Maryland Public Policy Institute RSS

Regressive Taxation

John J. Walters — Tue, 7 Feb 2012

You would be hard pressed to find someone who disagrees with the common wisdom that progressive taxation is the way to go. I guess we just consider it to be the fairest way to evenly distribute the necessary evil that is taxation. After all: why should someone below the poverty line pay the same taxes as someone above it? Obviously, that money means a lot more to the poor person than it does to the rich person.

Tax and Spend

Marc Kilmer — Mon, 6 Feb 2012

With the release of Governor O’Malley’s budget proposal, Maryland taxpayers had better grab tight hold of their wallets. As the Washington Post puts it, “his ambition for a second major package of tax increases since 2007 risks reinforcing a tax-and-spend stereotype of the governor.” There’s no risk there – the stereotype of Governor O’Malley as a tax-and-spend governor is true. During his tenure, both spending from the General Fund (the money paid by Marylanders in taxes) and total spending (including taxes, fees, federal funds, and other revenue sources) has increased.

A Better Way for the FDA

Marc Kilmer — Fri, 3 Feb 2012

It’s not often that I praise Sen. Barbara Mikulski (although anyone her height who tries to fight off a mugger can’t be all that bad), but today I’ll give her some not-overly-enthusiastic praise for her efforts to speed up the drug approval process of the Food and Drug Administration (FDA). While Mikulski deserves to be lauded for recognizing the problem, there are better ways to fix the FDA than her solution -- throwing more money at it.

We need to put the brakes on the O’Malley gas tax

Christopher B. Summers — Fri, 3 Feb 2012

There’s a coordinated push by Gov. Martin O’Malley to raise Maryland’s gasoline tax by applying the state’s sales tax of 6 percent to fuel purchases.

That means that, at current gas prices, the state tax would rise from 23.5 cents per gallon to 44.5 cents - an increase of 89 percent. This would make Maryland’s gas tax the ninth-highest in the nation.

Moving Money Around

John J. Walters — Thu, 2 Feb 2012

Inspiration for this morning’s blog post comes from the “Myth vs. Fact on the Gas Tax Increase” posting that we released earlier this week. If you haven’t seen it yet, please take a minute or two and go check it out. It includes some surprising statistics, my “favorite” being that “in the past three years, Maryland has diverted $1 billion from the Transportation Trust Fund to pay for other projects.” Doesn’t sound like a very trustworthy fund if you ask me!

Report: O’Malley gas tax hike hits poorest the hardest

Jay Hancock, the Baltimore Sun — Thu, 2 Feb 2012

Jay Hancock gives our recently-released Policy Report on the proposed gas tax increase a plug on his blog.

Free the Midwives

Marc Kilmer — Wed, 1 Feb 2012

Want to have your kid born in your living room or kitchen? If you do, the state of Maryland makes it fairly difficult for you to employ the services of a midwife to help you. There’s an effort afoot to relax the state’s restrictions on midwives so it’s easier for Marylanders to give birth at home. I say, let’s free the Maryland midwives!

Rethinking Maryland’s Proposed Gas Tax Increase

Wendell Cox,Ronald D. Utt — Wed, 1 Feb 2012

In late 2011 the Blue Ribbon Commission on Maryland Transportation Funding issued its report, and recommended that the state fuel tax be increased by a total of 15 cents per gallon in three years’ time, and indexed for inflation thereafter; that registration fees be increased 50 percent; and that the titling tax be increased to 6.5 percent. All of these changes are estimated to bring in an additional $810 million per year when fully implemented. In turn, these additional funds are proposed to be spent on transportation projects in the state.

O’Malley proposes more taxes for more jobs

Nicholas Sohr, the Daily Record — Wed, 1 Feb 2012

Gov. Martin O’Malley called for tax hikes Wednesday in his State of the State address, urging lawmakers to weigh those “tough choices, the costs and the trade-offs” against the jobs he hopes to support through increased spending on infrastructure.

Rethinking Maryland’s Proposed Gas Tax Increase on InsiderOnline

Wed, 1 Feb 2012

Increasing the gas tax and other motorist-related fees should be the last-resort policy option that the Maryland legislature should consider. Absent any meaningful reforms to the system, or the application of innovative policies proven in other states, an increase in taxes will simply waste more money on existing spending options that have failed to address worsening congestion. The burden of the increase in the fuel tax will also fall disproportionately more on moderate to lower-income households.

Transportation Policy Experts Blast O’Malley Gas Tax Plan

Wed, 1 Feb 2012

ROCKVILLE, MD -- Late last year, the Blue Ribbon Commission on Maryland Transportation Funding issued its report, in which it recommended that the state fuel tax be increased by a total of 15 cents per gallon in three years’ time, and indexed for inflation thereafter. Since the report’s release, that plan has been endorsed by business and political leaders in Maryland, including Gov. Martin O’Malley. Supporters claim that the increase in transportation spending will create jobs, relieve congestion, and improve the quality of the state’s infrastructure.

Is O’Malley’s Pension-Sharing Plan a Bad Idea?

