Gov. Martin O’Malley (D, MD) proposes raising taxes on poor, homeowners.


If you’ve haven’t taken a look at Gov. O’Malley’s proposed Maryland budget yet, do so – and weep. There’s enough idiocy in it for everybody to get a piece: more taxes for the poor (in the form of increased tobacco taxes*); more taxes for homeowners (caps on mortgage deductions) and other wealthy members of the upper professional class (caps on charitable deductions); and, of course, an Amazon tax (because this time Amazon.com simply won’t drop its affiliate program in Maryland in response, surely**). But here’s the hidden time bomb:

In what O’Malley called one of his most “controversial” proposals, he recommended shifting half of the state’s $946 million tab for teacher pension costs onto the counties.

To help ease the pain of the shift, the state would pick up half of teachers’ Social Security costs, which the counties pay for entirely.

The change would save the state $239 million.

Annnnd it will cost county governments an extra, oh, $239 million or so. You think that the state is planning to lower statewide tax rates to reflect the savings? No, neither do I. You think that Maryland’s county tax rates are going to go up to reflect the increased tax burden? Why, yes, so do I. Did Governor O’Malley just tell Maryland voters that he’s planning to put them on the hook for guaranteeing teacher pensions? He sure did! Mind you, there’s a real problem with the way that education is funded in Maryland, as can be seen by the way that everybody involved busily tries to blame everybody else. Still, there’s a point where you have to stop handing off the problem, and, well, fix it.

All in all, I can’t wait to see O’Malley’s new Cato ranking. I suspect that his 2010 B isn’t going to be replicated.

Moe Lane (crosspost)

*He’s also planning to introduce another gasoline tax, of course.

**Full disclosure: I am an Amazon.com affiliate for Maryland. Who, thanks to Governor O’Malley, is apparently at risk of losing that revenue stream completely.



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2 Comments Leave a comment

I was wondering why you mentioned the Amazon bit...

nathanalbright (Diary) Tuesday, January 24th at 10:57PM EST (link)

…but the footnote explains all. I don’t fundamentally have a problem with states raising the taxes on the poor (cigarette taxes don’t bother me in the slightest–I’m smart enough not to smoke), after all, one of our goals is to get people with “skin in the game,” it’s just that taxes for cigarettes and other items tend to become part of the “price of the product” and don’t really attract the same sort of anger that seeing money taken out of one’s paycheck to pay for social security or Medicare does for someone who knows he will never see that money for himself.

 

O'Malley's new revenue stream.

naraht Wednesday, January 25th at 12:38AM EST (link)

Maybe he expects the counties to pay for the pensions with the extra marriage license fees paid by Gay and Lesbians rushing to get married…

Maryland is somewhat schizo when it comes to Tobacco. One of the larger tobacco producing states with one of the higher taxes on Tobacco.(Currently in a tie for about 10th through 15th) (And one of the most anti-tobacco counties that you’ll find on the east coast south of NJ)

I’m surprised the teacher pensions were with the state in the first place, a teacher is hired by a particular county, not the state.