The tax calculation
It’s a handy-dandy way to figure out just how much more the county will take out of your pocket.
On Thursday Wicomico County Executive Rick Pollitt announced through his spokesman Jim Fineran that county property owners now have a calculator to figure out how much more they’ll pay in property taxes next year.
In presenting the proposed Fiscal Year 2012 Budget to the Wicomico County Council on April 19th, County Executive Richard M. Pollitt, Jr., promised that a “tax calculator” to measure the suggested nickel tax increase would be on the county website “as soon as possible.” Mr. Pollitt announced today that, “It is up and running.”
The Wicomico County website is http://www.wicomicocounty.org/. On the homepage, there is a column on the right called “What’s New?” At the top of that column is a link titled “Proposed Tax Rate Comparison Calculator.” Users are advised to click on that link to go to the calculator.
There are two steps. If you do not know your most recent assessment value, the first is a link to the State of Maryland Real Property Database where users can access that information. County officials urge users to follow the directions carefully when they reach the link. The second is the calculator. Users may simply enter their assessment value, click on “calculate” and the device will provide specific numbers of the impact of the proposed nickel increase on the user.
In announcing the calculator, Mr. Pollitt said that, “I want to take the guess work out of this for our tax payers. I have proposed a nickel tax increase to maintain vital county services. I want the property owner to know exactly how much this is going to cost.”
The calculator does not take into effect changes in assessment from year-to-year or effects of the Homestead Credit. It is intended merely to define the effect of a nickel tax increase.
Actually, I can do the math pretty easily – for every $10,000 your property is worth, it’s going to cost you an extra $5. Someone with a modest $100,000 house will be on the hook for an extra $50, while a residence in Nithsdale or Tony Tank might see a $200 per year jump.
But, more importantly, the key question is where the extra money would be going. Pollitt claims that we’re just staying in place because assessed value in the county dropped by $300 million from last year to this year. Obviously those who were reassessed this year saw a decline of up to 1/3 in their rates, so a nickel increase may not necessarily hurt them but instead just cut into their savings.
(For example, a house assessed at $150,000 under the old rate would pay $1,138.50 in taxes, but dropping the assessment to $100,000 at the new rate makes the taxation $809.00. That’s over $300 in the homeowner’s pocket despite the increase.)
But those who didn’t get the benefit of the changes yet will have to bear the increase described above. And the increase stayed ahead of what would be considered constant yield, which is a departure from Pollitt’s previous practices. Of the five-cent increase, about 3.8 cents is constant yield while the other 1.2 cents is allowed under the revenue cap – and thank goodness for that, because otherwise we could have seen rates go up a full dime or 15 cents per hundred dollars of valuation.
Pollitt also promises to change the homestead exemption from 10 percent to zero, beginning next fiscal year. Of course, I’m not sure if that enables the tax paid to go down if an assessment is lower. Since those who were last assessed in 2009, just before the bottom really dropped out of the local housing maket, have their turn next year, will that affect them adversely? And how much more will Pollitt raise rates next year to make up for the change in homestead exemption? These questions won’t be addressed in this year’s budget – unlike the federal government, we don’t make long-term projections.
Yet if you look at the new operating budget, the largest increases seem to be in the personnel benefits, along with $200,000 devoted to a ‘time and motion study’ in the ‘Administration/Executive Function’ budget. Even without that, the executive branch didn’t suffer the cuts much of the remaining budget was forced to endure.
According to Pollitt’s budget guide, each penny in property tax brings in roughly $750,000. So in order to simply maintain the constant yield rate increase of 3.8 cents per $100 of assessed value, the County Council would have to shave about $1 million from the budget. It’s probably doable, but look for everyone potentially affected to scream bloody murder when the public hearing is held. Out of a budget of a little over $110 million, we’re actually talking about less than 1 percent cuts.
But, as I mentioned, cuts are just fine when they come out of someone else’s hide. Look for the victim card to be played early and often over the next couple months. In the end, the victims may be those homeowners who haven’t seen their assessments retreat downward to reflect the market just yet.
