There may be method in Miller’s madness

The House speaker tossed cold water on these ideas and the governor, as is his practice these days, refused to say anything definitive about higher taxes. Miller appears isolated.

But don’t write off the Senate president’s gambit. At first blush, these may seem like nutty ideas, but a deeper look at Miller’s reasoning reveals a game plan grounded in hard-to-refute logic.

No. 1, this is the best year for Democrats to hike taxes en masse. By the time the 2010 elections roll around, few voters will remember a revenue-raising plan hatched way back in 2007.

No. 2, the magnitude of tax increases needed for new highway and mass transit projects is huge. So is the shortfall in general fund revenue that could quickly exceed $2 billion by this time next year. All this could turn into political quicksand for Democrats.

No. 3, as Miller well knows, the last Democratic governor to lose re-election went down to a humiliating defeat because of an unpopular penny increase in the sales tax. William Preston Lane and his family were pelted with pennies during the 1950 gubernatorial campaign. Critics called him ‘‘Penny Lane.” He lost in a landslide.

No. 4, the slowdown in the national economy and the nervous reaction on Wall Street bodes ill for Maryland’s revenue fortunes. At the least you can expect disappointing growth in tax collections. That will add to this state’s shortfall.

No. 5, the state’s transportation trust fund is virtually tapped out. Every dollar expected to come into the trust fund for the next six years has been allocated to port, airport, motor vehicle and mass transit projects. That leaves big-ticket items without any funding — like the Purple Line mass transit project in the Washington suburbs and the crucial Red Line project for Baltimore’s mass transit system.

No. 6, there’s no money for road, rail, school and housing projects that are urgently needed to accommodate 50,000 men, women and children coming to live in Central Maryland, starting next year, as part of the military’s base-realignment plan.

No. 7, there’s no money to pay for badly needed additions to social programs — health care for the uninsured, a growing student population at state colleges and universities, further improvements to K-12 public schools, more help for the state’s aging population, a costly revamping of the state’s juvenile delinquency facilities and major improvements in the state’s parole and prison programs.

All of these reasons lie behind Miller’s call for tax action now. Without an infusion of transportation dollars immediately, Secretary John Porcari can do little to persuade Marylanders the administration is jump-starting road and transit projects. Without dollars from slots in next year’s budget, some of the governor’s initiatives may be delayed.

Miller insists slots be part of the equation. He sees one-armed bandits as an easy step that avoids $500 million or more in tax increases. It’s a way to convince voters lawmakers did everything they could to minimize the size of the coming tax package.

The Senate president wants to prevent a nightmarish 2008 session in which the state’s structural deficit is so gigantic lawmakers are forced to take breathtaking action.

This could include a broadening of the sales tax to services; a 1-cent or 2-cent sales tax increase; a higher income tax levy; a higher corporate income tax; a tax on energy consumption, and a nickel or dime increase in the gas tax along with an automatic inflation factor that tacks on a few more cents per gallon when gas prices soar.

That could set the stage for a remarkable Republican resurgence in 2010. It was a tax revolt that nearly made Republican underdog Ellen Sauerbrey governor in 1994. It was a tax revolt that made Republican Theodore R. McKeldin governor over incumbent ‘‘Pres” Lane in 1950.

Even though O’Malley and Democrats rolled up big numbers against Republicans last year, that could quickly be forgotten if Maryland becomes fertile ground for a taxpayer revolt.

So Miller’s ideas aren’t so hare-brained after all. He feels strongly there will be less pain for voters if tax increases commence now rather than later (when they will have to be higher). He also feels most voters support an alternative revenue source — slots — if it means a much smaller tax package.

O’Malley says he’ll face tax questions next year. House Speaker Mike Busch agrees (except for raising the cigarette tax to expand health insurance for the poor). But time could be Miller’s best ally. The state’s financial predicament could continue to deteriorate. In the end, the governor may not be able to wait till next year. If he does, the budget hole could be far deeper and the political peril far more serious.

Barry Rascovar is a communications consultant. His Wednesday morning commentaries can be heard on WYPR, 88.1 FM.