If our fearless leaders need one more reason to reverse tax increases passed during the special session, minuscule growth is it. In case legislators didn?t hear, Maryland grew at its slowest pace since 1980 between July 2006 and July 2007, adding just over 16,300 people to its population, according to recently released census data.
Without a bountiful crop of 77,910 newborns, the highest number this decade, and international immigrants, we would have lost population, as more than 35,000 people moved out of the state during the same time frame and 43,205 died.
Babies don?t pay taxes. Their parents do, so the growth, however small, does not necessarily translate to a bigger tax base ? especially as we do not know how many of those classified as international immigrants arrived through legal means and are paying a full share of taxes and how many are children.
The worst part about the news is that it is not new. The state has had a net migration loss for the past four years at the same time that job creation growth lagged the rest of the nation. The most recent job creation data, from 2006, shows that Maryland falls behind the nation in job creation growth by 0.4 percentage points. That may not sound like much, but this is a state blessed with the third-highest amount of federal dollars per person (not counting Washington) in the nation. What are we showing for it?
If not for the Band-Aid of the Base Realignment and Closure process, expected to add thousands of new jobs and residents in coming years, the state could very likely be facing a population loss.
The fact that people cannot quickly sell their homes in this market may stem the outflow. But higher taxes are not a welcome mat for anyone, especially the entrepreneurs we need to build businesses and create jobs that, lo and behold, generate real tax revenue growth even as they push rates down for all.
Gov. Martin O?Malley was not at the helm when the problems started, but his support for higher taxes, combined with higher spending for things like expanding Medicaid to 100,000 more Marylanders, will only speed the outflow of more residents. That means fewer people will be around to pay for an ever-expanding government. Slots revenue could help ? but there is no guarantee the referendum will pass.
We must not rely on temporary patches like BRAC or the hope of slots to obscure real economic trends. $1.4 billion in new taxes over the special session may pay for next year. But what about the next, and next? For those years, only pro-growth policies like low income, corporate and property taxes will help to lure ? and keep ? businesses and residents.