Maybe that will make you choke on your Easter ham, but it’s an upcoming fight we need to gird for.
Update: I wrote this last night, before Greg Latshaw at the Daily Times had his take.
Ramping up
Over the last several years, I have done the monoblogue Accountability Project. It’s an effort to identify how all 188 state legislators fared on a series of key floor (and, beginning in 2010, committee) votes based on a conservative point of view.
Generally the hardest step in the process, which takes many hours of research, is to determine just which bills are the most important ones to log. I’m going to return to that point later, but I wanted to go through some of the other parameters I’m going to include beginning this year for the second cycle of the mAP:
- I’m going to limit the number of votes to 25 each in the House and Senate. It’s not an arbitrary limit, though: since I base my point system on factors besides voting such as absences, skipping votes, or House members changing votes (all these factors can incrementally step down a score) I wanted a number I could easily divide into fourths yet remain a whole number, making the score easier to understand. So 100/25=4 points for each vote.
- Ideally, I’d like an even number of committee votes and that will be the hardest part since some committees vote on more important bills than others. I may consider committee votes as bonus points if I can’t rustle up enough votes out of certain committees and use 25 floor votes. I’d like to use between three and five committee votes as part of my 25, with the most likely result being three.
- There will definitely be a format change. Instead of grouping by district (1 through 47) I plan on doing the 2011 mAP by county – obviously MoCo will be a huge page while Somerset County would have just two legislators to deal with. But I think this is better for the end user who may not know just what number his or her district is.
- I also have to consider the Special Session this fall to deal with redistricting and any votes which come from that before dealing out legislative honors.
This is where you come in. I would love to have your assistance in identifying bills which are near and dear to your heart AND deal with statewide issues (so, for example, I wouldn’t work with our school board election bill since it only affects our county.) All I need is the bill number and I’ll take it from there.
Obviously I already know some of the biggies like the in-state tuition for illegal immigrants, the gay marriage bill, raising the sales tax on alcohol, and the three budget bills (budget, BRFA, and bond bill.) But there are other key bills and amendments I’d like to be able to consider – the hardest part is pruning to 25 votes!
So here is your chance for input on the monoblogue Accountability Project – popular demand will help me prioritize. Simply leave a comment below or e-mail me – ttownjotes (at) yahoo.com. My goal as always is to have this finished by July 4th.
Is there anything they won’t tax?
This just plain says it all, from the Maryland Senate Republican caucus:
For your full consideration, here is a condensed list of fees (which are the same as taxes) proposed by O’Malley and Democrat legislators to increase the tax burden of every Maryland citizen:
BUDGET RECONCILIATION & FINANCING ACT – O’MALLEY ADMINISTRATION
The BRFA of 2011 contains several fee increases where an assumption of additional special funds is accompanied by a general fund reduction.
· Payroll garnishment fee of $2 per payroll transaction; $50,000 contingent general fund reduction
· MHEC to charge fees to public and private institutions for academic program approvals; $253,208 contingent general fund reduction
· Nursing facility quality assessment increase from 4.0 to 5.5% of revenue; fee generates $35.1 million — $11.8 million (matched with $11.8 million in federal funds) is used to hold nursing home providers harmless for that portion of the assessment based on revenue from serving Medicaid clients; $10.3 million (match with $10.3 million in federal funds) to support an estimated 1.6% reimbursement rate increase; and $13 million to offset a contingent general fund reduction· Hospital assessment increases – to support Medicaid expansion (averted uncompensated care) and for general Medicaid operations, expected to generate $254 million in additional revenues; a $225 million special fund appropriation in Medicaid is contingent on the BRFA
The BRFA also institutes new and increased fees which are simply general fund revenues:
· Increase in the fee charged for the supervision of persons on probation (estimated by DLS to generate $2.8 million)
· Repealing IWIF’s exemption from paying the premium tax (estimated by DLS to generate $1.9 million)
· Levying a charge on drivers with a certain number of points against their license (estimated by DLS to generate $3.8 million)O’Malley fee increases as “revenue enhancements” already assumed in the O’Malley budget:
· Raising the cap on the user fees that are charged by the Health Services Cost Review Commission from $5.5 million to $7.0 million; the budget assumes an additional $0.4 million in spending in fiscal 2012
· Raising fees for court costs; the budget for the Criminal Injuries Compensation Fund increases by $2.0 million accordingly.TRANSPORTATION TAXES/FEES
Gas Tax
· 10¢ per gallon increase
· Increases state gasoline tax from 23.5¢ to 33.5¢ per gallon, 38% increase
· Indexes tax to Consumer Price Index (CPI) in 2013Vehicle Registration Fee
· Doubles current vehicle registration fees
· Car/Truck vehicle registration increase from $128 bi-annually to $178.50
· Motorcycle registration increase from $97 bi-annually to $132.00Bad Driver Fees – O’MALLEY ADMINISTRATION
· $1, 500 fine for driver convicted of driving 85mph or higher, twice in 2 yrs. This is in addition to the $1,080 already imposed for the same conviction.
