Problem is the state has a structural budget deficit..a lot having to do with educational laws and commitments. So unless the economy is rocking, every year your writing a budget that is starting in the red.
A lot of the issue goes back to Paris Glendening and the democratic state legislature who passed the "Thronton Plan". The plan was designed to infuse cash ($1-2 Billion) into poor schools, a good chunk of which are obviously in Baltimore City where O'Malley was the mayor. The problem with the Thornon Plan was that there was no source of funding. Erhlich came to office and supported the plan, but only if it was funded with savings or new income. He wanted to fund it using revenue from legal slots and pushed for several years for that. However since the legeslature would not pass slots, Erhlich in turn never funded the Thronton plan. In Maryland, the legislature add items to a governors budget, they can only remove them. So if Erhlich did not include the funding, the legislature could not add it.
At the end of the day, Erhlich made the state budget work by not funding Thronton, and raising fees, some college costs and tolls. I have no issue with this, because people who use the service pay for it. Is it fair for someone who lives in Southern Maryland and may never use the Harbor Tunnel to pay higher taxes to maintain it?
Either way, when O'Malley was elected, he had a $2 Billion surplus. His first order of business was to fund the Thornton plan, which combined with the bad economy threw us into a $1 billion plus defict pretty much overnight. To make that work, rather than cut spending, he raised income and sales tax as much as he figured the state would bear. This included a millionaires tax which has pretty much backfired. Since it was enacted, the number of tax returns filed by millionaires has signifigantly dropped in Maryland as they either leave the state, or get taken under by the economy.
The tax increases were not enough however, as new spending, and the increasingly worse economy are still creating massive deficts. The slots plan that was passed is smaller, has high taxes, which make the less attractive for operators, and has been slow to roll out. Maryland has basically gotten through to this point the last few years with stimulus money.
I have no reason to believe that if relected, O'Malley, as a term limited governor, would not jack up every tax he can get his hands on to balance the budget. It is easier to tax people who have money than to make cuts to pet programs, or gasp education spending in an area where it may not be working. The state legislature obviously has never met a tax it did not like, so having a governor with the same plan is a perfect storm.