Howard County Maryland Blog

Local Politics and Current Events

Laying the Groundwork for Tax Increases, Part 2.

Posted by Ed C on Wednesday, December 20, 2006

From the Baltimore Sun, Spending plan tops revenue

Despite projections of a looming fiscal crisis, a bipartisan committee of legislators recommended one of the largest state government spending increases of the past decade Tuesday, saying the money is needed to pay for a landmark education funding program.

The Spending Affordability Committee’s mission is to suggest limits on increases to the state budget to prevent it from outpacing growth in the economy. But lawmakers conceded Tuesday that the 7.9 percent increase they authorized for the fiscal year that begins in July is unsustainable over the long run, given that personal income growth in the state is expected to be about 5 percent or less in the foreseeable future.

Okay, we have a “looming” spending crisis. So, let’s increase spending this year by more than we have in the last decade. Apologies to Guinness, but Brilliant.

Leaving the name aside, maybe the problem is with the Spending Affordability Committee’s mission – to suggest limits on increases to the state budget. Any thoughts on freezing or even cutting spending? 29 Billion dollars and climbing – all spent in the most efficient way possible?

The recommendation comes at a time when legislative leaders are calling for an overhaul of the state’s tax structure to make the system more reflective of the modern Maryland economy. Over the next several years, lawmakers will likely consider increases in some taxes and cuts to others — with an overall rise in how much citizens and businesses pay for government.

overall rise in how much citizens and businesses pay for government – That is tax increases. So, how do we sell this this?

Barbara A. Hoffman, the former chairman of the Senate Budget and Taxation Committee, said projections of fiscal crisis are nothing new for the state government and may be useful to force a long overdue re-thinking of the tax structure. Avoiding a significant slow-down in spending growth this year may help create the pressure for lawmakers to make changes that have failed in the past, such as making the income tax more progressive.

“This is it,” she said. “This is the last year before some kind of reckoning happens, and in a way, it’s giving O’Malley a year to get his feet wet.”

Senate President Thomas V. Mike Miller said the 7.9 percent growth rate is necessary to give O’Malley temporary flexibility to meet his campaign promises. But he said O’Malley shouldn’t delay in seeking changes to the tax structure because they will likely be difficult to achieve politically and may take time to pass the legislature.

Avoiding a significant slow-down in spending growth? Sure, spend more this year to make the problem bigger.

Useful to force a re-thinking of the tax structure? Keep spending more until we have such a problem that the citizens will be begging us to raise their taxes. We’ve tried to raise taxes in the past, but that was just unpopular. But, now that we have a golden opportunity to make a CRISIS and then will be no choice. Taxes raised – problem solved.

Sure when the time comes they will try to make a good show of it. There will be plenty of hand-wringing and proposals to make cuts, but the proposed cuts will be from popular programs like Education and Public Safety, things that everyone generally supports. You want little Emily and Jacob to get a good education don’t you? And of course you want police and firefighters. So, the only choice left is magically to raise taxes.

The Democrats* believe that they will not get blamed for manufacturing the crisis and gosh darn it, they just had no choice but to raise taxes. – Brilliant.

*Why should the Democrats get the credit for this? I mean the article said it is a bipartisan committee after all.

Who is on the Spending Affordability Committee?

Edward J. Kasemeyer, Senate Chair – Democrat
Michael R. Gordon, House Chair – Democrat

Appointed by Senate President:
Ulysses Currie – Democrat
James E. DeGrange, Sr. – Democrat
Patrick J. Hogan – Democrat
Thomas M. Middleton – Democrat
Ida G. Ruben – Democrat
J. Lowell Stoltzfus – Republican

Ex officio Senate members: Thomas V. Mike Miller, Jr. (Democrat), Senate President; Nathaniel J. McFadden (Democrat), Majority Leader; Donald F. Munson (Republican), designee of Minority Leader.

Appointed by House Speaker:
Talmadge Branch – Democrat
Norman H. Conway – Democrat
Adelaide C. Eckardt – Republican
Anne Healey – Democrat
Sheila E. Hixson – Democrat
Adrienne A. Jones – Democrat

Ex officio House members: Michael E. Busch (Democrat), House Speaker; Kumar P. Barve (Democrat), Majority Leader; George C. Edwards (Republican), Minority Leader.

Okay, I need to take a slipper off for this but we have 14 regular members of the committee. 12 Democrats and 2 Republicans. Two out of fourteen – 14.3%; Yep, that’s bipartisan all right.

…give O’Malley temporary flexibility to meet his campaign promises? Funny, I don’t remember the pledge to raise taxes, but it sure seems like that is one promise the Gov. O’Malley will be sure to keep.

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One Response to “Laying the Groundwork for Tax Increases, Part 2.”

  1. hocoterp said

    It’s not mentioned in the post, but I’ve seen the phrase “making the income tax more progressive” used a couple times. A progressive income tax being one where people earning higher incomes are taxed at a higher rate. There are two ways to make the income tax more progressive: 1) reduce the tax rate for people earning less money, or 2) increase the tax rate for people earning more money. Given the rate at which the Democratic-controlled Spending Affordability Committee is allowing spending to increase and the looming budget crisis, I don’t see room for many tax cuts. So if they want to make the income tax more progressive, the only option they have left is to raise taxes for those earning over the median income. If the Dems stay true to their word and make the income tax more progressive, the only questions left are how much will taxes be raised and what income brackets are affected.

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