· $100 per point over 5 points, charged for three years
· $500 additional charge per year for three years, for drunk driver convictionsTolls – O’MALLEY ADMINISTRATION
· MdTA has announced they will be raising fees on Maryland’s bridges, highways and tunnels by the end of the summer.
SIN TAXES
Alcohol Tax
· Tax on Beer: From .09 to $1.16 per gallon = 1,189% increase
· Tax on Wine: From .40 to $2.96 per gallon = 640% increase
· Tax on Spirits: From $1.50 to $10.03 per gallon = 569% increaseTobacco Tax
· $1 increase on a pack of cigarettes from current tax of $2 to $3 per pack
· $3 tax per cigar – a new taxSnack Tax
· Expands State sales & use tax rate of 6% to snacks – Potato chips, Pretzels, Cheese Puffs, Corn Chips, Pork Rinds, Nuts & Seeds
ENVIRONMENTAL TAXES/FEES
Wind Tax – O’MALLEY ADMINISTRATION
· Monthly increase to residential and commercial electric customers between $1.44 & $8.70
Electricity Tax
· Charge per kilowatt for electricity consumption beyond 1000kwh
· $2.99 additional charge for average consumption of 1,230 kwh per monthBag Tax
· 5¢ per disposable carryout bag a store provides to customer
· 5¢ credit for each bag provided by the customer
This is pretty useful because it summarizes, for the most part, what the majority party in Annapolis is trying to do to all of us. It wouldn’t surprise me if the total impact wasn’t over $1,000 a year on a typical working Maryland family. And what is the money being spent on? Certainly not primary functions of government:
Schools aren’t safe and just because Maryland is considered the best school system in the country; well, being the best of a bad lot isn’t much to brag about.
The roads are falling apart and traffic is terrible in many parts of the state.
Crime is rampant, Salisbury is a prime example.
One has to ask why taxes need to be raised so much when we could take the opposite tack, cut taxes, and allow increased business and job development to create revenue. Seems to me that worked for some guy named Reagan about a quarter-century ago. Even when he raised taxes a bit (while having faith that the other side would enact spending cuts which never happened) we still prospered because we were still ahead of the curve.
This time O’Malley’s not calling for the Special Session, but didn’t we tell you that 2011 would be the year of tax raising? I think we did…remember, fees are taxes too.
Saving jobs by not raising taxes
Tomorrow begins the hearing process for a piece of legislation dubbed the Lorraine Sheehan Health and Community Services Act of 2011. But if there were truth in advertising, the bill would be called the Vast Alcohol Tax Increase Act of 2011 And Beyond.
By raising taxes what they claim would be a “dime a drink” a group of General Assembly Democrats claim they can raise over $215 million for mental health services. In truth, they’re attempting to raise taxes nearly sevenfold on distilled spirits, over sevenfold on wine, and by a factor of almost thirteen on beer. If they indeed raise the beer tax from 9 cents to $1.16 per gallon it raises the price of a 12-pack by over a dollar. Since most people buy their alcoholic beverages in the form of multiple drinks (such as a case of beer or a fifth of whiskey) the price change would be much more than a dime.
