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Who
would have thought? Even
the Democrats in the Maryland General Assembly seem
to be more opposed to tax increases than leading
Republicans in the Virginia General Assembly.
In
Annapolis
just days ago, the Democratic leadership in both the
House and Senate announced that they would not
support an increase in the Maryland
sales or income tax.
Meanwhile, Virginia
legislators have a $1.2 billion surplus and another
$1 billion in potential savings to work with, yet
some still talk of increasing taxes just after
enacting the $1.4 billion biennial tax hike last
year.
There
was a time when Maryland
was considered by Virginians a hotbed of liberalism
on a par with
Massachusetts.
Legislators were warned to stand by the
republican principles of Thomas Jefferson, Patrick
Henry and other great Virginians to avoid the fate
of our neighbor to the north.
Now it seems Maryland
should be emulated.
Last
month, a Washington
Post editorial complained that the overall tax
burden on businesses in
Maryland
is too low. A
recent study concluded that
Maryland
businesses pay a lower share of overall state taxes
than their peers in any other state in the nation,
including Virginia.
Yes,
you read that correctly. Maryland’s
tax burden on business is lower than Virginia’s.
Maryland’s
treasury won’t have a surplus this year as large
as Virginia’s,
but the Maryland General Assembly also didn’t
enact a massive tax increase last year as the
Virginia General Assembly did.
Maryland
has a AAA bond rating, which matches Virginia’s.
The economy of both states is robust, and the
financial condition of both state governments is
sound.
A
year ago, the Speaker of the Maryland House of
Delegates, Michael Busch, proposed a $670 million
annual increase in sales, income and vehicle titling
taxes. It
failed, in part because of opposition from other
Democrats in the Maryland
legislature, especially the Democratic leader in the
State Senate, Nathaniel McFadden.
One
of the differences in the approaches of the two
states is the far more aggressive effort last year
by Maryland Gov. Robert Ehrlich to eliminate
marginal programs and to cut state spending than
that undertaken by Virginia Gov. Mark R. Warner.
Warner argues that he has made all the
spending adjustments he can, but his reductions have
come predominantly from rolling back the enormous
spending increases enacted just before he took
office, not from the elimination of programs in the
state budget base.
If
Maryland
had the opportunity to save another $1 billion a
year through increased efficiency and other spending
cuts, it’s a safe bet that Gov. Ehrlich and
Maryland
legislators of both parties would act on it.
But not in Virginia,
where no legislative leader has pursued the claims
made by Gov. Warner two years ago that $1 billion in
annual savings could be realized just by
implementing recommendations of his Commission on
Efficiency and Effectiveness.
Another
major difference is in the performance of the
political parties in Maryland
and
Virginia.
In 2004, Virginia Republicans split over a
tax increase, while Maryland Democrats split over
the failure to raise taxes.
This year, the Maryland Democrats are in
general agreement not to raise taxes.
The same isn’t true of Virginia Republicans.
The
Maryland GOP is growing in strength.
The Virginia GOP has recently lost ground in
a special election to fill a House vacancy.
Could the tax issue have something to do with
that?
--
February 14, 2005
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