The Maryland legislature reconvened this month and it only took about a week before talk of tax increases started dominating the headlines.
The state’s budget situation in Annapolis is much improved over previous years when significant structural deficits had legislators scratching their heads on how to raise new revenues while lowering expenses. In most cases, the answer was implement new or increased fees and raise taxes. Generally speaking, Maryland legislators, particularly those in control and from the western shore, prefer to take more from citizens than to find real savings in employee costs and other fixed expenses.
That’s why it’s not surprise to hear talk of more tax increases.
Gov. Martin O’Malley has been privately trying to drum up support for another penny on the state’s sales tax rate, taking that to 7 cents on the dollar from the present 6 cents. The idea being it would raise the needed funding to restore transportation funding, which was stripped and reallocated to other budget areas during the structural deficit emergency days.
Additionally, Senate President Mike Miller is advocating for a local gas tax of sorts. His plan suggests a 3-percent sales tax on gasoline that would be assessed at the wholesale level and would create regional authorities to administer the taxes to fund local projects. His proposed legislation will reportedly give local elected officials the opportunity to raise the per-gallon tax in individual jurisdictions by as much as five cents depending on transportation dollar needs. The new tax would raise about $300 million.
Any talk of tax increases is ridiculous. The economy is slowly improving on the shore, but it’s far from healthy and small businesses and households are still feeling the pinch.
The talk of a sales tax increase is crazy, considering neighboring states with lower taxes are already drawing shoppers away from Maryland businesses at an alarming rate. Another increase will be the death knell for some businesses. There is no question about that. It’s too competitive as it is.
The gas tax proposal has some potential, but the fact is it’s going to hurt consumers and motorists despite safeguards built into the bill that supposedly protect those paying at the pump.
It’s going to cost residents more to fill up and it’s going to hurt the merchants who are already struggling with nearby Delaware competition. Marylanders can only give so much and afford so many increases.
On the topic of restoring transportation funding, O’Malley said this week, “We can figure this out together for every citizen of our state, and we can do it now and in this session, or all of us are going to waste more time and money sitting in more and worse traffic.”
On the lower shore, traffic is not the significant concern. It’s safety. However, we are not buying the fact taxes have to be increased to ensure transportation projects get funded. There are other ways, and the legislature needs to reduce the state’s spending so our households do not continue to suffer because of our lawmakers.