Moreover, the proceeds would be spread out over a number of funds, including the General Fund. (A portion is even earmarked for tobacco cessation.) But here’s the real reason we “need” this extra tax:
The 2007 Governor’s Working Families and Small Business Health Care Coverage Act has expanded health care to over 52,000 parents but has not been implemented for tens of thousands of childless adults because of lack of funds.
Yet I thought that’s what the 2007 Special Session tax increases were for! I guess they found out they hadn’t extorted enough from working Maryland families.
There is a new website up to combat this tax increase called Save My Maryland Job. It claims that the crossfiled HB121/SB168 would cost the state 8,300 jobs in the hospitality industry. This would hit the local tourism industry hard, since Ocean City’s “family resort” certainly has a number of establishments which sell alcohol. “Our state’s hospitality industry contributes more than $4.55 billion in economic activity and employs 2.2% of the state’s workforce,” they claim.
It always seems the solution to Democrats is to raise taxes. So far this session there are proposals to raise taxes on booze, increase the gas tax, charge a fee for using plastic grocery bags, jack up the cigarette tax again, and so on. (That was just from a quick one-minute perusal of bills under the category of revenue and taxes.)
But we are tapped out, and instead of backing off the process of taking over our lives it appears the majority in the General Assembly might insist on doubling down. Haven’t they done enough damage?
The Senate bill will be heard tomorrow at 1 p.m. If other hearings are a guide, look for a number of so-called victims to be trotted out while opponents get short shrift.
A new face leads a perennial movement
It’s been tried at least twice before in the previous two sessions, but a new leader has emerged in the fight to repeal the 2007 O’Malley sales tax increase.
With the ascension of J.B. Jennings to the Maryland Senate, a similar bill to the one he introduced in 2009 and 2010 is now being spearheaded by freshman Delegate Justin Ready of Carroll County. (Introduced today, the bill is HB465.) A good sign of progress is that Ready has gathered 32 other sponsors to the bill, a group made bipartisan by the inclusion of Democratic Delegate John F. Wood, Jr.
In a statement, Ready pointed out that Maryland is a state with relatively close borders. Thanks to the increased sales tax, “businesses in Carroll County are really taking it on the chin because of our close proximity to Pennsylvania,” said Ready.
However, Pennsylvania’s sales tax is 6 percent like Maryland’s – the key difference is in the services covered. In fact, three of the five states (or districts) surrounding Maryland match the state’s 6% rate – Virginia has a 5% rate and, of course, as we all know Delaware has no sales tax. So that portion of Ready’s argument vis-a-vis Pennsylvania may not hold water, but any advantage we can get here on the Eastern Shore means something to us.
A somewhat moderating feature of Ready’s plan is that we’d have to wait two years for tax relief, as the rate wouldn’t go into effect until 2013 – presumably the economy will be on more solid ground.
Passing sales tax relief will let Maryland families know that help is on the way while also giving the state three budget years to get our fiscal house in order. Taxpayers have sacrificed repeatedly over the past few years with higher taxes and fees. The sales tax hits poor and lower middle class people hardest of all. Now is the time for government to sacrifice some spending and provide relief for our families and businesses.
(Yeesh…”help is on the way” – where have we heard this before? Obviously Justin doesn’t make the trip down here much or he’d know to avoid that phrase.)
Obviously I’m for the tax decrease, although the same idea didn’t do much to help Bob Ehrlich out. Still, I’m dismayed to see that two local representatives aren’t yet onboard as cosponsors. While Delegate Jeannie Haddaway-Riccio has lent her name to 32 bills thus far this session and cohort Delegate Charles Otto ten, neither have lent their backing to this common-sense bill as a cosponsor. One would assume they’d vote for the bill if it ever proceeds past the hearing stage (unlike the two predecessor bills) but I think that the party leadership – including the Minority Leader, Delegate Tony O’Donnell - needs to get behind this. So far he, too, is conspicuous in his absence.
