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

Tax talk likely to dominate session

Originally Published on Gazette.Net

Economic & Fiscal Policy

by Sarah Breitenbach, Staff Writer

MPPI IN THE NEWS

While the Maryland legislature will be faced with weighty nonrevenue issues like gay marriage and legislative redistricting in 2012, the overriding theme could be the search for new money to close budget gaps.

Talk of taxes and fees dominated the meetings of two state-mandated commissions this week.

The Blue Ribbon Commission on Maryland Transportation Funding recommended the legislature hike the state’s 23.5-cent-per-gallon gas tax by 15 cents to fund transportation projects. The other commission, which is tasked with making recommendations on the state’s wastewater systems, heard testimony that the cost of Maryland’s water-and-sewer restoration fee needs to double or possibly triple to adequately clean the Chesapeake Bay. The current annual rate is $30.

Those ideas, which might surface in Annapolis come January, along with a $1 increase in the cigarette tax proposed by health care advocates, could dictate the focus of the General Assembly, as lawmakers work to close a more than $1 billion shortfall, some observers says.

“I think it’s going to dominate probably about 90 percent of (the session), only because there again the economy is not turning around as fast as (the state deficit),” said Christopher Summers, founder and president of the conservative Maryland Public Policy Institute.

Raising taxes isn’t a necessarily a bad idea, said Neil Bergsman, director of the Maryland Budget and Tax Policy Institute, a nonpartisan research organization.

However, raising taxes for dedicated revenue streams, like for the Bay and transportation, ignores the dire needs of programs supported by the state’s general fund, he said.

“My concern is that we have compelling, well-documented needs in education, public safety, health care (and) child care,” Bergsman said. “I want the governor and the legislature to take a comprehensive view and address all of the state’s needs, not just pick one or two popular poster children that happen to have dedicated revenues.”

Taxes to support dedicated revenue streams are generally easier to swallow, Bergsman added.

“I do think the governor and the presiding officers need to exercise some leadership and remind their members and the public about what our general taxes go for,” he said.

Todd Eberly, a political science professor at St. Mary’s College of Maryland, said it would not be surprising if legislators get behind several tax increases this year.

“In many ways it’s sort of the perfect timing to take it up and hope that by the time you face the voters, they’ve sort of forgotten about it or they’ve just gotten used to all the new taxes,” Eberly said.

The 2012 session is likely the only time sitting lawmakers will be eager to pass tax increases, he said.

Keeping tax talk at a distance from the 2014 election in which all 188 members of the legislature will be up for re-election should keep lawmakers relatively safe from voter blowback, Eberly said.

Lawmakers demonstrated the importance of keeping the distance between taxes and elections when they raised the sales tax by 1 percent during the 2007 special session.

“That proved not to be an issue when he (Gov. Martin O’Malley) was running for re-election,” Eberly said. “It really does matter if you do this the year before an election versus three years before an election.” O’Malley was re-elected in 2010.

While he is term-limited from running again, tax issues could propel the next gubernatorial election, Eberly said.

“I suspect where you’re going to see it play out is in the gubernatorial election on the Democratic primary side,” Eberly said. “(Comptroller) Peter (V.R) Franchot has already staked his claim on the thing that this isn’t the time to raise taxes. That could certainly work to his advantage.”

Republican lawmakers, who largely oppose any kind of tax increases, have the burden of drumming up a counterproposal that would find savings, Eberly said.

“The party has sort of lost sight of (the fact) that they need to have a good repository of ideas and proposals, and they also really need beefing up their bench of credible candidates to challenge people,” he said.

Maryland Republicans have not publicly offered specific alternatives to tax increases expected to be proposed in 2012.

Sen. Christopher B. Shank (R-Dist. 2) of Hagerstown, said Democrats ignore the implications of tax increases on the poor and middle class.

“I think if the public were to register their objections loud enough, perhaps folks would get the message of this,” Shank said. “I’ve often wondered what it would take to create a grassroots public backlash against the majority party’s policies.”