Gov. Martin O?Malley?s State of the State address Wednesday afternoon subtly linked the recent tax increase with the state?s perceived strength during difficult economic times, according to local economists, who said one might not follow the other.
“There?s almost a passive attempt to link the tax increases with our ability to rebound from hard financial times,” said Anirban Basu, president and CEO of the Sage Policy Group. “I think that?s true but has nothing to do with the tax increase. The state is able to handle recession or near-recession [because] our two drivers are government spending and health. And those sectors are not as subject to cyclical fluctuations.”
However, O?Malley also intended to reassure weary lawmakers who passed tax increases during this fall?s General Assembly special session, said Don Fry, executive director of the Greater Baltimore Committee.
“He was trying to reassure them that what they did will help Maryland maintain progress on its priorities,” Fry said. “They?re still coming down from a difficult and intense special session and find themselves back in the process less than 60 days after they left here.”
But some lawmakers aren?t so happy with all aspects of the tax increase. A bill introduced in the House on Tuesday would repeal a 6 percent service tax on computer services passed this fall and opposed by industry and state business groups. The bill was sponsored by 72 delegates, which represents a majority of the House?s 141 members.
O?Malley mentioned the need to stem a rising tide of foreclosures statewide but did not detail his previously announced proposals to do so. Mary Antoun, CEO of the Maryland Association of Realtors, said the passing mentions were appropriate for his more general speech.
“I think that?s it?s probably a smaller piece of a larger picture,” Antoun said. “I think the reason he didn?t focus on it is that this was the State of the State; what he?s proposed is pretty complex. I?m not surprised that he didn?t mention it more.”
The speech bore good tidings for small-business owners, said Marsha Schachtel, senior fellow at Johns Hopkins University?s Institute for Policy Studies.
“Most welcome, I think, was some attention to adult education, which has been languishing,” she said. “The other thing I thought was important to small business was [his call for] health care reform. I think overall, on the issues for people who are fuel for business growth, I would give it strong marks.”