If past history is any indication, the bill will get a hearing toward the end of the session in March and then be locked in the desk drawer of Ways and Means Committee head Sheila Hixson. It’s time to change that formula and give real tax relief to working Maryland families.
Tax, tax, tax, tax, tax!
To some, the size of government simply can’t be large enough to redistribute wealth to those they consider “disadvantaged.” Take the group Progressive Maryland, which I prefer to refer to as Regressive Maryland. In either case, they’ve once again combined with the supposedly nonpartisan Maryland Budget and Tax Policy Institute to produce their annual “State of Working Maryland” report describing their wet dream of social architecture and handouts to those they deem deserving.
In their report, they gasp that, “(t)he danger Maryland faces is that most of the gains of the economic recovery will flow to the wealthiest Marylanders.” Isn’t that generally the way those who assume the most risk by investing capital are rewarded? Meanwhile, they also complain that, ”(m)ajor deficit reduction should not be on the table until the recovery is firmly on track, that is, until unemployment has dropped and is on a downward trajectory.” So we are supposed to place our children and grandchildren into deeper debt because economic conditions aren’t very good? Well, the problem seems to be that our vast debt is leading to the economic doldrums, folks! How much money shoveled at the problem is enough?
Among the number of charts and graphs enclosed in the report, I found the “Maryland Job Count in Selected Industries” bar chart on page 9 fascinating. It seems Maryland’s growth industries over the last three years are (wait for it) education, health services, and – of course – government! Conversely, those taking the biggest hit over that period are manufacturing and construction. Isn’t that what they want, more government workers? This should be paradise!
But the last five pages of the report are where the rubber meets the road – they need to pay for their grandiose schemes somehow. Their wish list includes digging into the pockets of Maryland people and corporations doing business in the state to the tune of nearly $3 billion. (Consider that the state’s portion of our annual budget – not including monies passed down from the federal government – runs around $13 billion.) Apparently the pointy heads who created this report feel that working Marylanders need to cough up a little more.
These are some of the taxation schemes they’re trying to enact, with the amount they are hoping to raise:
- Extend the ‘millionaire’s tax’ which expires at midnight tonight for another three years, to raise between $70 and $90 million. That is, it would if any millionaires remain in the state – many have already fled to more tax-friendly places.
- The ‘dime-a-drink’ tax on alcohol. They actually quizzed candidates on this one; unfortunately, those who favored raising the tax tended to win at the ballot box (many were unopposed.) So those who like their Bud longnecks, their glass of white Zinfandel, or shot of Southern Comfort will be helping the state supposedly raise over $200 million. Way to tax the poor and middle class.
- Raising the gasoline tax by 15 cents a gallon to raise $450 million. The idea is twofold: get people to drive less and perhaps clamor for more mass transit. That’s not working here on the Shore; we just take it in the shorts. The same people who scream about oil companies making maybe 4 cents a gallon profit are the ones who want to deduct an extra buck or two on each tankful (on top of the 23 1/2 cents a gallon they already charge) because it’s been 18 years since the tax was raised. So? For some people it’s been 18 years since they could afford a new car, and this won’t help them a bit.
- Combined reporting for corporations will supposedly raise between $92 and $144 million, based on 2007 numbers. Of course, the numbers for 2008 weren’t as favorable for the group so they didn’t use them, claiming the year was an anomaly because it “reflects a low level of profits at the depth of the recession.” Well, guess what – driving business out of the state is going to keep us in a recession. If Maryland adopts combined reporting, business will find another loophole. Trust me on this. Even the Maryland Business Tax Reform Commission, a body mainly hand-picked by the Governor and other Democrats, couldn’t support this turkey.
- And now the biggie – expand the scope of the sales tax to include more services, for “Maryland taxes 39 of 168 services included in FTA’s survey of all states.” Yes, only 39 of 168 – that simply won’t do for them. This could raise up to $2 billion. Of course, they’re concerned about ”(t)axation of basic household services (which) would disproportionately burden low-income households” but obviously they don’t give a crap about the average working family who will get hammered every time they order a pizza or pay their cable bill.
