Raising Taxes

In the first television advertisement of his reelection campaign, Democratic Gov. Martin O'Malley invited viewers back to his first year in office. Faced with a deficit left by Republican Gov. Robert L. Ehrlich Jr., the spot said, O'Malley was forced to cut spending. Ehrlich, now running to win his job back, remembers the transition differently. He says he handed his successor a billion-dollar surplus — money Ehrlich says O'Malley then frittered away, before passing a historic tax increase.

The "dime-a-drink" liquor tax increase is an important measure and a fair way to raise money for critical public services. With this economic downturn and many people searching for public support for the first time, I think we're all a little more aware of how important a strong safety net can be in helping families stay afloat and make ends meet. Cutting these programs right now is not a viable option if we want a swift economic recovery in Maryland. I believe this tax can improve our state by reducing underage drinking and helping to expand health care coverage to low-income working families.

As the Howard County Council moves closer to approving a tight Ulman administration budget for fiscal 2011, Republicans are raising the specter of a Democrat-led tax increase if that party retains its political power in November's election. The GOP wants a charter change to make it harder to raise taxes. But Democrats, who hold the executive's post as well as four of the five County Council seats, say they've managed to ride through the recession without raising general tax rates.

As the city teeters under prodigious budget shortfalls, raising property taxes might appear to be a tempting option for the new mayor. But nothing could be more harmful to the city, said Baltimore-based economist Anirban Basu. "Any increase to the city's tax rate would accelerate the exodus of taxpayers from Baltimore City and damage the city's ability to sustain its tax base," said Basu, the chief executive of Sage Policy Group, an economic and consulting firm. Rather, Stephanie C. Rawlings-Blake must make painful cuts to services - downsizing city government at all levels - and generate revenue by creating a land bank to expedite the sale of vacant properties, Basu said.

As the city teeters under prodigious budget shortfalls, raising property taxes might appear to be a tempting option for the new mayor. But nothing could be more harmful to the city, said Baltimore-based economist Anirban Basu. "Any increase to the city's tax rate would accelerate the exodus of taxpayers from Baltimore City and damage the city's ability to sustain its tax base," said Basu, the chief executive of Sage Policy Group, an economic and consulting firm. Rather, Stephanie C. Rawlings-Blake must make painful cuts to services - downsizing city government at all levels - and generate revenue by creating a land bank to expedite the sale of vacant properties, Basu said.

With state revenues in a deep, dark hole, some groups are pushing for an increase in taxes on a product no one truly needs, many would be better off without and which hasn't had a state tax increase in decades - alcohol. The Abell Foundation, created in 1986 with proceeds from the sale of the family-owned Baltimore Sun, is pushing for a 10-cent-per-drink tax increase on beer, wine and liquor, and The Sun has supported the idea in several editorials. But if the opinions of Howard County legislators are indicative, that push might be a long, uphill one, especially in an election year.

Conventional wisdom in Maryland's State House holds that lawmakers never, ever raise taxes in an election year. The notion is so deeply embedded in the Annapolis political class that it might as well be carved in marble and offered as the official state slogan. Yet abandoning that custom in 2010 would give state legislators an opportunity to strike a blow against alcohol abuse, underage drinking, murder, rape and other acts of violence across Maryland, while simultaneously sparing the public from the worst effects of budget reductions forced by the current economic downturn.