State lawmakers will convene Wednesday for the 431st legislative session of the Maryland General Assembly, prepared to debate whether any plan to halve the state’s $1 billion structural deficit should include new revenues or be comprised entirely of spending cuts.

Meanwhile, the specter of a high-profile effort to make Maryland the seventh state, including Washington, D.C., to legalize same-sex marriage looms throughout the ornate statehouse chambers, promising to fix the national media’s crosshairs on Annapolis as the debate reaches its crescendo.

The 90-day session also could resemble a three-month prize fight pitting Gov. Martin O’Malley (D) and urban legislators against those from rural districts, who have cried foul at a number of key initiatives backed by the state’s chief executive.

During a meeting with reporters last month, O’Malley would not rule out including tax increases in his fiscal 2013 budget, and many expect him to support a hike to the state’s 23.5-cent-per-gallon gas tax.

“The governor’s going to be focusing on job creation [and] it’s going to be a lot of debate, but the governor’s going to propose a gas tax increase,” said Senate President Thomas V. “Mike” Miller Jr. (D-Calvert, Prince George’s).

Miller has pushed for an increase to the gas tax for years but found resistance from lawmakers wary of raising taxes amid a struggling economy and high oil prices.

“A lot of the tax and spend crowd want to raise a whole host of taxes,” including the gas and flush taxes and vehicle registration and inspection fees, House Minority Leader Anthony J. O’Donnell (R-Calvert, St. Mary’s) said. “I think all of those, considering the state of our economy and how people are struggling to pay bills, are all ill-advised at this time.”

In order to boost transportation funding, a state commission has recommended the gas tax be raised by 5 cents annually for three years and estimated doing so would raise an extra $491 million in annual revenue.

“It’s controversial, but it’s something that needs to be done,” Miller said.

The legislature also could index the gas tax to inflation so that it automatically rises in the future, a “nice, sneaky way to increase taxes without ever having to take the heat politically for it,” St. Mary’s College of Maryland political science professor Todd Eberly said.

Del. Mark N. Fisher (R-Calvert) said he has heard from his colleagues on the House Ways and Means Committee that there also could be proposals to raise the corporate income tax and charge state residents 1.3 cents for each mile they drive between emissions checks. Both would be “job killers,” he added.

“They’re going to try and raise taxes on everything they can find,” Del. John F. Wood Jr. (D-St. Mary’s, Charles) said. “It’s unfortunate, but we have a legislature that loves to raise taxes.”

O’Donnell, who last month announced his congressional campaign against longtime U.S. Rep. Steny H. Hoyer (D-Md., 5th), said the state should prepare for the potential downsizing of the federal government and pending costs of federal health care legislation by paring down the budget even further than required by the structural deficit.

“We’re fortunate in Southern Maryland but it scares me what’s going on with the federal government,” Wood said. “It could filter down to St. Mary’s County with the naval installations we have.”

Del. John L. Bohanan (D-St. Mary’s) has grown tired of the annual panic surrounding the structural deficit, calling it “important only to those who want to fully fund everything, which we can’t.”

Bohanan, who chairs one of the four budget subcommittees in the House, pointed out that lawmakers have begun the last few legislative sessions facing large structural deficits, which occur when projected spending outpaces expected revenues, but found a way to meet their lone constitutional mandate — a balanced budget — each time.

“We can’t afford [the structural deficit],” Bohanan continued. “It’s the aspiration. It’s what we would like to spend if we could afford it. But we can’t budget that way in tough fiscal times.”

One of the first items lawmakers will address is legislative redistricting. O’Malley released his plan last month and is expected to introduce it to the legislature the first day of the session, after which lawmakers will have 45 days to pass an alternative. Otherwise, the governor’s plan becomes law.

Bohanan expects to help draft new policy addressing concerns with the state’s maintenance of effort law, which requires local jurisdictions to annually maintain at minimum the previous year’s level of school funding.

In recent years, some counties struggling to meet maintenance of effort, particularly Montgomery County, have argued that they should not be penalized since they funded education well above maintenance-of-effort levels for years before the recession hit.

Bohanan also noted that some jurisdictions have opted to fund their schools below maintenance of effort and accept a one-year penalty, thereby re-establishing their annual requirement and saving money in the long run.

