By Len Lazarick
Stupid me for not reading the fine print when legislative leaders said they were not going to raise tax rates.
“Maryland’s new legislative leaders flatly ruled out raising income, property or sales tax rates this year to pay for sweeping education measures,” wrote Erin Cox in the lead to the Washington Post story.
Perhaps the Sun reporters missed the subtlety of the promise when they wrote in their legislative preview:
“…The legislature’s two new leaders are trying to pull off a historic feat: Pass sweeping reforms aimed at greatly improving the state’s public schools — and do it without a massive tax increase.
“In interviews with The Baltimore Sun, House Speaker Adrienne A. Jones and incoming Senate President Bill Ferguson said they have ruled out across-the-board increases to state sales, property or income taxes.”
All three of these experienced reporters probably recorded their interviews with Jones and Ferguson. While Cox mentions “rates,” the overwhelming impression was: We will not raise taxes on income, property and sales.
Hooray, that’s how Republican Larry Hogan got elected twice.
Then last Thursday, House Majority Leader Eric Luedtke, a former social studies teacher who is one of the sharpest, most articulate members of the progressive majority, unveiled a proposal that will lower the sales tax from 6% to 5%. Hooray again!
Taxing more than 80 services
But wait a minute. They will take that 5% and apply it to all kind of services that have never ever been taxed before, raising another $2.6 billion. Barbers, hairdressers and nail salons, plumbers and electricians, lawyers and accountants, newspaper advertising, financial advisers and fitness centers, labor on car repair, appliance fixing, home security, maybe on the services to pay your state taxes.
This will cost the average person only $3 a week, said Luedtke, as if anyone pays for anything by the week now that the milkmen and newsboys are out of business. That’s at least $150 a year.
Ferguson and other officials make the quite legitimate argument that the economy has changed, with services now dominating. He bemoans having a 19th Century tax structure for a 21st century government.
But the fundamental reason for taxing them is that after months of searching for ways to pay for the Kirwan commission education reforms without hitting the wallets of the middle class is that none of the proposals – sports betting, legalizing marijuana, revamping corporate taxes, taxing Google and Facebook ads– could produce the billions they need to fund the plans.
And what about the local jurisdictions who must come up with extra money from the same taxpayers? Their only option at the moment is raising the property tax, a regressive 18th century invention.
What do voters think?
A Goucher College poll taken Feb. 13-18 and released Monday found Marylanders generally support some of the Kirwan Commission proposals, though two-thirds say they’ve heard or read “nothing at all” about it.
When asked about state taxes, half the respondents said they are already too high, and 44% said they are about right.
Nearly three-quarters of Maryland residents say they prefer an income tax system where “people with higher incomes pay a higher tax rate than those with lower incomes.”
When asked about the relationship between taxes and government services in Maryland:
- 37% would rather keep state services and taxes about the same as we have them now.
- 28% would rather have more or improved state government services if that meant more taxes.
- 28% would rather have fewer state government services in order to reduce taxes.
In her analysis, Mileah Kromer, director of the Sarah T. Hughes Field Politics Center that conducted the poll said:
“While the public continues to be largely unaware of the Kirwan Commission itself, large majorities of Marylanders recognize that public schools are facing the very problems its recommendations were designed to address. Residents across party lines largely agree that public schools need more vocational training and better-paid public school teachers.
“At the same time, a plurality of residents wants to keep state services and taxes at the current level, and a majority believe that state taxes are currently too high. Our results suggest that the costs of the Kirwan recommendations, rather than the merits of the plan, will be of concern to Marylanders.”
Here’s what the 713 poll respondents (83% interviewed on cell phones) said about Kirwan.
- 93% agree that “public schools should offer more job or vocational training programs,” 4%
- 85% agree that “the salaries of public school teachers are too low,” 10% disagree.
- 76% agree that “many public school buildings and facilities in Maryland are run-down,” 16% disagree.
- 69% agree that “public schools in Maryland don’t receive enough state funding,” 18% disagree.
- 64% agree that “state funding for public schools is not spent effectively by school administrators,” 19% disagree.
- The margin of error for the poll results is plus or minus 3.7%