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First Priorities First

Originally Published in the Frederick News-Post

Economic & Fiscal Policy, Education

by Marta Hummel Mossburg

OP-EDS

The 2011 legislative session has not started, and already some members want to focus on things that should be at the bottom of state priorities.

For example, Sen.-elect Victor Ramirez, D-Prince George's, plans to introduce legislation to offer in-state college tuition benefits to illegal immigrants who have attended state high schools.

Let's leave heated arguments for and against liberalizing immigration aside for a moment and just look at numbers.

The Pew Hispanic Center estimates 250,000 illegal immigrants live in Maryland. Based on a 2004 Urban Institute study, the proportion of children in that group is about 42,500. The proportion who graduate from Maryland high schools each year is a tiny fraction of that and those who go on to attend college even smaller.

Making the matter even less urgent is the fact that the number of illegal immigrants in the United States dropped by about 8 percent from 2007 to 2009 as job opportunities evaporated.

So the question really should be: At a time when the state faces a $1.6 billion budget shortfall and regularly shortchanges payments for state employee pensions, why are legislators wasting precious time arguing about subsidizing a tiny fraction of the population?

Two Marylands

Taxing our way to prosperity does not work.

Over the past decade the gap between rich and poor has grown in Maryland, despite massive tax increases in 2007 that raised sales, income and other taxes. According to a new report from two groups that regularly support higher taxes, poverty has also risen over the last decade, from 7.4 percent in 2000 to 9.1 percent in 2009.

But those figures have not stopped the same groups from proposing higher taxes on millionaires, corporations, gasoline and liquor and extending the sales tax to a wide variety of services to "promote a broadly shared recovery."

They would also like to raise Maryland's minimum wage to $10.

According to December's "The State of Working Maryland," from the Progressive Maryland Education Fund and the Maryland Budget and Tax Policy Institute, "Raising the state minimum wage would not only ensure that Marylanders can escape poverty through work, it would also boost the economy by bolstering the purchasing power of lower-paid workers at a time when weak consumer spending is the biggest factor in the current anemic recovery."

The problem with that logic is that unemployment is highest for those with minimal skills. Making it harder for businesses to hire those low-skilled workers will decrease employment, not increase it.

The City of Baltimore, a haven for many low-skilled workers and home to some of the highest unemployment in the state, passed its first living wage law in 1994. Since then the city has lost about 100,000 people. From 2002 to 2007, the most recent statistics, the city has lost about 50,000 jobs. A variety of factors have contributed to those losses, but raising the minimum wage can hardly be cited as an effective way to raise employment and wages.

If legislators want to increase wealth in the state they need to create an environment where businesses can and want to hire people. Returning to Maryland's 2006 tax rates would be a good start. Redistributing wealth has increased poverty and widened the gap between rich and poor in the past decade, so why will more of it make Marylanders richer?