Settling accounts

October 12, 2007

Cracking down on state tax evaders ought to be a top priority, particularly when Maryland is facing a $1.7 billion budget deficit. After all, every dollar collected from an unpaid tax bill is a dollar less in new taxes or budget cuts. So Comptroller Peter Franchot's recent announcement that his office could clear as much as $200 million within the next four years - if he can expand his staff, pay them a bit more, and upgrade technology - deserves serious consideration.

So why is the O'Malley administration acting so cool to the idea?

Granted, any call to hire more state employees and boost salaries ought to be reviewed with a healthy dose of skepticism. Gov. Martin O'Malley has asked state agencies to do more with less, and there's no reason the comptroller's office should be exempt from scrutiny.

But it's also no secret that relations between Mr. Franchot and Mr. O'Malley are not particularly warm, and the always outspoken Mr. Franchot's recently restated opposition to legalized slot machines was bound to lower the temperature further.

Still, it would be a mistake if the merits of modernizing the comptroller's office were overlooked because of such quarreling. Mr. Franchot's request for $30 million more for information technology has obvious merit. The legislature already set aside $10 million toward it, and it's clear the office's 20-year-old IT system needs 21st-century capability.

In recent weeks, Maryland has been collecting about $2 million more each month from businesses thanks to a pilot program with the IRS that allows the state to attach payments to federal vendors. Improved technology could allow many more such programs. The agency could tap a veritable warehouse of data to check and crosscheck financial transactions against tax returns.

What difference does staffing make? Mr. Franchot expects each new corporate auditor or revenue examiner to bring in between $500,000 and $1 million. If true (and if additional staff is the only way to achieve such collections), it would seem short-sighted not to hire them at a salary commensurate with their skills.

Mr. Franchot's job is chiefly to collect taxes. Mr. O'Malley's is to run state government. They don't have to be best friends, but voters expect them to do their jobs and not use public policy to settle accounts - other than unpaid tax bills.

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