O'Malley Budget Tour Moves on to Howard, Sales Tax
Day 2 in Gov. Martin O'Malley's budget tour brought him to a kitchen table in Howard County and a discussion of his plans to increase the state sales tax and gradually reduce the state's property tax.
The sales tax rate would go up from 5 percent to 6 percent and would apply to some services currently exempt (think health clubs, massages and tanning bed sessions).The property tax could go down a penny each year for the next three. "There are very few taxes that hit homeowners on fixed incomes in a rougher way," O'Malley said.
His first stop on the budget tour came yesterday in Baltimore County, where he announced a major overhaul of Maryland's income tax structure. The venue was hardly the result of happenstance.
O'Malley staged the announcement on the front lawn of a middle-income family, a swing jurisdiction where he campaign heavily on pocketbook issues last year. Looking on as O'Malley made the announcement was homeowner Sarah Achenbach, a freelance writer whose husband is a state employee.
Though registered Democrats outnumber Republicans about 2-to-1 in Baltimore County, the jurisdiction showed a willingness to back a GOP candidate for governor in 2002, voting heavily for Robert L. Ehrlich Jr over the Democratic nominee, Kathleen Kennedy Townsend. O'Malley won many of the voters back last year and will need their support for re-election in 2010.
Though O'Malley is seeking to close a looming $1.7 billion budget shortfall, the first part of his plan that he unveiled will actually lower the income taxes of about 95 percent of Marylanders, he said yesterday.
The event drew more media than any O'Malley appearance since his State of the State address in January. And in a throwback to the days of his campaign, he held a "kitchen table" talk with Achenbach and her neighbors before holding the press conference.
Yesterday's event also suggested another strategy for building support for O'Malley's plan: Get the county executives on board.
O'Malley was introduced at the event by County Executive Jim Smith (D), who praised O'Malley's courage for tackling the deficit. Smith was a big O'Malley supporter last year, and there is significant overlap in their political circles. O'Malley's brother, Peter, is now Smith's chief of staff.
This morning in Howard he was joined by County Executive Ken Ulman (D). Several former officials from O'Malley's mayoral administration in Baltimore now populate Ulman's administration in Howard, another bellwether jurisdiction politically.
The rumored third stop on O'Malley's budget fix tour is Baltimore. It seems the odds are good that Mayor Sheila Dixon, whom O'Malley endorsed as his successor, will be there Friday to show her support for his new challenge.
By John Wagner |
September 20, 2007; 5:54 AM ET
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John Wagner
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Posted by: WaPost4O'Malley | September 20, 2007 12:12 PM
O'Malley wants to increase the sales tax 20% to fill a budget "deficit" in a budget that increases 8.5% while Delaware has no sales tax at all. If he wants to help working families he should be cutting the sales tax which every Marylander pays every day. Toss O'Malley a few pennies when you see him.
Posted by: Robin Ficker of Robin Realty | September 20, 2007 12:51 PM
What I'm finding interesting on the O'Malley tour is that he's focusing on his plan to raise taxes in order to cut the deficit. Part of his plan, however, calls for increased spending in certain areas. I looked on his website and haven't found any details of his proposals to increase spending. Why isn't he talking about this? Why aren't reporters asking him for these details?
His plan shouldn't be described as a way to cut the deficit. It should be described as a way to cut the deficit as well as to pay for new spending.
Posted by: MK | September 20, 2007 1:34 PM
Is any sane person surprised that O'Malley want to raise taxes and increase spending? He is a Democrat from Baltimore... Minorities need to wise up and stop tilting elections in favor of Democrats who do nothing for MD. It's obvious the Dems are two-faced... all this time they've been voting slots down, and now they are proposing them. Please, give me a break.
Posted by: IndependentThinker | September 20, 2007 5:15 PM
Well, I see the GOP and the MD Bushies are out in force. O'Malley is being more honest than were used to from politicians. The cost of living has gone up ... face it. In Virginia, they have a deficit too, but they refuse to raise taxes and its wrecking havoc on their state. Virginia counties are having to raise their local taxes to make up the difference and that thousand dollar fee attached to wreckless driving tickets was a great idea, wasn't it.
If thats how you want things run, move across the Potomac. In MD, we pay for our quality of life, but ya know it's worth it.
Posted by: Donny | September 20, 2007 8:55 PM
It is an evasion to dismiss those who take issue with Gov. O'Malley's proposed tax increases with derisive names (MD Bushies?), rather than address their points.
Most of use (including Republicans) don't object to paying some fair and reasonable level of taxes and accept taxes as a necessary cost of a civil society. I suggest that much of the outcry you see now is a direct expression that the taxes are moving beyond a fair and reasonable level. Investment in society thru govt. is necessary, but so is investment in society through the market and personal economic choices, both of which are threatened by Gov. O'Malley's proposals.
Most revenue "booms" for states have come from strong economic growth, not massive tax increases. If these massive tax increases and expansions are approved, Maryland will have one of (if not the) highest rates of taxation in the country. This will surely have the result of discouraging investment in MD, as both companies and individuals will seek to relocate to more friendly (lower tax) areas, depressing economic growth and *worsening* our economic climate. Folks will relocate to Virginia (or Penn, or DE, or even DC), and choose to shop elsewhere, resulting in an offsetting decrease in tax receipts - which will of course require additional taxes to close the new gap, in a never ending death spiral.
As for honesty, I'll take issue with that assertion as well. Gov. O'Malley says that the new taxes will be "fairer" and "more progressive" because a relatively small portion of folks (those earning less than $15K per year - how many working folks is that?) will see a small tax cut. Most folks (those between $15K and $150K) will pay the exact same - 4.75% (and I'm still not sure I understand how I'm supposed to save $90 if I'm paying the same amount - maybe it's government math). However, even assuming that there is a meager savings for most folks ($90 per Gov. O'Malley's materials in the Sun), this "savings" is more than wiped out by the 20% increase in the state sales tax. Spend $9000 and your income tax savings are gone. While I'm open to debate, most folks (especially those who call for "progressive" income tax rates) consider the sales tax the *most regressive* tax. Gov. O'Malley's rhetoric rings hollow to my ears. Or more crudely, he's trying to put lipstick on a hog (great for Redskins fans, but terrible for MD taxpayers).
(Viriginia's budget problems are not Maryland's, so a comparison of the situations is irrelevant at best, and specious at worst.)
Posted by: MD Voter | September 22, 2007 2:48 PM
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Excellent job hitting all of O'Malley's talking points yet again. If I put a (D) next to my name will you guys be my PR firm as well?