Of these five, I give the best odds of General Assembly passage to the ‘dime-a-drink’ tax, followed by the ‘millionaire’s tax’, expansion of the sales tax to services and the gas tax increase. I think the General Assembly will heed the advice of the MBTRC and not consider the combined business tax this year, and the gas tax will be a tough sell because pump prices have surged dramatically since this summer. This is confounding experts who usually see prices decline once the summer driving season ends and refineries can revert back to a less expensive blend of gasoline that’s not formulated to fight smog.
Given the 133-55 advantage Democrats have in the General Assembly and our re-electing a governor who won’t say no if the General Assembly passes a tax increase, it’s pretty much a fait accompli we will be stuck with at least one of these increases, if not more. That’s why elections matter, and the fact that many Free Staters are tapped out doesn’t matter to many of those who were elected last month.
It’s not the tone I would have preferred to end the year with, but things are what they are. Since this is almost certainly my swan song post for 2010 (unless something really major happens and I can somehow update from my phone) I hope you all have a happy and prosperous new year in 2011 - despite the best efforts of liberals everywhere.
Will 2011 be another 2007?
With Martin O’Malley as governor, I’m afraid the answer is yes.
Brian Griffiths at Red Maryland questioned why the Maryland Business Tax Reform Commission, which was created as part of the 2007 Special Session, suddenly decided to begin meeting and taking public testimony in the wake of the election – where were they over the last several months, he asks.
In part this is thanks to a bill introduced last year which changed the original law and decreed the MBTRC has to complete its work by the end of this year, so the accelerated pace may be a natural outgrowth of that prospect.
But Griffiths naturally assumes that Martin O’Malley is going to use whatever they say as a pretense to club Maryland businesses with a tax increase. After all, if O’Malley wins he’s a lame duck who’s going to spend the latter half of his second term attempting to position himself as a contender for the 2016 Democratic presidential nomination, whether as successor to Barack Obama or challenger to a Republican president.
Of course, one selling point for him will be the shape Maryland is in when he leaves office and he’s extremely fortunate to have the job creation machine of the seat of federal government right next door. Is is any wonder the battleground of this election is MoCo and PG County? What happens to the the areas of Maryland outside the I-95 corridor will be barely noted and not long remembered by the MOM spin machine. We don’t need those icky chicken farms in our state anyway.
But as long as the federal government is hiring, it places businesses in a position where they have to grin and bear whatever tax increases are created just as long as they can access a relatively affluent market in MoCo and PG. It’s the rest of the state, particularly the areas close by state borders, where employers will be effectively told to pound sand.
Of course, there won’t be a need for a Special Session this time around because O’Malley won’t have the surplus he was handed in 2007 to cushion his first budget. They’ll get right to work in January attempting to chisel more revenue out of the state’s producers and redistribute it to the illegals and so-called working families. (That term only seems to apply if the worker toils in a union shop – all others need not apply.)
I’m not going to say that things will be easy if Bob Ehrlich wins – that is unless we have an unprecendented shift in the General Assembly which would see the GOP gain 34 House seats and 10 Senate seats to place themselves in the majority for the first time in, well, ever. But at least Maryland businesses would have a fighting chance.
A list of tax raisers
This is an extended version of an article I feature today on my Examiner.com page. Feel free to read it as I get takes on the proposed “dime-a-drink” tax from three candidates for Delegate: John Hayden, Dustin Mills, and Marty Pusey, along with State Senate candidate Chris Jakubiak. He and Hayden favor the tax while Mills and Pusey are opposed. Then come back for my argument on this.
**********
John makes some good points, but there are two items he didn’t consider. One is that sin taxes generally don’t bring in the revenue promised, and even the fiscal note for the 2010 Senate bill notes, “to the extent that the tax increases proposed by the bill result in a higher incidence of cross-border sales activity than is accounted for in the estimate, revenues would in turn be lower than estimated. This would most likely apply to the sale of distilled spirits, since these sales are likely to be more price sensitive than the others.” State beancounters estimated the tax would raise over $200 million but if they count on the revenue and it doesn’t come, who will make up the difference? We will.
