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Two Marylands

Originally Published in the Frederick News-Post

Economic & Fiscal Policy

by Marta Hummel Mossburg

OP-EDS

Maryland is like an alcoholic in denial that she has a problem.

But new Census data show she cannot hide her addiction to overspending and taxes as a panacea for everything much longer. The poverty rate hit 10.8 percent in the state in 2010, the highest level in two decades.

The national rate is still higher, 15.1 percent, but Maryland's relative strength can neither mask the fact that almost 80,000 new people fell within the poverty threshold from 2009 to 2010 in the state, nor that the federal government is spending $1 billion this year feeding Marylanders, up $650 million since 2007.

This happened despite a state government devoted to creating "one" Maryland through policies that redistribute wealth from richer to poorer and in the wealthiest state in the union.

One of the means to achieve this goal was the millionaire's tax, passed in 2007. It was supposed to add millions to the state treasury but ended up driving many wealthy to Florida, North Carolina and other lower-taxed places. Thankfully it expired and has not been renewed. The state legislature also passed permanently higher corporate taxes and raised the sales tax 20 percent with the blessing of Gov. Martin O'Malley, only to see more people and wealth leave the state. The Tax Foundation estimates Maryland loses $5.6 billion each year due to outmigration from the state -- the 43rd worst performance in the country.

Poverty is not the only problem in Maryland. Under O'Malley, Maryland is one of the worst states at creating jobs since the recession and also holds the distinction of holding a top 10 spot for its share of people underwater on their mortgages.

Also under O'Malley, income inequality has continued to grow. This has been going on since the 1980s despite decades of Democratic leadership (with one short hiatus) that espoused similar goals to O'Malley.

The issue is not just that those in the top bracket are making more money while those on the bottom have seen their incomes stagnate, but that the number of high-paying jobs keeps shrinking in Maryland while the number of low-paying jobs is growing.

This is the opposite effect intended by those in power in this one-party state. And the trends started happening way before President George W. Bush took office, so no one can blame him for the state's problems.

So where does this leave us? At the very least it is time those in power started to ask themselves why their policies are failing to increase wealth and jobs in Maryland. This question should precede any talk of raising taxes during the upcoming special session because if redistributionist policies make the state poorer, new ones should not be considered.

Relying on the federal government for growth has exacerbated the wealth gap in the state and allowed those in power to dismiss business as an important contributor to the state's well-being. Unless Maryland wants to add more people to its poverty rolls and drive more wealth to other places, it needs to rethink its priorities. Fast.