Last week, Maryland Gov. Martin O’Malley (D) unveiled his fiscal 2013 budget. As with all prior years, O’Malley had to deal with a structural deficit — this time amounting to roughly $1 billion of the budget’s $14 billion total. With the exception of a 2007 special session, O’Malley has opted to bring the budget into balance every year through spending cuts and one-time transfers from special funds. Even in the 2007 special session, the $800 million in new revenue generated by taxes on businesses and individuals were coupled with $500 million in spending reductions. All told, O’Malley has cut spending by $7.5 billion during his tenure — a commendable accomplishment during very lean times.
For fiscal 2013, O’Malley continues to make cuts — roughly $600 million to $800 million, depending on how you do the math — but decided the time was right for more tax increases, as well, which O’Malley describes as a balanced approach. I do not disagree with the need to consider additional sources of revenue, but unfortunately O’Malley’s concept of “balance” is anything but balanced. O’Malley proposes capping deductions for singles making more than $100,000 and couples making more than $150,000. Estimates are this would impact the top 20 percent of wage-earners in the state — so this tax increase is not targeted at the top 1, 5 or 10 percent. It hits deeply into the middle class in a very high cost of living state.
The capping of tax deductions is not the worst offender, however. Though the income-tax provisions would work to make Maryland’s income tax structure more progressive (a good thing), it is offset by several proposals that would be especially harmful.
[Continue reading Todd Eberly’s post at The FreeStater Blog.]
Todd Eberly blogs at The FreeStaterBlog. The Local Blog Network is a group of bloggers from around the D.C. region who have agreed to make regular contributions to All Opinions Are Local.