Montgomery County Executive Ike Leggett joined county leaders from around the state Thursday in rallying support for the governor’s plan to raise taxes, despite concerns from local leaders that the plan would disproportionately burden Montgomery residents.
Gov. Martin O’Malley’s plan to close a $1.7 billion budget deficit includes a 20 percent hike in the state sales tax, raising income taxes for people earning more than $150,000, and possibly using slot machines to close a $1.7 billion budget gap.
O’Malley’s team released a “doomsday” budget scenario this week that said Montgomery alone could lose $86 million in state funding if his tax plans aren’t adopted.
Former County Executive Sid Kramer said Montgomery County residents will generate by far the greatest share of all the new income tax revenue under O’Malley’s proposal.
“The governor’s proposals will hit Montgomery County the hardest as it relates to who will be paying the tab,” Kramer said.
The State Comptroller’s office said Montgomery County would supply a net 80 percent of the money generated by O’Malley’s income tax package.
Leggett told The Examiner he has some “questions about the details” of O’Malley’s plans, but that overall he is supportive of the governor’s proposals.
According to Patrick Lacefield, Leggett’s spokesman, while the county executive supports changing the income tax structure to make it more progressive, he thinks raising the rate from 4.75 to 6 percent for those earning more than $150,000 and to 6.5 percent for those making over $500,000 could affect the area’s competitiveness.
“Our concern is not whether people making that much could or should pay more taxes,” Lacefield said. “… But one unintended consequence could be that people might not choose to live in Montgomery County. They can move across the district line, they can move to Virginia.”
Montgomery Republican Party Chairman Tom Reinheimer said he will join 100 other Montgomery residents in protesting the tax plans in Annapolis on Monday. Reinheimer said O’Malley has put Leggett in a tough spot.
“Right now he is kind of caught between two things,” Reinheimer said. “Heenjoys the money Annapolis sends his way, but on the other hand it is his constituents who will foot the bill for most of it. ”
University of Maryland public policy professor Jacqueline Rogers said concerns about losing people to other areas were unfounded.
“If you’re raising taxes at incomes of $150,000 you’re not hurting middle-class people,” Rogers said. ”
You’re just taking a little out of the pockets of the wealthiest. …counterbalance that with quality-of-life issues, and Montgomery remains a very attractive place to live.”
Rogers and Kramer said Leggett is likely engaged in behind-the-scenes negotiations with O’Malley to work out an acceptable income tax reform plan.
“He is obviously anticipating the governor will adjust the numbers in his package,” Kramer said. “I do have confidence in Mr. Leggett, and I am sure in his many conversations with the governor he has indicated there will be changes to this plan.”
