Tax Revenues

Uncharacteristically, I want to begin this column with some good news on the economic front, though it will be brief: Across the country, state tax revenues are rising substantially, indicating there is a real recovery going on. For the spendthrift federal government, tax receipts rose by $110 billion, or 9.1 percent, in the first seven months of fiscal 2011. In telling us this, The Wall Street Journal says the bad news is that the federal deficit increased a record $871 billion, a $71 billion dollar bump, because spending went up $181 billion, or 6.4 percent.

Facing escalating demands for expensive new schools and other projects, Howard County expects a less generous economy next year that could provide fewer new dollars to pay for them, county Budget Director Raymond S. Wacks said yesterday. Speaking to the County Council, Wacks previewed the next budget year, which begins July 1, predicting slightly higher property tax revenues but a slowing of income tax growth, as capital gains revenues decline in a flat stock market. "We're looking again at a steady and strong growth in the assessable base," Wacks said, noting that some homes in Columbia's newest village, River Hill, might increase in value by 9 percent over three years after years of flat assessments.

Since 55 million retirees have received no cost of living increases for the last two years it only seems fair to freeze all government and elected officials' salaries until jobs in the private sector grow and tax revenues increase. Moreover, there should be no bonuses for government employees until the economy becomes healthy enough to increase tax revenues. These are ominous times and really tough decisions are needed. Printing and borrowing more money is not the answer. Bill Huppert

The Sun's recent article about growlers exposed more of Maryland's regulatory absurdities ("A growing movement to widen growler sales," Feb. 5). "Statewide restrictions limit the sale of growlers to brewpubs ... excluding bars and most restaurants. " If there were no restrictions, wouldn't more good beer be sold and thus increase the tax revenues? Maybe it's time to rethink our prohibitionist system. James Bauernschmidt, Severna Park

As I read, watch television, and listen to the radio I have become convinced that the biggest impediment to creating jobs in the private sector is the vast number of government regulations that deter investment, especially among small businesses. When more non-government jobs are created, tax revenues will increase. Regulatory reform should be the primary issue before Congress, not another spending bill that will increase taxes. Bill Huppert

IN YOUR March 1 editorial, you warn that we should "go slow on cutting taxes." The reason we have a tax surplus is that we are overtaxed in the "Great Society" state of Maryland.Your worry that tax revenues might fall flat or decline is typical of your paper's Democratic tax-and-spend philosophy.If tax revenues decline, our legislators will have to do what every business or household does when cash flow is strained: cut spending. Not all government "programs" are vital to the well-being of Maryland citizens.

Maryland's projected budget gap has shrunk by more than $600 million since June because of higher-than-expected tax revenues, legislative budget analysts said yesterday. Analysts told lawmakers and the state Spending Affordability Committee that the gap between revenues and expenses in the budget Gov. Robert L. Ehrlich Jr. is preparing to release in January is now $388 million, down from a projected $1 billion a few months ago. Ehrlich must submit a balanced budget, so some spending cuts are expected.

Maryland's local governments have enjoyed several years of surging revenues because of a real estate boom that propelled home sales and values to record levels. But the onset of a real estate slowdown has them preparing for leaner times. Local officials expect a sharp drop in transfer and recordation tax revenues that are generated when a property changes hands or is refinanced. "I've been predicting a slowdown of this revenue for five years. Finally, I'm right," said John Hammond, Anne Arundel County's budget director, who budgeted for a 25 percent drop in real estate tax revenues - $105 million for the fiscal year that started July 1, down from $130 million in the last fiscal year.

In addition to a $27.4 million shortfall created by state ai cuts, Baltimore County now faces a $4.3 million deficit in its own revenues, County Executive Roger B. Hayden said yesterday.Speaking to the County Council at an unannounced meeting, Mr. Hayden said he is two weeks away from deciding how to patch the $31.7 million hole in the current budget."We will be eliminating good programs, useful programs," he said, based on a comprehensive review of government services that has been under way for weeks.

There is a truism about the rapid development of any community: New neighborhoods get a lot of attention, in the form of new roads and schools. And, as a consequence, those who live in older communities often feel neglected.Del. Virginia M. Thomas, D-13A, is proposing a way to deal more equitably with old and new neighborhoods by directing certain tax revenues to older schools in need of renovations and new equipment. Her intentions are commendable.Specifically, Delegate Thomas wants the state legislature to allow the county to direct funds from a proposed tax on parking to older schools.