New tax revenues were the drum beat heard by Maryland Economic business advocates Thursday.
Talking to 150 economic development officials, Maryland legislative leaders emphasized the need for new tax revenues, particularly to support transportation, and a key committee chairman suggested abolishing the corporate income tax in exchange for an expansion of the sales tax.
Heads of some of the region?s largest business advocacy groups attending the meeting of the Maryland Economic Development Association in Annapolis agreed that new funding sources for road and transits was needed and the time was right to take a comprehensive look at state revenue sources.
“I think everything will be on the table” about revenues, said Kathleen Snyder, president of the Maryland Chamber of Commerce. “It makes good sense to have a study” of the overall tax structure so that it is “fair and competitive in the global marketplace.”
House Speaker Michael Busch told the group that “our transportation fund is underfunded.”
“In 1995, we probably should have raised the gasoline tax” by five cents, Busch said, raising $1.5 billion over the decade. But with the high cost of gas, “there?s probably no appetite to do that” now.
Senate Finance Chairman Thomas Mac Middleton said, “I?m hoping that Gov. O?Malley will put together a task force to look at how biggovernment should be,” but the new chief executive is “wise” to have said he won?t be looking at tax increases this year.
Since it only raises about $200 million, “why don?t we just eliminate the corporate income tax?” Middleton asked. “Expanding the retail sales tax would be a good trade off.” This could mean applying the 5 percent rate to services, such as car care, advertising, accounting and other services that are currently not taxed.
Senate President Thomas Mike Miller said Maryland?s corporate income tax is “one of the lowest in the country,” as is the sales tax, while “we have a relatively high income tax.”
Miller said the revenue shortfall needed “someone with a work ethic to spend some political capital” to fix the situation, implying O?Malley.
“Now is the time” to look at transportation funding, said James Dinegar, president of the Greater Washington Board of Trade. But people want to know “what are you going to spend the money on. The case can be made, but it hasn?t been made yet.”
Don Fry, president of the Greater Baltimore Committee, said, “We certainly think transportation funding is going to be the most important economic development issue in the next decade. Otherwise, we?re going to find ourselves mired in gridlock.”
Fry and Dinegar co-chair O?Malley?s transition work group on transportation.
