Maryland Governor O'Malley calls Special Session

October 15, 2007

Dear George,

This afternoon, we announced that we will be calling the Maryland General Assembly in for a special session on October 29th to solve the $1.7 billion budget deficit we've inherited. [listen to audio mp3]

We need to act now. If we wait until the next regular legislative session - as some have suggested - the problem will grow by nearly $600 million, requiring additional tax increase or deep cuts in areas like education, which accounts for nearly half of our budget.

This is a day that has been 10 years in the making. Over the last decade, our state government reduced revenue by $1 billion with an income tax cut, and then increased spending by $1.5 billion with the Thornton education plan - opening up a $1.7 billion hole.During those years, the General Assembly had dozens of hearings on the tax reforms and other measures we're proposing.

Elected leaders could not reach consensus on issues like slots. And the state avoided the day of reckoning with deficit spending funded by raiding open space and transportation funds. Last year, the people of our state voted for change. And it's time to take responsibility by passing a consensus budget plan and solving the problem. We cannot afford to make the problem $600 million worse.

For the past month, we have talked with the people of our state and their representatives about our 10-pt plan - to increase tax fairness, restore fiscal responsibility and invest in our shared future.

Again, here's what we've proposed:

1. Reform the income tax to make it more progressive and fair.
2. Reduce property taxes.
3. Close corporate loopholes.
4. Invest in Maryland by raising the corporate income tax 1%, and splitting it between higher education and transportation.
5. Protect education by making the Thornton law sustainable.
6. Make healthcare more affordable and reduce smoking by increasing the tobacco tax $1 to invest in reform.
7. Help seniors by doubling the senior income tax exemption - and create a new sales tax rebate.
8. Modernize the sales tax - so it's still in line with surrounding states.
9. Recapture slots revenue, once and for all.
10. And do it now, in a special session, or we'll add $600 million to our $1.7 billion problem, endangering our investment in education.

The time for delay has passed. It's time to step up and deliver on a fair, long-term budget solution that protects middle-class families, education and public safety. Our plan starts with $280 million spending cuts, eliminates 147 government positions - and reduces spending growth by $1 billion over the next 2 years. And most families will pay less in taxes, as we keep Maryland competitive.

Thank you for working to move Maryland forward.

Sincerely,

Martin O'Malley
Governor