Taxes And Spending

Two reports came out last week that seemed to present a puzzling paradox. On the one hand, the Tax Foundation issued its annual rankings of state business friendliness based on taxes, and it pegged Maryland as sixth worst. On the other hand, the Census Bureau released figures showing that, once again, Maryland is the richest state in the nation, with a median household income of $70,545, about $1,500 more than last year. What gives? Sure, there are plenty of reasons in Maryland's case why business friendliness and prosperity wouldn't necessarily go together.

Legislators appeared poised to pass nearly $1.3 billion in tax increases early this morning as part of Gov. Martin O'Malley's plan to eliminate the state's projected budget shortfall, coming quickly to a compromise yesterday on a plan that could affect the pocketbooks of all Marylanders. The package would establish higher income-tax rates for top earners but include breaks for lower- and middle-class workers; increase the state sales tax from 5 percent to 6 percent; and expand that levy to cover computer services, a step that business groups contend will be difficult to enforce.

COLUMBIA, S.C. -- Republican presidential candidates found their conservative credentials under fire last night in a spirited debate that probed their different backgrounds on such issues as abortion, gun control and taxes. Their records came into play after most of the candidates worked to court conservatives by stressing their support for the U.S. effort in Iraq, condemning Democratic proposals for withdrawal, and vowing to rein in federal spending that soared under their own party's rule in Washington.

ARLINGTON, VA -- Democrats think they have found their deliverer. He is the new governor of Virginia, Timothy Kaine. So confident are they that Mr. Kaine can lead them to the electoral promised land, they have tapped him to deliver their party's response to President Bush's State of the Union speech. Given the threats posed by foreign and domestic terrorists, Democrats risk exposing Mr. Kaine as an inexperienced lightweight who is not in the president's league of knowledge and experience.

WASHINGTON - For the past three years, the federal budget surplus has been a sketch pad for the dreams of politicians, promising progress on an array of initiatives by both parties. But substantial portions of the projected surplus have been set aside, first for reducing the national debt and then for the tax cut that Congress is sending to President Bush. When the price tags of all the additional programs planned by one party or the other or both are tallied, a funny thing turns out to have happened to the surplus: Before it materializes, it has been largely parceled out. Doubt remains whether the windfall will appear as forecast, especially given the shaky state of the economy.

The General Assembly will not cut income taxes this year despite having a $1 billion surplus, key lawmakers said yesterday. They said the state should instead spend its riches on education and other priorities. Their assessment came after state officials announced that Maryland's fiscal picture -- while still rosy -- isn't getting any rosier. The release of revenue projections for the next few months dashed any remaining hopes to cut income taxes this year. "You can't spend and cut at the same time.

During her 16 years in the Maryland General Assembly and as a gubernatorial candidate in 1994, Republican Ellen R. Sauerbrey was rarely shy about calling for tax cuts and reducing the size and reach of state government.Today, in her second run for the governor's office, Sauerbrey has recast her positions -- sounding more and more like her rival, Gov. Parris N. Glendening.She is still promoting hundreds of millions of dollars in tax cuts -- but her proposals for shrinking state government have vanished.

It's as true in life as it is in business: Nothing ever stands still. Regardless of how things appear, they're always moving forward or backward, getting better or getting worse.And here's another truism: In order to keep important things (or governmental services) moving forward and getting better, we must be prepared to either spend more money or provide the services in a much smarter, more economical way.Finally, we arrive at the ultimate governmental truism for modern day Baltimore County: Our citizens are already contributing the maximum they can contribute for the services they need.

WASHINGTON -- Maryland congressional Democrats may be singing the blues after a lobbying group parodied them in song Friday as Congress' biggest spenders, but even the most thrifty Republican from the state could do no better than a "B".The National Taxpayers Union gave all six Maryland Democrats in Congress an "F" letter grade for voting against spending cuts and for tax increases in 1993.In the report, Democratic Sen. Barbara Mikulski was rated the eighth biggest spender in the Senate, while Democratic Sen. Paul Sarbanes was 18th.

THE CATO Institute, a conservative think-tank that believes the only good government is one that cuts taxes and spending simultaneously, has rated the nation's governors. Not surprisingly, our governor, William Donald Schaefer, gets an overall grade of C. Here's why:"Schaefer may have made the biggest mistake of his 40 years in public office two years ago when he rammed a major tax increase through the state legislature. That tax hike included higher income tax rates on the rich, a gas tax increase, an expanded sales tax, and a doubling of the cigarette tax."