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  • Analysis of Sauerbrey's tax plan
  •   Glendening Talks About Economics

    Parris N. Glendening
    Parris Glendening
    (File Photo)

    July 10, 1998

    The following is an excerpt from a conversation between Gov. Parris N. Glendening (D) and Washington Post reporters and editors.

    Q: Governor, ... It's an issue which is coming up in the campaign: economic development. And you've been touting how well Maryland is doing ... but if you look just across the border in Virginia, ... most of the indicators suggest that Maryland's neighbor is doing better economically. And I'm wondering if you have any thoughts about why that is, and do you agree with some businessmen who say that Maryland's economic climate is just not as favorable?

    A: Got all kinds of high tech firms flocking to Maryland and a lot of head to head battles. We're winning them straight out, where there's heavy industry, like the tough competition for the new Bethlehem Steel plant in which they decided to build a new $300 million plant in Maryland, in Baltimore at Sparrow Point.

    Bechtel is another one, Bechtel Corporation. Tough competition where they wanted to [go], they were trying to lure them to Virginia. And so you go through all these, we're winning head to head on many of them. ... I keep hearing people say Virginia this, Virginia that. They may want to go run for the governor of Virginia, I'm running for governor or Maryland, and I am proud of what we're doing in Maryland.

    Our economy, by almost every assessment, is the best it has been in well over a decade. Our unemployment rate is at a nine-year low. Our family income has now moved up to the fifth highest in the country. Our personal income is up to the third highest in the country, we're fifth in the country, according to Dunn & Bradstreet, in the creation of new businesses. We have created now 130,000 jobs. These are dramatic and significant statistics.

    Now, someone says, well you know we can do more. We can do more. And I think you also have to raise some other questions. We've been pretty strong on some of our environmental rules. I intend to continue that. Some of the environmental waivers that I hear people talking about would be very destructive for the [Chesapeake] bay and for some other areas.

    We've also got to pose I think a reasonable question: How much growth is reasonable in terms of what can be afforded on the infrastructure and the quality of life? I want to make sure that everyone is fully employed, I want to make sure that families and individuals have opportunities and clearly that's where we are. But you know growth just for the same of growth I think there's some limits to this and I think we've got to be reasonable in terms of what we're doing.

    I would also add that when you think about where we are, we are investing clearly for the economy of the future. Clearly. I mean our efforts on education, on work force training, on high technology centers, these are jobs of the future and these are the ones we're winning more often than not.

    So I would urge people to get off of, you know I get these different comparisons all the time and I was wondering if everyone's so excited what's happening elsewhere, why are they running for the governor of Maryland. I know someone you know took offense that my conduct was, they said well we can do a lot more, a lot more if we lowered taxes further.

    We've reduced 10 percent income tax already and 15 other taxes for a $2.2 billion reduction over a five-year period. Well, if lower taxes are the only thing counted – and I've said this before – but if lower taxes are the only thing that counts then everybody would be moving to Mississippi. And it's not just about lower taxes.

    It's about the quality of life, it's about investment in education and it's about some reasonable balance between a tax burden and expectation of services including education. And I'm very pleased what we're doing in Maryland is consistent with the commitments that I made and is consistent, I think, with where we should be in position in this state for the next century.

    Q: Governor, Ellen Sauerbrey says that taxes, specifically income taxes, can be cut more. Are you saying that the state is where it should be in terms of after the 10 percent goes through in terms of taxes or would you like to see further income tax reduction?

    A: I'm saying now, as I did last time and as I did throughout the four years, that all of this comes down to a matter of setting priorities and being responsible and balanced. By that I mean it would have been irresponsible to come in, especially in those first two years, and cut taxes and cause huge cuts in services or education or whatever is appropriate.

    And we resisted that until the economy got much, much better and that's why, we made some business tax cuts to make us more competitive but that's why the income tax cut went through this last year and went through, I believe, in a moderate and responsible way. I think our obligation in the future is first to make sure that we are meeting very important crucial needs for the state and needs both in terms of positioning us for the future, including most poignantly education K through 12 and higher education, as well as important human needs.

    Now I may be one of the last, I'll use the word progressive, progressives left on this earth but I happen to believe that there are still a huge number of needs out there that we can offer help that do involve resources.

    Just as an example, in this last session, I was very pleased that we were able to get our children's health program through. That of course took about $30 million of state money to match the federal. I was very pleased that we got a program to eliminate the disabilities waiting list for the adult children with disabilities like Downs Syndrome and so on, that is a $75 million cost total. I was very pleased that we were able to do some significant expansion of education funding, particularly targeted for at risk children.

    Now these are important, important considerations. I think in some ways perhaps it would have been easier to say oh let's go for a bigger tax cut and look at how people will be politically receptive to that. First of all, I'm not sure they are.

    I think people understand what these needs are all about, but secondly I think we need a responsible government but we also need a compassionate government. And if we can afford to help people from off of the disabilities list or we can afford to help cover children in working families who don't have health coverage, then I think we ought to do it.

    And so I will do in the next four years, voters willing, what I did in the last four, and that is I'll weight the relative merit – and I can tell you straight out my No. 1 priority is going to be to continue to focus on the progress of education and that will take some additional resources, and I think by hanging tough on that issue the state of Maryland collectively and Marylanders individually will be far, far better off at the end of that four year period as we go into the next century than simply by slashing some additional revenue sources.

    Now I know it was a long way to get around it but it's not as simple as saying I'd cut taxes more.

    Did you see the explanation in the Baltimore Business Journal about how she was going to pay for those additional cuts? Do you have that with you?

    Well she was asked. Baltimore Business Sunday Journal, we'll get this to you. We'll get this. It's beautiful. She said yes, I'll cut income tax more. They said well how would you pay for it? Would you cut people? She said no.

    And they said well would you cut programs? And she said no, because this is the new fluffy moderate position. And they said well how would you pay for it? And she said, well you know-and I'm telling you it's the honest truth, I'm going to fax it over to you this afternoon-she said in Texas, for example, they found that they could save a lot of money on their faxex by putting stick 'ems on instead of covering that extra sheet, and if you take your faxes and use stick 'ems instead of the cover sheet you can save considerable money and be able to cut taxes. Now I'm telling you, that's what the explanation was.

    Now I'm trying, the reason I went into a longer explanation, I'm trying to be reasonable and balanced and reasonable and balanced says to me we take care of our real priorities first, which is education. And, secondly, I'm in this position not for the fun of it but I'm in this position because I care that we do have responsibility and compassion. And I'm going to fund those programs first.

    © Copyright 1998 The Washington Post Company

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