LOGIN NOT A MEMBER? REGISTER

FOR PRESS CONTACT US  SUPPORT

The Maryland Public Policy Institute

• RESEARCH
• Criminal Justice
• Economic & Fiscal Policy
• Education
• Environment
• Gas Tax
• Government Transparency
• Health Care
• Transportation
• Welfare
• EXPERTS
• EVENTS
• MPPI PRESS
• ABOUT US
• POLICY BLOG

Blame-game politics

Originally published in the Frederick News-Post

Economic & Fiscal Policy, Government Transparency

by Marta Hummel Mossburg

OP-EDS

Gov. Martin O'Malley's latest campaign commercial attacking his Republican opponent Robert Ehrlich for raising taxes and fees is everything his leadership is not: clear, concise and jargon-free.

It's the kind of ad Chris Christie, New Jersey's straight-talking Republican governor, could run.

In it the man who waxes poetic about his spiritual quest to create "one Maryland" in every speech uses "real people" to make fun of Robert Ehrlich for saying "there is a big difference between fees and taxes." Technically there is, as fees allegedly pay for a specific government service, such as tolls paying for road repair. But as one woman in the ad says, "If it comes out of my pocket, it's a tax."

The irony, however, is that Ehrlich could basically run the same ad by swapping out a clip of himself with that of O'Malley. The same governor whose ad criticizes the former governor for raising fees called a special session of the legislature in 2007 to pass massive tax increases that were supposed to balance the budget forever. He is also the one who claims accepting billions in federal bailout dollars is the same thing as cutting the budget.

As we know now, higher sales, corporate income and other taxes would only plug a temporary hole, and the next session will either require tax and fee increases or large cuts to services to cover projected $1.5 billion deficits in coming years.

But the real issue for both candidates should not be who can best blame the other for the state's issues. Both are responsible for the state's budget problems by shifting money from dedicated funds to pay for operating expenses and increasing debt.

The focus of each candidate should be crafting a plan to realign state spending with revenue. As Matthew Mitchell of the Mercatus Center at George Mason University shows in an alarming graphic, state spending across the country has outpaced private-sector spending for decades (http://mercatus.org/publication/state-and-local-vs-private-sector-spending). Nationally, state and local spending has increased nearly 10 times from 1950; private-sector spending has increased nearly five times during that same time period.

Maryland is no different. From 1997 to 2007, the most recent year for which figures are available from the Bureau of Economic Analysis, state and local spending in Maryland has grown 84 percent while private-sector spending has grown 73 percent.

This divergence, not the recession, is the reason the state cannot pay its bills without the help of the federal government and higher taxes, and why it faces ongoing "structural deficits" -- the difference between what the state spends and what it collects in taxes.

As history shows, raising taxes only solves the budget problem temporarily. And O'Malley gimmicks, including tax credits for jobs created and health care subsidies for small businesses, have not hastened the recovery and tax revenue.

Maryland needs a structural fix to increase revenue permanently. A law making it illegal for the governor and legislators to steal money from dedicated funds to balance the budget is an important first step. Making Maryland's tax rates competitive with surrounding states must be another key reform to winning business and increasing the population.

Attacking each other over past misdeeds may make for good television, but Maryland needs good governance to start growing again. When are the ads showing those plans going to run?

Marta Mossburg is a senior fellow at the Maryland Public Policy Institute. Contact her at mmossburg@mdpolicy.org.