Marylanders may soon have to pay more at the pump, more at the store and more income taxes under Gov. Martin O?Malley?s plan to raise taxes to offset the state?s $1.5 billion deficit.
“None of this is going to be easy,” O?Malley said on WYPR radio last week.”We need to move on to the really unpleasant and unpopular questions of how we reform our tax code. Over the last several years, we have a tax code that has become less progressive and more regressive. I think we can do better.”
O?Malley has hit the radio airwaves in an effort to brace taxpayers and persuade them to cough up more of their cash to clean up the budget crisis in Annapolis.
“This crap that Maryland is overtaxed is just a joke,” said former House Speaker Casper Taylor, now a business lobbyist. Maryland ranks 31st among states in per-capita spending. “We keep the burden on the counties light.”
Rank in Spending
“We’re in the middle,” said House Speaker Michael Busch said. But he also pointed to August census report showing Maryland “as the wealthiest state in the union,” based on median household income. In income per person, Maryland ranks fifth.
Maryland also ranks 31st on spending per capita, $6,810, based on figures compiled by the U.S. Census Bureau and massaged by the Assembly’s fiscal analysts. Because of the complicated relationship between state and local governments, and which pays for and delivers what services, analysts say it is best to compare combined state and local spending and revenues.
Pennsylvania spends considerably more ? $559 more per person. Delaware, the District of Columbia and New Jersey spend even more per resident. Virginia and North Carolina spend $368 and $235 less respectively.
By another ranking, state and local spending as a percentage of personal income, the measure most favored by liberal advocates, Maryland ranks at the very bottom. “We’re dead last,” Comptroller Peter Franchot said in July as he reluctantly approved $280 million in budget cuts. In that ranking, Maryland falls below Mississippi, which has the lowest per capita income in the country.
Rank in Taxes
By another measure, state and local taxes per person, Maryland ranks ninth, with higher taxes than 41 states. The tight-fisted Tax Foundation ranks Maryland fifth in the country.
Yet by another measure the Tax Foundation uses ? revenues per capita, which include fees, lottery revenues and business taxes ? Maryland goes back to the middle of the pack, ranking 21st, just behind Pennsylvania.
Despite the Baltimore-area residents who have fled to Pennsylvania, the commonwealth to the north actually collects $285 more in revenues per person than Maryland, as do the other higher-spending states.
But by any measure of spending, taxes or total revenues, Maryland collects more dollars and spends more than Virginia, the state business leaders see as the most serious competitor for companies and employees.
“We have the highest income tax,” Senate President Thomas Mike Miller said.
Maryland’s income tax ranks third in the nation per capita; D.C. is No. 1. Maryland rank is so high because it is one of the few states where all the local subdivisions also charge an income tax. By comparison, Maryland’s sales tax is the 43rd lowest, and property taxes per capita rank it at 18th.
