It’s too late for fiscal sanity!

Here they go, locking the barn door after the horse has departed:

House Republicans (this week) offered a series of budget amendments that would further reduce state spending, allow for a repeal of the computer service tax, and cushion the state against further economic downturn and additional revenue write-downs. 

“Over the last year, the House Republican Caucus has brought forth three individual budget plans that would have preserved state services and controlled spending without increasing taxes”, said Minority Leader Anthony J. O’Donnell. “Our pleas and the pleas from the taxpayers for fiscal restraint have all fallen on deaf ears. Each plan we have presented has been soundly dismissed with little consideration. Now, on the tails of the largest tax increase in Maryland’s history, in the face of a grim economic forecast with $333 million in revenue write-downs, we offer yet another plan. We are hopeful that finally, our colleagues across the aisle will agree that it is time to restore some fiscal sanity to the State of Maryland.”

Part of the Republican Plan included an amendment from the Minority Leader that would reduce the overall budget growth from the Governor’s original proposal of 6% growth ($1.8 billion) to a growth of 2.5% ($733 million). O’Donnell’s amendment would allow for a repeal of the Computer Services Tax without backfilling with new taxes. It also created a fund balance to cushion the state against future revenue write-downs.

“Trimming a few hundred million off the budget is a good first step, but it does not go far enough to meaningfully address Maryland’s fiscal health”, said Delegate Gail Bates, the ranking Republican member of the House Appropriations Committee. “Spending has not been restrained and the Administration and the General Assembly continue to create new programs. Even with the reductions taken by the House Appropriations Committee, the budget grows by $1.3 billion, a 4.3% increase over last year”.

“Truth in budgeting does not exist in Maryland”, said Minority Whip Christopher Shank. “There are slush funds masked as hundreds of vacant but funded positions and there is no will in the majority party to truly eliminate them. Enough is enough. The chronic overspending must end. It is not sustainable and will have catastrophic effects on the citizens of Maryland.  With all indications pointing to another revenue write down in September, if we do not get a tight grip on spending the Democrats will be responsible for additional taxes, actual cuts in services people are receiving and actual layoffs of the State’s workforce.”

Unfortunately, unless they have changed the budget assumptions they made in their previous effort, it still assumes the need for each and every one of Martin O’Malley’s tax increases enacted in January to balance the budget.

There is a problem in the General Assembly, and it’s one which needs to be addressed in upcoming sessions. If you read many of the bills that are passed, you’ll find that they mandate certain amounts of money be allocated to whatever cause they were intended for and in theory the hands of Governor O’Malley are tied insofar as creating a budget. If the law says he has to spend $15 million someplace, I suspect he’s going to do that. And then you have provisions which prohibit the General Fund from raiding various funds after they reach a certain point as well.

What needs to happen is the elimination of these mandated amounts, providing more flexibilty in budgeting for the expected revenue. Right now the revenues dictate a smaller budget so that’s what should happen. If we’re flush with cash, another proposal that needs to be passed is one to give the surplus back to the taxpayers after making sure the rainy-day fund is at the minimum required for our bond rating (but no more.)

The second portion of this sea change in budgetary attitude needs to be an economic stimulus plan for Maryland. Since it’s once again been proven that increasing taxes brings decreasing revenues but still manages to do damage to the budgets of working Marylanders, my idea for economic stimulus is to do the following:

  • It goes without saying the tech tax is a goner.
  • Repeal the 1% sales tax for the entire state and make it a 3.5% decrease for the nine counties of the Eastern Shore, so our sales tax rate is only 2.5 percent. If it brings more jobs to the Shore, then we can go for the whole enchilada later and eliminate the sales tax entirely over here, placing us on a level playing field with Delaware.
  • Work with business leaders to find whichever state has the most business-friendly tax structure and copy it. If we have a business-friendly tax structure combined with the twin benefits of much higher-than-normal average income and an above-average educational system, businesses would certainly want to share in our wealth and create even more good jobs in our state – jobs where taxpayers aren’t paying the wages.
  • Speaking of wages, drop the “living wage” bullshit and let the market dictate what workers are paid.
  • Before it even has a chance to pass, let’s also do away with this job-killing idea of “Global Warming Solutions.”

It’s a nice little five-point plan that I think will do a whole heck of a lot more for the state than going along to get along. I refuse to accept the premise that we needed any of those tax increases that Governor O’Malley managed to sledgehammer through during his Special Session last fall, nor should we need this particular proposal for slots that’s on the ballot this fall. I’m not totally against slots in Maryland but since there’s no real rules defined yet I don’t feel I can support a ballot initiative that is as open to interpretation as this one is. It was the General Assembly’s job to make the laws and they punted.

Unfortunately, the other thing that seems to have been booted from Annapolis is concern for the common taxpayer, at least from the majority party.

Author: Michael

It's me from my laptop computer.