Marylanders, it is time to ready ourselves for more tax hikes. The state Department of Legislative Services revealed in June that, thanks to spending hikes, Maryland will face a budget deficit starting next year that will grow to $1.8 billion in five years. Unfortunately, our current political leadership is either unable or unwilling to do anything about their overspending habit—leaving you with the bill.
Gov. Wes Moore spoke at the Maryland Association of Counties Summer Conference last month, vaguely warning local leaders of this awful fiscal news. But his speech made little sense. Despite a homage to fiscal restraint—he repeated the word “discipline” 19 times and claimed that fiscal responsibility is his “north star”—he ignored the primary cause of the impending budget deficit, provided no realistic solutions, and evaded any mention of the tax hikes that will come.
A primary cause of the ballooning shortfall is the high cost of the so-called Blueprint for Maryland’s Future education plan, also known as the Kirwan plan. The legislative services department noted in its evaluation of the state’s financial condition that “the cash and structural budget outlook deteriorates…due to the costs of ongoing K-12 education enhancements.” Backers of the Kirwan plan have often repeated the notion that it will cost $4 billion by 2033. However, the true cost will be more than $4 billion annually. Thus, it will cost the state and local governments more than $40 billion by 2033. This came as a surprise even to Democratic politicians like Baltimore Mayor Brandon Scott, who called the cost to the city a “gut punch.”
By not deigning to address this expensive mammoth in the room, the governor is leading us all to the only other option available to government: tax hikes. And some counties, such as Montgomery and Anne Arundel counties, have already enacted property tax hikes to cover some of the costs.
Poll finds opposition to tax hikes
A poll commissioned by the Maryland Public Policy Institute, which I head, and conducted by Gonzales Research & Media Services found that Marylanders do not want their political leaders to take them down this path. In fact, 63% of Maryland voters oppose tax hikes needed to pay for increased education spending. This is why Gov. Moore, and his fellow Democrats in Annapolis are not only avoiding the subject but casting blame elsewhere.
In his speech, Moore primarily laid blame for the deficit on “the economy” not growing enough to provide government with more tax revenue, noting that the state is ranked “47th in the nation for economic momentum.” He then went on to conceitedly infer to a room of politicians that economic “growth is a choice”—their choice. And the reason the state’s economy has not grown is because the government has not spent enough of our tax dollars on their preferred projects. Thus, by an act of rhetorical flourish, he has attempted to cast blame for the problem out onto a nebulous past and faceless “economy” and simultaneously proclaimed himself to be our savior in this moment of fiscal misfortune.
But this linguistic maneuvering is troubling for more than its political gamesmanship. It reveals a backward understanding of economics that is blind to the high cost of living and high taxes that are the primary drivers of our lackluster economic growth in the first place.
Taxes driving businesses away
According to an analysis of Internal Revenue Service migration data by the Tax Foundation, Maryland’s already high government spending and high taxes are driving businesses and worker away in droves. We are ranked 5th worst in total tax return funding lost to lower tax states, with more than $1.8 billion in total personal income gone in 2019 alone. So, while Gov. Moore correctly noted that our economic momentum is nonexistent, he seems to not understand that this is the case because of government spending and the taxes needed to feed it, not despite it.
In December, Senate President Bill Ferguson, a Democrat from Baltimore, said, “In the legislature, we know how to be pragmatic, and we know how to spend responsibly while balancing our state’s most essential needs.” Like Gov. Moore’s speech, I appreciate the rhetorical credence given to fiscal responsibility by a Democrat. But their words have not matched their actions. If they keep spending irresponsible sums on schemes like their bloated education plan, Marylanders will have to prepare themselves for more tax hikes.