Maryland's Needs Begin with Revenues

January 31, 1991|By R. ROBERT LINOWES

ANNAPOLIS — Annapolis. Maryland's needs for the long-term -- in education, in transportation and the infrastructure -- are undeniable. Marylanders at every income level have indicated a willingness to invest more money to improve the quality of education throughout the state. There is equally strong evidence that many of these same citizens understand the need to invest in long-term improvements to Maryland's transportation system, infrastructure and capacity to deliver essential services such as public health and public safety.

Our state has a national reputation for fiscal responsibility. Yet, we do not have the resources to make the necessary improvements that will help propel Maryland into the next century on a level of excellence -- and with a quality of life -- that will ensure continued economic stability and the ability to compete successfully.

Achieving these goals will require resources not now available. And the only way they can become available is through sensible and timely changes to the system by which Maryland taxes and spends its money.

Three years of study by the Maryland Commission on Taxes and Tax Structure demonstrated beyond all doubt that our current system cannot keep pace with current needs. Indeed, over time, it has contributed to the growing disparity of wherewithal and opportunity among our 24 jurisdictions. The state's longer-term needs and goals are rapidly slipping beyond reach.

Maryland is not broke. But its system for raising and allocating moneys is. The time has come to fix it. And the way to do so has been clearly outlined in the studied proposals unanimously approved by the commission and recently sent to Gov. William Donald Schaefer.

In a nutshell, the commission believes that its proposals will generate the resources and improve the system through which they are not only derived, but applied. The future economic and social well-being of all our citizens requires a tax system that is fair, pragmatic and truly focused on people.

Fairness means that the responsibilities should be shared broadly, but according to each individual's ability to pay. That is, people in similar circumstances anywhere in the state should pay similar taxes. Moreover, those who can least afford to pay should not be compelled to shoulder a disproportionate share of the burden. For example, those in $15-20,000 bracket are now paying 10.5 percent of their income in state taxes. Those earning over $50,000 are only paying 8.5 percent of total income to the state.

Pragmatic means that the system should be capable of generating certain new revenues from untapped resources such personal property (automobiles and boasts), the service sector (now the largest and fastest-growing component of the state's economy), and by enlarging the base from which sales taxes are collected. Pragmatic also means a system that can assist poorer jurisdictions without taking away current sources of revenue from the more affluent jurisdictions.

Finally, a system that is truly focused on people means earmarking new revenues for the things people value most -- education, transportation and the infrastructure -- and predicating the allocations against reasonable standards for performance and accountability. Jurisdictions don't pay taxes, people pay taxes. If people are being asked to pay them there must be evidence of a measurable result for their money.

When the Maryland Commission on Taxes and Tax Structures began its work three years ago, it believed that its final proposals should be revenue neutral. Yet, as the independent research studies came in -- and as the commission heard from citizens and local officials from throughout the state -- it became clear that Maryland could not achieve new levels of excellence without new resources.

The commission became convinced that Maryland's future depends on more than new resources. Indeed, it depends most on a system that not only produces resources more fairly, but assures taxpayers a fairer return on their investment.

Money is not going to provide the answers, per se. But without money Maryland cannot even begin the process of meeting the essential long-term needs of the entire state -- notably the preparation of a well-educated work force. At the same time, Maryland lawmakers have long been frustrated by the provision of grants to local education with little to show for it. That is why the commission's proposals insist on a system that links performance and accountability to the designated assistance.

The commission's proposals mean that some Marylanders will pay more taxes. But it is also true that many more of our citizens -- two-thirds of whom have incomes of $40,000 and below -- will receive reductions in their personal income tax. Lest anyone think the more affluent jurisdictions do not have these same needs, 61 percent of the taxpayers in Montgomery County fall below the $40,000 bracket.

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