Maryland Pays for Tax Hikes with Later COGD

Center for Fiscal Accountability ^ | 2011-08-21 | Jacob Feldman

[92nina]

...In eight of the last ten years, between fiscal years 2002 and 2011, Maryland legislators have increased taxes. These taxes total $3.37 billion – a $587.70 tax hike on each man, woman, and child in the state. These taxes are used to increase state spending programs and do not even include how local governments also increase the tax burden. Future taxes are lined up as commuters and truckers cope with another alcohol tax that began on July 1 and significant state toll increases.

State spending continues at unsustainable levels that produce deficits for the state. Thanks to the state’s spending policies, Maryland faced a $1.6 billion budget gap at the end of the 2011 fiscal year – its only response was to increase taxes and grow future unfunded liabilities. Knowing full well the state lacks the assets to make good on their unrealistic public pension promises, Maryland continues to use unrealistic return rates to project solvency that will not be possible with its current liabilities. One reform in the FY 2012 budget was to require government employees to contribute an extra two percent of salaries to the pension fund. Unfortunately, two-thirds of the revenue would be diverted to the general fund, rather than asset investment for pension funds. Marylanders will suffer late Cost of Government Days in the future if their elected officials continue to refuse responsibility for the looming liabilities they have created.

Local spending in Maryland has been problematic too. According to a Maryland Public Policy Institute Report, Baltimore has increased real spending by 26 percent in the last decade even while the population shrunk 5 percent. Baltimore residents suffer discriminatory excise taxes, such as the bottle tax, to continue to fund this bloated government...

[92nina]

Maryland “celebrates” its Cost of Government Day eight days after the national average of August 12.

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