The Democrats who defeated a proposed Republican budget cut in the Annapolis State House Wednesday did little to counter the underlying argument justifying a reduction in spending: If spending isn?t cut this year, taxes must go up next year.
“Our lack of action guarantees a tax increase,” House Minority Whip Chris Shank, R-Washington, said.
Democrats have freely acknowledged that tax increases are likely next year, but they dispute the size of the increases.
During Wednesday?s debate, House Appropriations Committee Chairman Norman Conway admitted that five years after the legislature passed what ended up being a $5 billion increase in education spending, it still had not enacted a way to pay for it. Without the five years of increased Thornton education aid, no looming deficit would exist.
All the stopgap measures used to pay for education aid have been taken off the table.
Gov. Martin O?Malley has promised not to use money from special funds for transportation and open space, as Gov. Robert Ehrlich had done.
This year?s budget also takes $700 million from the rainy day fund, and it?s not raining economically, Republicans complain.
But next year may bring an economic slowdown, House Minority Leader Anthony O?Donnell, R-Calvert said.
Ironically, as the House finished its longest and most substantive debate of the session, hundreds of Realtors, service station owners and other service providers were crowding the House office building to testify against a proposed expansion of the sales tax to their services.
Increasing the sales tax and
expanding what it taxes are the most likely ways the state will raise revenues.
As the debate on the budget cut raged on, reporters received a chart of Maryland taxes compared with other states.
This countered GOP arguments that Maryland ranked among the five most-taxed states.
The chart of tax revenues as a percentage of personal income showed that when all taxes were combined, Marylanders paid about 10 percent of their incomes in state and local taxes ? 26th among the states, right in the middle.
But Marylanders? state and local income taxes are the third highest in the country, one reason that raising the income tax is not the focus of discussion.
But in terms of sales taxes, Maryland ranks 45th in the nation, making the sales tax the most likely one to be raised next year.