To discourage the future use of septic systems, which environmentalists say leak too much pollution into the Chesapeake Bay, another state commission has recommended raising the annual $30 “flush tax,” which goes toward bay restoration programs, to $60 in 2014 and $90 in 2015.

O’Malley has made plain his desire to curb the proliferation of septic systems and last session pushed a bill that would have banned their use in new residential developments, but the proposal met stiff resistance from rural lawmakers who said the ban would effectively place a moratorium on housing construction in their districts.

The bill was eventually shelved for further study, but the governor plans to revisit the issues in 2012, setting him on a collision course with those same rural legislators, who have been agitated even further by a new land-use plan intended to control sprawl.

“I think what’s going to happen is you’re going to see almost an adverse relationship between the rural areas and the more urbanized areas of the state,” Sen. Roy P. Dyson (D-St. Mary’s, Calvert, Charles) said.

Last month, O’Malley, flanked by former governors Harry Hughes and Parris Glendening, adopted PlanMaryland, which will funnel state funding to projects in accordance with “smart growth” principles.

Rural lawmakers have lambasted the plan as usurping the authority of local governments by incentivizing development supported by the state.

“It looks like empire building in the Maryland Department of Planning, the executive branch,” O’Donnell said.

Though Sen. Thomas “Mac” Middleton (D-Charles) admits he has not read the plan in its entirety, he said he “cannot support any initiative for the state to come in [and] take over land use.”

“The local governments should be responsible for land use,” Middleton added. “I don’t think Southern Marylanders want some executive in Baltimore city having control over land use.”

Another of O’Malley’s initiatives that will return in 2012, albeit altered, is his push to establish an offshore wind industry in Maryland.

The governor introduced a bill last session that would have required utilities to enter into 25-year power purchasing agreements with offshore wind generators. Murky cost estimates for both utilities and consumers led to myriad questions from uneasy lawmakers. As chairman of the Senate Finance Committee, Middleton played a key role in ultimately shelving the bill.

Now legislators expect O’Malley to draft a different bill, perhaps one modeled after a New Jersey law that extends tax credits to offshore wind developers, which also receive renewable energy credits based on the amount of energy they generate. Utilities then are required to purchase a certain number of those credits from the developers.

“I personally would need to have a bill that would tweak the New Jersey bill” and guarantee a positive net impact for the state, Middleton said. “With those provisions, the governor is likely to get a bill through.”

Any wind initiatives would likely incorporate the recent agreement by Chicago-based utility Exelon Corp. to invest $30 million in offshore wind in Maryland as part of its pending $7.9 billion purchase of Constellation Energy, which owns the state’s largest utility, Baltimore Gas & Electric.

But Eberly said he doubts lawmakers will be willing to increase taxes and utility bills in the same year.

“I don’t see that happening. I think it’s one or the other,” he said, giving the edge to taxes. “The pressure for revenue is so great. Gov. O’Malley’s green agenda for Maryland has not seen much success and I don’t see that changing.”

No legislation figures to generate more heated and passionate debate than that to legalize same-sex marriage, an issue that many lawmakers felt hijacked the 2011 session and will undoubtedly draw national attention in the coming months.

“If they think it hijacked it last time, get ready,” Eberly warned.

Last year a bill that would have legalized same-sex marriage fell a few votes short of approval in the House of Delegates, despite the impassioned testimony of dozens of same-sex couples during committee hearings and impassioned arguments from the state’s eight openly gay lawmakers, including Del. Peter F. Murphy (D-Charles), who drew a standing ovation from his colleagues after announcing his sexual orientation during debate on the House floor.

Proponents of same-sex marriage got a major boost over the summer when O’Malley, who sat out the 2011 debate, said he would sponsor similar legislation in 2012.

O’Malley’s support came as a sign to many that he was looking to keep pace with New York Gov. Andrew Cuomo (D), whose national profile received a boost when the Empire State legalized same-sex marriage in July.

Both Cuomo and O’Malley are thought to have Oval Office aspirations and are considered potential presidential candidates in 2016.

But it remains unclear whether the governor’s support will be enough to sway the critical votes needed to pass a same-sex marriage bill.

