Sunday, December 10, 2006

Assembly Issue Watch: Busting Up the Budget

This will be the first in a series of posts about the issues that the General Assembly will begin grappling with when they get together on January 10.

I figured we'd start with what is perhaps the most important issue of all, the issue that will likely overshadow much of Governor O'Malley's young administration: the looming budget shortfall. If you need a step-by-step explanation of it from people who actually know what they're talking about, take a look at this slideshow put together by the Maryland Budget and Tax Policy Institute. Put simply, projected spending will outpace projected revenue by hundreds of millions of dollars over the next few years, partially because of new federal regulations about payments into employee retirement plans. The Governor and the Assembly will either have to increase taxes and fees or cut spending. And then there's the matter of campaign promises - including full funding of the Thornton recommondations and increase in school construction spending. These could add huge amounts of money to the shortfall, making it even harder to close the gap.

As a teacher, I loved hearing so much talk of spending money on education during the campaign. And I'd like to see those campaign promises fulfilled - there are too many kids in Maryland going to school in dilapidated buildings or learning shacks, and too many good teachers leaving the profession because salaries are low. So I tend to lean towards some of the proposals for new revenue streams, including the cigarette tax and closing corporate tax loopholes. The cigarette tax increase would have added benefits in that it would help decrease the rates of teen smoking, though for that same reason it might not be the most stable revenue stream.
But I want to see what Free State readers have to say. The poll below is based on proposals mentioned in the Post article above and in today's Sun editorial.

Free polls from
How would you solve the budget shortfall (choose as many as you like)?
Reinstate the two cent property tax that was cut Postpose (or cut) the ICC and other capital projects Freeze state hiring except in critical areas Close corporate tax loopholes Raise tobacco taxes Raise gas taxes Raise the sales tax by one percent Slots! Slots! Slots! None of these are good options - I have a better idea No opinion


Anonymous Anonymous said...

Maryland's entire income tax system needs to be reformed. The superwealthy are in the same bracket as the lower middle class. A ton of revenue can be raised by imposing higher taxes on the super wealthy.

12/10/2006 11:12:00 PM  
Blogger Rfustero said...

There is no mention of an alcohol tax- it is time for this tax to be increased.

Slot machines are another solution- one only needs to visit restaurants that have keno to see that gambling is indeed a good source of revenue.

In 2002, the State Institute(?) published the results of a study on interent sale taxes. They projected, that if Maryland could impose an interent sales tax- the state could receive in excess of 500,million dollars in revenue.

Ideas such as these are seldom mentioned(except for slots) but they are worth considering.

12/11/2006 07:15:00 AM  
Anonymous OnBackground said...

There are some interesting ideas in a weekend Sun piece about the direction incoming comptroller Franchot wants to take his office -innovative and aggressive for the public good.

12/11/2006 02:40:00 PM  
Blogger OnBackground said...

Link is,0,2711447.story?page=1&coll=bal-mdpolitics-headlines

12/11/2006 02:41:00 PM  
Anonymous Anonymous said...

Thanks for the link. Franchot is a breath of fresh air compared to Willy-Don.

12/12/2006 10:18:00 AM  
Blogger Mdman said...

I agree with Political Hack, but that may be a bridge too far. One symbolic move that O'Malley could make is to eliminate some of the political positions in state government. I bet a lot of those are not necessary, but political plums to award when needed.

12/12/2006 10:23:00 AM  

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