In November 2002, voters elected Michael Steele and me lieutenant governor and governor of Maryland, respectively. In doing so, they broke with decades of single-party rule, rejecting the old “tax, spend and regulate” formula in favor of a new model based upon efficiency, accountability, fiscal responsibility and innovative solutions to old problems. In other words, people asked for change. Unfortunately, reactionary forces within the state legislature — oblivious to the results of the last election — are trying to thwart change in favor of status-quo solutions.
At issue is the recent debate over how best to meet the state’s obligation to fully fund every Maryland school under the so-called “Thornton Plan.” My solution to this problem is to install video lottery terminals at racetracks and other approved destinations across Maryland. This would pump $800 million annually into classrooms across the state.
This idea enjoys broad bipartisan support. Senate President Thomas V. Mike Miller, the most senior Democrat in the legislature, shepherded my plan through the Senate, where it passed comfortably. Comptroller William Donald Schaefer also endorsed my plan, as did State Superintendent of Schools Nancy Grasmick.
The plan enjoys strong support among the public, too. According to the most recent poll, 54 percent of Marylanders support slots, while only 35 percent oppose them. Further, the poll showed that the ratio of support remains roughly comparable across party, gender and racial lines.
Despite the fact that my video lottery terminal bill would likely pass the House of Delegates if a vote were held today, it has met an obstacle in House Democrats. Rather than seize this opportunity to generate hundreds of millions of dollars in new revenues for education, House Democrats are asking Maryland’s taxpayers to dig even deeper into their pockets.
Passed by the House only three hours after it was introduced — without even the benefit of a public hearing — the House Democrats’ tax package includes:
• A 20 percent increase in the state sales tax;
• An unprecedented expansion of the sales tax to certain services;
• Higher taxes on Maryland businesses; and
m A substantial 20 percent income tax hike for more than 50,000 Marylanders.
Republicans aren’t the only ones criticizing the plan. Delegate Peter Franchot, one of Maryland’s most liberal legislators, complained that the plan will cost the party “eight to 10 Democratic seats in the legislature.” Sen. Jim Brochin, Baltimore County Democrat, labeled House Speaker Michael Busch — the architect of the tax plan — “too liberal for the rest of the state.”
House Democrats seek to justify their tax increase by downplaying its impact on Maryland families, claiming that the proposal will only impact the “average” Marylander by about $20 a year. But the numbers tell a different story. The Democratic plan proposes $1 billion in new taxes, but only raises $670 million. If you spread that amount among all 5.5 million men, women and children in the state of Maryland, that averages out to a $120 tax increase per person.
Moreover, the Democrats’ proposed sales-income-tax increase amounts to more than $137 in additional taxes per person. This regressive tax increase will hit poorer Marylanders especially hard. With regard to the 50,000 Marylanderspenalized under the speaker’s plan, those individuals will pay nearly $6,000 more a year. All told, the Democrats’ tax package represents the largest attempted tax increase in Maryland history. What’s more, Maryland already has the third-highest income-tax rate in the nation.
When I ran for governor, I promised no increase in sales or income taxes during my tenure. In the unlikely event that the House Democrats’ tax plan makes it to my desk, I plan to fulfill my promise by promptly vetoing it.
The Democrats’ tax plan is bad politics, bad policy and bad economics. It is the last gasp of the defunct liberal status quo that ruled Maryland politics, unchallenged, for nearly four decades. It seeks to drag the state backward, during a time in which most Republicans and Democrats are eager to move in a new direction. Leadership is about looking forward, not clinging to the past. I encourage House Democrats to embrace reality and to join the rest of Maryland back in the political mainstream.
Robert L. Ehrlich Jr. is governor of Maryland.
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