Ehrlich said "fiscal responsibility, education, health, and the environment, public safety, and commerce" were the "Five Pillars" of his administration. He opposed sales and
income tax increases and supported legalization of
slot machines to raise revenue. Under Ehrlich's tenure, Maryland stayed 0.5% or more below the national unemployment average. The unemployment rate dropped significantly from 4.5% in 2003 to 3.9% in 2006, with an increase of 98,000 private sector jobs, aided by its proximity to the strong labor market associated with the national capital. Ehrlich established a Department of Disabilities within his cabinet for people with disabilities – the first such cabinet-level agency in the nation. In 2004, Ehrlich signed the Chesapeake Bay Restoration Act: it funds upgrades of water treatment plants to reduce pollution discharge by a surcharge on business and residential water and septic bills. The resulting reduction in pollution into the bay was expected to meet approximately one-third of Maryland's obligations under the 2000 Chesapeake Bay Agreement. The Chesapeake Bay Foundation described the Chesapeake Bay Restoration Act as the most significant piece of legislation for the Bay in a generation. Ehrlich opposed President
George W. Bush's 2006 approval for a
United Arab Emirates firm to take control of six U.S. port operations, including those at the
Port of Baltimore. (See
Dubai Ports World controversy). In 2006, Ehrlich signed a law banning police traffic ticket quotas.
Veto of the "Wal-Mart" Health Care Bill In January 2006, Ehrlich vetoed the "Fair Share Health Care Bill," also known as the
Walmart Bill, which required businesses with more than 10,000 employees in the state (three of the four companies being Walmart,
Northrop Grumman, and
Giant) to either spend eight percent of payroll on employee health care, or pay that amount to a state health program for the uninsured. On July 7, 2006, the Maryland law was overturned in federal court by U.S. District Judge Frederick Motz, who ruled that the law violated the
Employee Retirement Income Security Act (ERISA) of 1974, while also noting that it would "hurt Wal-Mart by imposing the administrative burden of tracking benefits in Maryland differently than in other states."
2006 gubernatorial election Governor Ehrlich opted to seek a second term and did not face opposition in the Republican primary. On November 7, 2006, Ehrlich was defeated for re-election in the
2006 gubernatorial election by Baltimore Mayor
Martin O'Malley, who won 53% to Ehrlich's 46%. Ehrlich's term as governor expired at noon on January 17, 2007.
Between elections A month after he left public office, Ehrlich and several aides from his administration opened a Baltimore-area office of North Carolina law firm
Womble Carlyle Sandridge & Rice. His wife Kendel took a consulting job as a director of the BankAnnapolis. In March 2007, Ehrlich endorsed former New York Mayor
Rudy Giuliani for the US presidency. He was the Chairman of Giuliani's Mid-Atlantic Campaign Committee. Ehrlich and his wife hosted their own radio show on
WBAL-AM Radio every Saturday from 2007 to 2010. Governor Ehrlich has guest lectured at Towson University in Professor
Richard Vatz's political persuasion class twice a year since 1993. ==2010 gubernatorial campaign==