Republicans given chance to propose their budget fixes

A hearing is planned for next week that will give a forum to Republican lawmakers in Annapolis to put forth their ideas on budget solutions. 

“The General Assembly’s top fiscal leaders want Republican lawmakers to gather for an unusual meeting next week to discuss programs that could be reduced or eliminated. Weary of being criticized for irresponsible spending, House and Senate leaders want Republicans to outline exactly where to trim the state’s $13 billion general fund budget.

‘”‘They never tell you exactly what they will cut,’ said Speaker Michael E. Busch. ‘Here is your opportunity.’”

Full article here.

New Jersey article fights myth that income tax drives away wealthy residents

A new report done in New Jersey found that between 2004 and 2008, the state lost $70 billion in wealth.  Of course, that was all the ammunition the ideologues would need to turn the problem into one of high income taxes driving away wealthy residents.  No matter that the facts didn’t back them up…

“Let’s check the facts: According to this report, the exodus of wealthy families from New Jersey did not increase when taxes rose after 2004, as Pennachio suggests. It actually slowed down. The problem was the sharper drop-off in new arrivals.

And according to the Department of Treasury, the number of families in New Jersey earning at least $500,000 has skyrocketed in the last decade, despite rising income taxes. You can look it up.

When told of these facts, Pennachio showed a politician’s resolve in the face of inconvenient truth: ‘I just don’t believe those numbers,’ he says.”

Full article here.

Budget shortfall prompts analysts to recommend cuts to transportation budget

The Baltimore Sun reports:

“Redirecting tax money to the general fund would help alleviate the budget crunch lawmakers have struggled with in recent years as the recession has cut into revenues and pushed up some spending. Under Maryland’s Constitution, the general fund budget must be balanced each year. There is no constitutional provision protecting transportation revenue from being used for other purposes. Attempts to add such a provision to the state Constitution have been repeatedly rebuffed.”

Click here for the full article.

Of course, a ten cent per gallon increase in the gasoline tax would not only allow the transportation fund to return the full $220 million a year (currently generated by sales tax revenue) to the general fund, but would also increase the available amount in the transportation fund by $100 million.

Washington Post editorial endorses alcohol tax increase

The Washington Post backs the “dime a drink” proposal:

“With all the groaning and wailing about hard times and austere budgets from Maryland Gov. Martin O’Malley (D) and some lawmakers, you’d think that the state had reached the limits of its revenue-generating options. In fact, it has reached the limits only of its leaders’ readiness to confront one of the most powerful and deep-pocketed special interests in Annapolis: the alcohol lobby.”

Full article here.

Neil Bergsman op-ed in Washington Post on “balanced approach”

Joint op-ed regarding budget shortfalls in MD, VA, and DC ran over the weekend in the Washington Post.

“It’s time for legislators to truly put everything on the table. This means a balanced approach to budgeting that includes revenue, rather than cuts alone….

This problem is too big to solve with any one solution. Cuts are inevitable, but multiple strategies are needed to balance the budget while still meeting people’s needs.”

O’Malley details plans to address budget shortfall

Governor O’Malley proposes no revenue increases; relies on a second federal stimulus bill and revenue from slots to make up $2 billion shortfall.

From The Sun:

“The plan includes no new taxes and allows the millionaires’ tax to lapse. It also assumes that the state will bring in $85 million in gaming revenues from Maryland’s fledgling gambling program. O’Malley’s budget also relies upon $389 million from a second federal stimulus program, though Congress has not yet approved that aid and there is no guarantee that it will materialize.”

Full article here.

Legislators consider some options to address budget shortfall

O’Malley acknowledges that “nobody will like” his proposed budget, which will address the $2 billion shortfall entirely with spending cuts. 

Democrats say that’s not true, but few expect the $13 billion plan Gov. Martin O’Malley is set to unveil Wednesday will tackle the state’s structural deficit. Many believe the spending proposal will include unpalatable cuts to close a $2 billion gap between expected revenue and spending on programs – but also short-term fixes and placeholders in expectation of a new round of federal stimulus funds.

O’Malley’s chief of staff said the governor’s spending plan for the coming year, which by law must produce a balanced budget, will have no new taxes in it. Still, O’Malley acknowledged last week that “nobody will like” the proposal he’s working on.

But some legislators are considering other options to increase revenue and soften the spending cuts.  Full article, with menu of options, here.

Advocates speak out in support of “Dime a drink” proposal

Senator Madaleno and Delegate Bronrott plan to introduce legislation increasing the alcohol tax by ten cents per drink. 

“Public health advocates are rallying behind a 10 cents-per-drink increase in Maryland’s alcohol tax to protect programs that could fall victim to the next round of state cuts needed to avoid a projected $2 billion budget shortfall.

Del. William A. Bronrott and Sen. Richard S. Madaleno Sr., both Montgomery County Democrats, said Monday that they plan to introduce legislation that would raise $200 million through higher liquor taxes. The money would pay for programs to prevent and treat substance abuse and fill other funding gaps in health-related services.

A coalition of health advocates who support the move said the tax also would reduce alcohol consumption.”

Full article here.

Delegate Manno to introduce bill on combined reporting

Montgomery County delegate Roger Manno’s bill would close the loophole that allows corporations to legally dodge paying Maryland taxes:

“A bill to implement a new tax method for certain businesses referred to as “combined reporting” already has been pre-filed by Del. Roger Manno (D-Dist. 19) of Silver Spring. The measure would require companies that operate in numerous states to total their combined profits from all entities and then pay a portion to Maryland based on factors such as how much property, payroll and revenues were reported in the state.”

Manno’s bill would also extend the “millionaires tax,” which is set to expire at the end of the year.

Full article here.

National recession hits states’ budgets

Maryland isn’t alone at facing down a bleak budget situation that will require difficult choices this year.  Jennifer Steinhauer of The New York Times looks at how the national recession has hit state budgets:

“For many of the states, the new year spells the end to accounting maneuvers, one-off solutions, tax increases and service cuts that were as deep as lawmakers thought they could bear. And governors confront this situation in an election year in which dozens of their jobs are in play, and as many state legislators face their own election challenges.

“’A budget gap of 5 percent or 10 percent in any given year is a tough problem,’ said Corina Eckl, fiscal director at the National Conference of State Legislatures. ‘But we’re talking about gaps in excess of 20 percent over multiple years. The size of these gaps is staggering.’”