Secondly, where does the taxation stop? As proposed, this would be a nearly sevenfold increase in the tax on distilled spirits, over sevenfold jump in the wine tax, and raise the beer tax by a factor of nearly thirteen. If passed, Maryland would have the second-highest tax on distilled spirits and highest taxes on wine and beer in the nation. Is that a way to portray being business-friendly?
What makes me even more incredulous is that Hayden would be representing a district where a significant percentage of that tax would be raised – walk into any Ocean City nightspot during the season and you would see hundreds or even thousands of patrons with a drink in their hand. It’s a highly competitive environment and these businessmen don’t need to give consumers any excuse to take their dollars up to Delaware (where drink taxes are also high but lower than those proposed.)
And while John advocates the drink tax, he stops short at raising the cigarette tax.”Any increase (in the cigarette tax) would be an unfair and harshly punitive tax on addicted smokers,” he said. And a drink tax would be different?
But the largest difference may be in philosophy. Where is it decreed that the government needs to pay for health insurance anyway? Hayden argues that the funding for these programs has to come from somewhere, but perhaps the better question lies in the need to have some of these programs at all. There’s no question that some in society need assistance, but does that funding really need to be from the government and does it need to come in a form which enhances Maryland’s reputation as a high-tax state?
It’s worth noting that many of those who signed the pledge are incumbents, but even for this noble cause they couldn’t be bothered to even have a committee vote on the bill last year – probably because they were afraid to back any tax increase in an election year. If they can’t stand up for principles even though the cause is so right in their eyes, why should we listen to them?
The anti-tax man
While it’s not quite “one for you, nineteen for me” yet here in Maryland, one perception among business owners who remain in the state after the last four years of being battered by a sluggish economy and government less than friendly to their interests is that taxes are simply too high.
GOP frontrunner Bob Ehrlich already promised his effort to repeal the one penny per dollar increase in the state sales tax adopted in 2007 while Libertarian Susan Gaztanaga pledges to phase the sales tax out entirely over 8 years, but fellow Republican contestant Brian Murphy is going farther down the anti-tax road.
In a series of press releases this month, Murphy has challenged his two main opponents to refrain from raising taxes, vowed to cap property tax rate increases, and revealed a plan to eliminate the corporate income tax entirely. Taken at face value, one would be led to assume that Murphy would also have to make deep cuts in Maryland’s budget.
(continued on my Examiner.com page…)
Race to the sales tax bottom
In 2007, a special session of Maryland’s General Assembly enacted a slew of tax increases designed to deal with the state’s structural deficit. Among them was a 20% increase in the sales tax rate, which increased from 5 cents on the dollar to 6 cents.
For years, merchants along the Eastern Shore have complained about the disadvantage they labor under because Delaware businesses charge no sales tax. It’s no accident that the seaside resort of Rehoboth Beach has also become a shopping hub. Or take a drive north from Salisbury along U.S. 13 and you’ll notice a number of stores selling big-ticket items located just across the border. While Maryland residents who buy items in Delaware are supposed to remit a tax to Maryland, the law is rarely enforced.
(continued on my Examiner.com page…)
Solutions to our problems
Tonight Wicomico County Councilman Bill McCain hosted a townhall-style meeting designed to solicit solutions to the county’s present and upcoming budget woes. While yesterday’s Daily Times article pointed out that McCain was looking for suggested possible fixes, many of the nearly two dozen speakers had a single message: taxes are too high and they couldn’t afford anymore increases there. “Stay within your budget,” warned resident Kay Gibson.
A number of speakers echoed their personal economic struggles; resident Ed Nelson said it well when he noted, “times are tough for everyone.”
But Bill was blunt: “you will have serious, serious services eliminated in Wicomico County” next year – “what are you willing to give up?” He continued, “we need to do things differently…unfortunately, we have capped ourselves on the revenue side.”
