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The Choice Ahead

Originally Published in the Frederick News-Post

Economic & Fiscal Policy

by Marta Hummel Mossburg

OP-EDS

Maryland is a state used to taking other people's money. It is a way of life here because of its proximity to Washington and the presence of so many federal agencies and contractors.

Winning an oversize share of federal tax receipts has worked for a long time because the rest of the country was making a lot of money and didn't pay attention to its bills. Besides, what happened in Washington didn't really seem to impact them. Until now.

The federal debt crisis has changed everything. Even if our elected officials resolve their differences on the debt ceiling, it's obvious that the federal government needs to spend less and generate more money, putting Maryland's most favored status in limbo.

The situation should awaken to reality Maryland legislators, who are seeing firsthand the impact of unsustainable spending and who may be forced by a potential credit downgrade to scale back school and road building because of increased borrowing costs.

Like federal legislators, they must acknowledge that more people working and making money is the only viable solution to budget problems. Higher taxes being discussed for the October special session may fix the budget for a year but will not eliminate long-term deficits in the same way previous tax hikes only delayed problems.

Republican Presidential candidate Michele Bachmann had it right when she said last week, "Part of the problem is today, only 53 percent pay any federal income tax at all; 47 percent pay nothing. ... We need to broaden the base so that everybody pays something, even if it's a dollar."

As recent job statistics show, Maryland is moving in the wrong direction in that regard. For the past two months the state has been the worst or almost worst at creating jobs among the 50 states and has lost about 15,000 positions in the past year.

If people are not working, they do not pay taxes. That is a fact President Bill Clinton understood well. By championing welfare reform he turned thousands of people in each state from recipients of aid into contributors to the system.

Only policies that seek to maximize taxpayers will make the U.S. and Maryland thrive. Playing class warfare games as both President Barack Obama and Gov. Martin O'Malley are fond of doing may rally voters but make those who create jobs wary of hiring.

As Las Vegas businessman Steve Wynn, a Democrat and CEO of Wynn Resorts, said last week, "This administration is the greatest wet blanket to business, and progress and job creation in my lifetime." No influential business owner in Maryland has been so blunt with his or her criticism, but the ever-shrinking number of millionaires in the state and steady loss of people to lower-taxed places speaks for itself.

Maryland will suffer as a result of a smaller federal government. The only question is whether state legislators will allow the state to find a new identity as a magnet for business -- or cling tighter to Washington and manage decline.