ANNAPOLIS – The budget briefing Wednesday by the Office of Policy Analysis confirmed Maryland senators’ worst fears – while the economy is improving, Maryland’s revenue picture is still pretty rough.
Senate Budget and Taxation Committee Chairman Ulysses Currie, D-Prince George’s, said it may be time to take advantage of Maryland’s change to a service economy and target taxes there.
“I think there’s a shift in our economy, a shift towards a service industry that we may need to look to as a source of revenue. We need to begin to think outside the box,” Currie said.
Legislators on all sides of the debate on how to close Maryland’s budget deficit found further fuel for their arguments in the report, the first in a series of three scheduled this fall to educate the Senate committee members on Maryland’s revenue structure before the session begins Jan. 14.
The report detailed the history of Maryland’s revenue structure during the past 30 years and compared the state’s spending and taxation to other neighboring states.
During the hearing, Sen. Patrick Hogan, D-Montgomery, pointed to the report’s finding that Delaware raises nearly twice as much as Maryland in the miscellaneous category, which includes funds from slot-machine gambling.
The Maryland General Assembly wrestled with approval for slot machines at four race tracks in its spring session, but the legislation was killed in the House. Gambling expansion is still being considered by Hogan and others as a solution to the budget crisis.
“Clearly, Delaware raises a lot of money in that category. If you go to Dover Downs or Delaware Park you can see Maryland licenses. That just proves the point that it’s generating a tremendous amount of revenue for them and it’s revenue that Maryland can also realize,” said Hogan, committee vice-chairman.
Warren Deschenaux, legislative analyst, debunked the myth that Maryland spends more on its programs than other states, noting that Maryland ranks 26th in the nation in spending.
“We’re not that wild and crazy when it comes to spending. People of this state hold on to a good chuck of their wealth, compared to other places,” said Deschenaux, director of the Office of Policy Analysis.
That was welcome news to Sens. Ida Ruben, D-Montgomery, and Gloria Lawlah, D-Prince George’s, both of whom want to consider raising corporate taxes as a solution to the state’s budget crisis.
“I think the report flies in the face of the assumption that Maryland is a high tax state,” Lawlah said.
“What’s disturbing is if we are going to switch our taxes to businesses and corporations, people will say we’re not business friendly,” Ruben said.
Sen. Rona Kramer, D-Montgomery, said that while there were no real surprises in the information presented in the briefing, it was a good opportunity for senators to take a look at how the rest of the country is coping with revenue losses in the wake of the recession.
“When we discuss Maryland taxation, it’s important to consider where we rank in comparision to other states. We need to look at the big picture.” – 30- CNS-9-10-03