McCain is in somewhat of a unique position, as the FY2011 budget will be the last he’ll have input into – he’s chosen not to seek re-election, maintaining his original plan to serve one term. But he was determined to maintain his home and business here, so it’s obvious McCain is planning to stay involved. Two other council members who would presumably maintain their positions, John Cannon and Sheree Sample-Hughes, were also in attendance.
The county’s Board of Education was also a favorite whipping boy of some. Many speakers advocated the accountability an elected school board would provide.
On that note, all three Council members present were put on the spot by questioner Joe Collins, who wanted to know how they stood on an elected school board. McCain was a firm “no,” citing the “diverse” school board we presently have. Cannon and Sample-Hughes held their cards closer to their chest, with John stating a “70-30″ likelihood of support and Sample-Hughes wanting to study the particulars more – she did indicate her district was relatively supportive as was she on a personal level.
While a number of speakers commented on the revenue cap and didn’t want to see it go away, a couple observers pled for “investment.” Mark Cullen, representing the county’s volunteer firefighters, pointed out that the $4 million provided by the county covers less than half of the expenses. Instead, we’re “burning our personnel out doing fundraisers.” (Surely there was no pun intended.)
County resident John Groutt blasted the “simplistic” solutions offered by the number of “TEA Partiers” in the audience and preached “we need to invest in our children.” We also needed to address the issue of sprawl. On the other hand, it was also properly pointed out that areas which tax heavily tend to have difficulty maintaining businesses and jobs.
Most of those commenting were critical of the county’s current spending, but there were a number of good ideas pitched for consideration. Among them were:
- Hiring a full-time auditor. The problem is that the county’s charter dictates the auditor be a CPA but the salary may not be sufficient.
- Rein in the liquor control board.
- Make union negotiations public as they are in Calvert County.
- Eliminate the two at-large County Council positions.
- Eliminate the County Executive’s Public Information Officer.
- Instead of layoffs being the “last resort” they should be the “first resort.”
- Replace the revenue cap with a tax rate cap, with exemptions for those on fixed incomes.
- Rescind the increase in teacher’s retirement benefits.
- Verify that all measures called for in the 2002 Parsons study are being followed.
- Selling off any surplus land the county owns (my idea.)
- Perhaps collecting some sort of tax on property owned by Salisbury University (also my idea.)
It’s worthy of note that in the last decade Wicomico County went from having the fourth highest property tax rate in the state to the fourth lowest. And if you consider education, public safety, and public works as “core functions” of government, McCain said that we spend 76% of our budget dollars on those items.
There’s no question that severe cuts will be seen when County Executive Rick Pollitt releases his FY2011 budget April 8th. But the dialogue tonight seems to suggest that raising taxes is going to be out of the question for overburdened county residents who will likely see tax increases on the federal and state levels.
A tax increase may be in the bag
As of the first of the year, shoppers in Washington, D.C. were forced to drop an extra nickel into the till for each paper or plastic bag they used when going to the store. Store owners collected a share of the tax, but the true intent of the proceeds was a fund to help clean up the Anacostia River.
While the ban has caused some confusion among District shoppers, what truly matters to their local government is the estimated $3.5 million in revenue created by the new tax. With dollar signs in their eyes, some Maryland legislators in both the House of Delegates and the Senate want to get in on the taxation action with proceeds going (of course) to the Chesapeake and Atlantic Coastal Bays 2010 Trust Fund. The fiscal note with these bills posits a possible windfall to the state of $7.8 million based on a number of assumptions – very tempting when this is a fee easily buried within the overall cost of grocery shopping.
(continued on my Examiner.com page…)
Eastern Shore Political Buzz Examiner
Syndicate
Subscribe to this site's RSS feed.
-
-
-
Advertise with monoblogue and you’ll reach a lot of people!
Click on the photo for details.
Link to Maryland Democratic Party
In the interest of being fair and balanced, I provide this service to readers. But before you click on the picture below, just remember their message:
Locals flock to monoblogue
Click on the photo for details on advertising opportunities.
Please note that the opinions expressed on monoblogue are not necessarily those of the Wicomico County Republican Party Central Committee, of which I'm a member. (But they probably should be.)
