage rights equally under the law," O'Malley said.

A same-sex marriage bill passed the Senate last year, but died in the House of Delegates.

Delegate Anthony O'Donnell, R-Calvert, said he was shocked by how little the governor said beyond what was already known to lawmakers.

"I've listened to 18 State of the State speeches, and I've never heard one as bad or as partisan as this one, and there's palpable anger among delegates from both sides of the aisle," O'Donnell, the House minority leader said.

The annual address was a time for the governor to solidify his priorities with lawmakers - not a time for "flowery rhetoric," said Sen. Jamie Raskin, D-Montgomery.

"It's a tough session that we're in, but the governor is obviously ready to fight for his proposals, and that's what we need to hear," Raskin said.

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