2 groups denounce O'Malley tax plan

October 27, 2007|By Kelly Brewington | Kelly Brewington,Sun Reporter

The Maryland Public Policy Institute and the Washington-based Tax Foundation denounced Gov. Martin O'Malley's fiscal plan yesterday, saying it would decrease the state's ability to attract and expand businesses.

"Lawmakers in Annapolis seem to believe they have little need to rein in spending," said Christopher B. Summers, president of the Maryland Public Policy Institute, which released a study saying past tax cuts are not to blame for the state's projected $1.7 billion deficit. "But it cannot tax itself out of this problem."

Summers said the state should instead reduce and re-evaluate spending on costly programs. On Monday, the Maryland Public Policy Institute will begin airing an anti-tax ad on WBAL radio.

Meanwhile, the Tax Foundation, a research group that favors lower taxes, released a separate study yesterday saying O'Malley's plan would have a "crushing impact" on business competitiveness. According to the foundation's analysis of income, sales, unemployment and property taxes, Maryland ranks 24th in the nation in business competitiveness. Under the governor's plan, the state would fall to 43rd, said the study's author, Curtis Dubay.

"Maryland's increased tax burden and less-competitive business tax climate will lessen the state's ability to attract new or expanding businesses and their jobs," Dubay said.

O'Malley spokesman Rick Abbruzzese disputed the groups' claims, saying the governor's plan will result in 83 percent of Marylanders paying the same or less on their taxes and that the state will gain jobs because of the military's base realignment and closure plan, or BRAC.

"In terms of hurting the state's chances at attracting and expanding businesses, we actually know from experience that the opposite is true," he said. "Maryland is expected to get 40,000 to 60,000 BRAC-related jobs in the next few years. ... And the things we have proposed actually keep us competitive with other states."

kelly.brewington@baltsun.com

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