Thomas A. Firey — Tue, 31 Jan 2012

In a recent editorial that was generally critical of Gov. Martin O’Malley’s FY 2013 budget plan, the Washington Post lauded one proposal: requiring local school systems to pick up half the cost of their teachers’ pensions and other retirement benefits. Calling the proposal “courageous,” WaPo explained:

No Basis to Claim Alcohol Tax is a Success

Marc Kilmer — Mon, 30 Jan 2012

My buddy Vinny DeMarco is at it again. He recently held a rally claiming that the alcohol tax he pushed for last year was a huge success. The press, from every report I’ve seen, gave him ample coverage with nary a hard question or even quizzical look (OK, I’m making up the quizzical look thing, but it stands to reason). That’s unfortunate, because from what I can tell, the whole rally was pretty much based on one whopper after another.

Transportation Policy In Maryland

Wendell Cox — Mon, 30 Jan 2012

This paper examines highway and transit policy in Maryland based upon the proposition that its principal purpose should be to maximize economic growth, which would also minimize poverty. Such a focus would improve the state’s competitiveness by the most effective use of public expenditures.

Myth versus Fact on the Gas Tax Increase

Mon, 30 Jan 2012

MYTH: The money raised through the higher gas tax would only be used for transportation projects.

FACT: As Delegate Herb McMillan wrote in The Baltimore Sun, in the past three years, Maryland has diverted $1 billion from the Transportation Trust Fund to pay for other projects. Absent a constitutional ban on doing so, ongoing deficits make it likely legislators will be tempted to take more money from the Transportation Trust Fund in the future.

MYTH: A higher gas tax will improve the state economy by creating more jobs.

FACT: The higher gas tax would remove $491 million per year from the Maryland economy. Combined with other proposed transportation fees and taxes, $810 million would be removed. As such, whatever jobs would be created through higher spending would be offset by the $810 million lost in other spending.

Also, higher gas taxes disproportionately hurt the poor and those with lower incomes as they spend a higher percentage of their income on transportation than other people.

MYTH: Money from the Transportation Trust Fund would only be used to reduce road congestion and increase mobility on roads.

FACT: This Fiscal Year the Maryland Department of Transportation will spend 54 percent of total highway and transportation money on transit projects. Over the past five years, 50 percent of transportation spending has been focused on transit. In 2009, 48 percent of transportation funding went to transit - 20 times the statewide transit share of 4 percent of passenger movement. At 55 percent, the imbalance would reach 25 times.

MYTH: Transit could be the easiest way to reach work for all commuters.

FACT: There is virtually no potential for transit to carry a material share of travel to the 80 or 90 percent of the jobs outside major metropolitan areas since the concentration of destinations needed to compete with cars exists nowhere else.

MYTH: More people ride transit than ever before.

FACT: Even with a big increase in MARC train service and the addition of light rail in Baltimore, about the same share of Marylanders get to work by transit today as in 1980.

MYTH: Transit is convenient.

FACT: The average transit trip is much longer than one by car. In the Baltimore metropolitan area, the average one-way transit commute is 53 minutes, while the average car commute is 28 minutes. In the Washington metropolitan area, the average one-way transit commute is 47 minutes, while the average car commute is 32 minutes.

Of note, the Brookings Institution found that, on average, fewer than 10 percent of jobs in Washington and Baltimore can be reached by transit within 45 minutes.

O’Malley’s gas tax proposal could face rough going in General Assembly

C. Benjamin Ford, Staff Writer — Mon, 30 Jan 2012

With gas prices projected to hit $4 per gallon this summer, Gov. Martin O’Malley’s proposed gas tax increase might be tough to sell to the state, said a spokeswoman for a group that has supported an increase in the past.

The Politics of Blame Avoidance

Gabriel J. Michael — Fri, 27 Jan 2012

In 1986, political scientist R. Kent Weaver published a famous article entitled “The Politics of Blame Avoidance.” In it, he argued that politicians are more likely to seek to avoid blame for unpopular decisions than to claim credit for popular ones. If the debate over the cost shifting of teacher pensions in Maryland is any indication, Weaver was spot on: all the parties involved are pointing fingers at one another.

Two for the Price of One!

John J. Walters — Thu, 26 Jan 2012

In case you didn’t know that the government is into extreme water sports like white water rafting and water skiing, I feel it is my duty to inform you of the $1.5 million that the government borrowed in 2006 to “serve as a grant to the Board of Directors of Adventure Sports Center, Inc.” When you go into to debt to fund a hobby, that shows some serious dedication.

Just So We’re Clear

Marc Kilmer — Wed, 25 Jan 2012

Governor O’Malley has released his budget proposal. Given the strong executive model of government we have in Maryland, the governor’s budget is probably pretty close to what the General Assembly will approve. What’s in his budget proposal? Looking at the documents on the Department of Management and Budget, it’s difficult to say. What the state of Maryland spends is the most important issue the General Assembly tackles every year. We’d all benefit from less complicated, more transparent budget documents from the governor.

Show me the numbers

Marta Hummel Mossburg — Wed, 25 Jan 2012

For hours last Wednesday Gov. Martin O’Malley didn’t tell residents the price of the state budget he had just released.