“In many ways this will be a test of Martin O’Malley,” Eberly said. “If O’Malley can’t get his own party to pass it, then how effective will he be nationally?”

In addition to legalizing same-sex marriage, the bill would have given churches the right to refuse to marry a same-sex couple.

The only member of the Southern Maryland delegation to support the bill last session, Murphy said he wanted to read the actual legislation before committing to it again.

“I haven’t seen the bill and I of course support the bill as far as from the religious freedom piece, but as we always say, the devil’s in the details,” Murphy said.

Even if the legislature does vote to legalize same-sex marriage, it’s a virtual certainty that church leaders and conservative activists will be able to round up the 56,000 signatures needed to petition the bill to referendum, letting the voters decide the issue.

“I think its going to be a very tough, close fight,” O’Donnell said. “Should the governor succeed in passing that legislation, I think it will be promptly petitioned to referendum and will be a question on the 2012 ballot.”

However, Eberly said he wouldn’t be surprised if lawmakers attempted to restrict voters’ ability to petition bills to referendum.

“No legislature likes to be one-upped by the electorate,” he added.

Same-sex marriage also could prove useful to conservative lawmakers, providing them with an unusual amount of leverage on other issues, Eberly said.

“Lawmakers will [tell O’Malley], ‘We know you need this for your profile’ and will use it to get concessions from him,” he said. “He’s set himself up to really be at the whim of the General Assembly and they will use that to their advantage. If the assembly is smart, if the leadership is smart, they will hold that vote near the end of the session so they can hold that bargaining chip the whole way through.”

If push comes to shove, Eberly said he believes O’Malley will choose same-sex marriage over some of his other agenda items.

“He’s going to have to prioritize and decide what things is he willing to sacrifice to get something else,” Eberly said. “For O’Malley, the most high-profile issue nationally is same-sex marriage. I expect he will be willing to negotiate and barter a whole host of other things to get same-sex marriage. You’re going to see some really cool, interbranch battles going on.”

But some legislators fear that allowing same-sex marriage and other carryover issues from last session to fester through April could ultimately distract from other pressing matters, like job growth and economic development.

“For the state, I think the number one issue should be jobs,” Dyson said. “I felt that last year. I felt that we diverted a lot of our attention to other issues. What do I hear on the street? ‘If I have a job, help me keep it. If I don’t have a job, help me find one.’”

Del. C.T. Wilson (D-Charles) said, “The biggest issue should be having to do with our budget and the 15-cent gas tax. ... What will be the biggest issue is the same-sex marriage. It’s just sad it’s the one the media gives the most attention to.”

Since the returning issues already were discussed last year, “hopefully everyone will be fairly well informed and it won’t take up as much time,” Del. Sally Y. Jameson (D-Charles) said. “Do I see [same-sex marriage] as an issue that is more significant than any of the other issues? I really don’t.”

In Calvert County, Miller plans to accrue funding for the College of Southern Maryland’s Prince Frederick campus, a skateboard park in Chesapeake Beach and a recreational park in Dunkirk.

Fisher would like to see a bulk of tax revenue from pull tab bingo machines in Chesapeake Beach stay in the county. The state currently receives $8.5 million annually from the machines while the town gets $700,000 and the county nets nothing.

“This is the theme in Annapolis: send all your money to Annapolis and it never comes back to the communities that need it,” Fisher said.

An advocate for smaller government, Fisher would actually like the county to have direct oversight of the pull tabs, believing that in this case a little Big Brother could help boost transparency.

“Oversight is a good thing,” Fisher said. “I think the operators would welcome it because it creates public trust.”

In Charles County, Murphy said he wants to take a closer look at the disparity between physician reimbursements in rural and urban areas and identify ways to keep more doctors working in Southern Maryland.

Wilson plans to introduce a bills relating to criminal law, including one that would make it easier for local governments to foreclose on nuisance properties being used for illegal purposes.

Middleton said his committee will look into whether the state should tax credit unions just like regular banks.

In St. Mary’s County, Wood intends to introduce a bill that would allow distilleries in St. Mary’s County. The county commissioners have already changed the local zoning ordinance to permit small distilleries, but the state must also sign off before any can actually be built.

jnewman@somdnews.com