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O'Malley Warns of More Budget Cuts, Tax Increases

Pipkin: Governor "spells out a world where the pie’s not big enough and the revenue is not big enough."

Gov. Martin O’Malley warned county leaders to be ready for more state budget cuts and possibly tax increases when the General Assembly meets in January.

“We will all have to be open to more cuts, and at the same time—to protect our children’s future—we must be open to new revenues,” O’Malley said Saturday in a nearly 25 minute speech to county leaders at the Maryland Association of Counties conference in Ocean City.

"One year I hope to be able to come before you and proclaim a return to full employment, a restoration of all highway user dollars and other state grants," O'Malley said. "One year I hope to come here and proclaim the existence of a giant, deficit-slaying surplus. But that year isn't this year."

The governor met with county leaders prior to the speech but apparently offered no more insights into the potential new revenue streams he said are needed than were in his speech.

“The bottom line is there are so many uncertainties that my sense is it’s difficult for the governor to give too many specifics about the upcoming budget and where we’re headed without knowing what’s happening in Washington,” said Ken Ulman, Howard County executive and MACo president.

Increases to the sales and gas tax are just two thought to be on the table. Some legislators had been predicting those increases could come up when the General Assembly returns to Annapolis in October to redraw the state’s eight congressional districts.

The governor offered no specifics about new or increased taxes in his speech. He declined to provide specifics afterwards to reporters before he headed to the beach.

Both O’Malley and House Speaker Michael Busch both said that, barring a dramatic change at the federal level, any discussion on taxes would not take place until the 2012 session which begins in January.

“It’s a better opportunity to discuss the overall vision and direction of the state during the period when you’re dealing with the budget of the state of Maryland, which is during the 90 day session,” said Busch, an Anne Arundel County Democrat. “Unless there’s some kind of catastrophe that comes about because of the federal government, I think we’re better off waiting for the 90-day session.”

O'Malley, during his speech, highlighted what he said was the state's interdependence on ongoing federal issues including a new so-called super committee charged with finding more than $1 trillion in cuts to the federal budget. Those cuts are not likely to be known until late December— weeks before O’Malley would be expected to deliver his budget to state legislators.

“Any further help from Washington is doubtful, and more serious hurt to all state economies -- from the narrow-minded faction of jobs-obstructionist in Congress -- is very likely,” O’Malley said. “We must be willing to adapt; ready to meet what may come from our Congress by December with the balanced approach necessary to move our state forward.”

O’Malley called Republicans in Congress “economic saboteurs.”

At least one leading state Republican legislator said he was unimpressed with O’Malley’s speech.

Sen. E.J Pipkin, an Eastern Shore Republican, called O’Malley’s speech “way out of balance and way out of touch.”

O’Malley “spells out a world where the pie’s not big enough and the revenue is not big enough,” Pipkin said. “I think that’s the wrong view.”

“I don’t think that Maryland, by any objective benchmark, is under-taxed,” said Sen. E.J. Pipkin, an Eastern Shore Republican. “People aren’t coming up to me and saying they want to be taxed more.”

“This is a governor talks about more taxes and more spending and it’s time to stop digging the hole,” Pipkin said.

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Butch Jansen August 24, 2011 at 07:17 PM
"You cannot help the poor by destroying the rich. You cannot strengthen the weak by weakening the strong. You cannot bring about prosperity by discouraging thrift. You cannot lift the wage earner up by pulling the wage payer down. You cannot further the brotherhood of man by inciting class hatred. You cannot build character and courage by taking away people's initiative and independence. You cannot help people permanently by doing for them, what they could and should do for themselves." - Abraham Lincoln
Butch Jansen August 24, 2011 at 07:22 PM
Infrastructure improvements were suppose to have been a big part of the first Obama stimulus plan which he lauded there would be "plenty of jobs created from these shovel ready projects." Oh, but wait, he just recently ADMITTED that the projects weren't in fact "shovel ready as he had thought." So where did all that stimulus money then go? Hmmmmm!!!!!!!!
Robert Armstrong August 24, 2011 at 07:39 PM
The DOE used the money to hire a almost a hundred thousand people.
Tom Barnes August 24, 2011 at 07:41 PM
That's all godo and fine, Butch, but there is a failed logic in America. To date, that logic has been "if we give the wealthy all kinds of breaks then they will create jobs." So I ask: 'WHERE ARE THOSE JOBS?' The weathly should NOT have loopholes or tax breaks that are not given to the middle class and the poor. This is WHY there was a revolution in the 1917 in Russia. Do we need that again but this time on our shores? Think about it.
Tim August 24, 2011 at 09:02 PM
Trickle Down Economics has been proven time and again, over the past 3 decades, to be an irrelevant and thus failure of an economic policy. It hasn't made the economy inherently worse over time, but it hasn't improved economic growth (defined by GDP) either. It's effects are limited solely to benefitting the rich. Serriously, look no further then last year. Repubc demanded President Obama extend the BTC's for the wealthy. They claimed "It'll create jobs!". So the President gives in. Job creation? LOL. Nowhere to be found. Then they simply turn around and blame the President for spending too much.

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