Gov. Martin O?Malley, Senate President Thomas V . Mike Miller and House Speaker Michael Busch must possess special knowledge. Just as the national economy teeters on the edge of a recession because of the housing meltdown, they decide to hike state taxes across the board. What a plan! Drain the taxpayers when they can least afford it! As Steve Hanke, professor of applied economics at Johns Hopkins University said Tuesday, “this whole thing happened with the worst possible timing.”
Tell us, leaders. Will Maryland escape the housing fallout? Does it exist in a special federal government-financed bubble that immunizes it from the rest of the U.S. economy? History tells us no.
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So does common sense. Rising demand for oil around the globe pushes oil prices up in Maryland just like everywhere else. Imports cost more in Maryland just like the rest of the country because of the dollar?s slide against other currencies. And home sales fell 31 percent last month in the Baltimore region from the previous year ? the lowest level in eight years ? not unlike what?s happening in many parts of the country. So if you wanted to move to escape taxes, it?s getting a lot more difficult.
California Gov. Arnold Schwarzenegger earlier this month directed every state agency to cut spending by 10 percent for the next budget to address the state?s rising budget deficit, largely fueled by problems in the housing market. That makes sense. It?s what O?Malley should have done before calling for a special session and demanding concessions from residents without any corresponding sacrifice from state government.
Maryland cannot wring higher revenue from residents if they don?t have it. They will spend less and businesses will hire fewer people if current trends continue. That means less money gleaned through taxes. If that is making “progress,” we?d like to go backward.
But maybe O?Malley, Miller and Busch know something we don?t. Maybe they have a plan to isolate Maryland from the problems of the rest of the country and the world and protect it from forces outside their control. If they do, we?d like to hear it. Otherwise, legislators must reverse course when they return in January and slash spending and cut taxes.
