O'Malley and Ehrlich square off again at noon
When Maryland's two gubernatorial candidates face each other in Washington, DC today for their second (and likely last) televised debate there is one charge we feel confident that we'll hear: Gov. Martin O'Malley is responsible for the largest tax increase in Maryland history.
It's been a favorite line from former Gov. Robert L. Ehrlich, Jr., who uses it to remind voters of a 2007 package of tax hikes the governor passed during a 2007 special session that raised roughly $1 billion new new revenues. Ehrlich frequently says a second O'Malley administration will mean another major increase.
The claim has thus far gone undisputed by the O'Malley camp, which would prefer to focus the conversation on the governor's eight trips to the Board of Public Works to cut budgets mid-year.
But a review of Maryland tax history shows that, at least by some measures, there was a tax increase even larger than the one O'Malley passed. One must travel back to 1967 when the state instituted a graduated income tax. Ironically enough, the man responsible for it was Republican Gov. Spiro Agnew.
To be clear here we are not quibbling with Ehrlich's characterization O'Malley's increase on its face value. O'Malley's package raised $1 billion in today's dollars and Agnew's change raised $120 million in 1967. Even when Agnew's figures are inflation adjusted (according to this Internet calculator) they still don't top O'Malley's figure.
But when comparing tax increases historically, the state's economists look at the impact on a per capita basis: Agnew's increases came in at $203 per person in today's dollars. O'Malley's are $179 per person, according to the Department of Legislative Services.
Tax increases are also measured as a percentage of the state's revenues. The 1967 tax increase jacked up state general fund revenues by 26 percent, accord the DLS. The 2007 increases added a 5.8 percent increase to state revenues, says DLS.
It's been a favorite line from former Gov. Robert L. Ehrlich, Jr., who uses it to remind voters of a 2007 package of tax hikes the governor passed during a 2007 special session that raised roughly $1 billion new new revenues. Ehrlich frequently says a second O'Malley administration will mean another major increase.
The claim has thus far gone undisputed by the O'Malley camp, which would prefer to focus the conversation on the governor's eight trips to the Board of Public Works to cut budgets mid-year.
But a review of Maryland tax history shows that, at least by some measures, there was a tax increase even larger than the one O'Malley passed. One must travel back to 1967 when the state instituted a graduated income tax. Ironically enough, the man responsible for it was Republican Gov. Spiro Agnew.
To be clear here we are not quibbling with Ehrlich's characterization O'Malley's increase on its face value. O'Malley's package raised $1 billion in today's dollars and Agnew's change raised $120 million in 1967. Even when Agnew's figures are inflation adjusted (according to this Internet calculator) they still don't top O'Malley's figure.
But when comparing tax increases historically, the state's economists look at the impact on a per capita basis: Agnew's increases came in at $203 per person in today's dollars. O'Malley's are $179 per person, according to the Department of Legislative Services.
Tax increases are also measured as a percentage of the state's revenues. The 1967 tax increase jacked up state general fund revenues by 26 percent, accord the DLS. The 2007 increases added a 5.8 percent increase to state revenues, says DLS.
Agnew's plan was one of the few major overhauls to the tax code and created an graduated tax rate that varied from 2 percent to 6 percent depending on income. It also allowed counties to levy their own piggyback tax.
According to the tax scales, which were helpfully reprinted in The Baltimore Sun at the time, those making more than a whopping $6K a year got stuck on the high end and had to fork over 6 percent to the state. Agnew, in a April 16, 1967 Sun story hailed tax changes to the tax code "enlightened" and "progressive."
So called "tax dissidents" sued the state, the law was appealed to the highest court, and found constitutional. A rally in Annapolis billed to draw tens of thousands of angry taxpayers only netted about 50.
According to the tax scales, which were helpfully reprinted in The Baltimore Sun at the time, those making more than a whopping $6K a year got stuck on the high end and had to fork over 6 percent to the state. Agnew, in a April 16, 1967 Sun story hailed tax changes to the tax code "enlightened" and "progressive."
So called "tax dissidents" sued the state, the law was appealed to the highest court, and found constitutional. A rally in Annapolis billed to draw tens of thousands of angry taxpayers only netted about 50.
Comments
Bob Ehrlich has been attacking Gov. O'Malley for three years over tax increases, but all Mr. Ehrlich has offered is an empty campaign promise to roll back the sales tax increase without a plan to cut spending or replace the revenue he would forfeit.
Mr. Ehrlich's only spending cut proposal is to cut public school funds for Baltimore, Montgomery County, and Prince George's County. Those cuts would hurt education, but they wouldn't come close to offsetting a sales tax rollback.
Bob Ehrlich raised revenue $3 billion, and Gov. O’Malley raised revenue $3.6 billion. Mr. Ehrlich’s figure includes a $188 million HMO tax enacted over his veto, and Gov. O’Malley’s figures includes $146 million in slots revenue, but if Gov. O’Malley’s tax increases were "the biggest in state history," as Republicans often say, Bob Ehrlich’s tax increases were a very close second.
The difference is Gov. O'Malley tells the truth about his record while Mr. Ehrlich lies.
Twice Mr. Ehrlich told reporters on video he didn't raise taxes, but the truth is he raised property taxes 57%, and he broke his campaign promise not to raise income taxes when he sneakily eliminated tax deductions in 2004 and 2005. By eliminating deductions, he raised income taxes.
Worst of all, Mr. Ehrlich claimed in Monday's televised debate the he wasn't responsible for his 57% state property tax increase in 2003 because it was raised by the Board of Public Works. He must think viewers are pretty stupid. As governor, he chaired the three-member Board of Public Works that approved the property tax hike, it was his own proposal, and of course he voted FOR it.
Mr. Ehrlich needs to tell the truth about his tax and spend record.
- Steve Lebowitz, Annapolis
Posted by: justdafacts | October 14, 2010 10:54 AM
Bob Ehrlich is obviously an unstable candidate. Clearly he is more suited to sitting behind the friendy microphone of WBAL and insulting O'Malley like he has the past several years.
Bob Ehrlich is unfit to serve as Governor.
Posted by: Anonymous | October 14, 2010 1:16 PM
Read the article Setve, Agnew comes in second. As for the Education Funding? Mr. O'Malley ONLY funded the Geo Index in 2008 because he expected 200 million from the closed door, dead of night, weekend, taxfest, IT service 'sales' tax. Which COST Maryland 80 million in lost taxes as those in the industry re-incorporated in Delware. Mr. O'Malley would NOT have funded it in the last two years if the FEDS hadn't passed out A huge amount of Stimulus Bucks. Mr. O'Malley raaided the Rainy day fund, and hasn't replenished it, and has raised taxes tremndously, just WHO is tax and spend? The Poroperty tax increase? Had to happen, has Mr. O'Malley recinded it ? No.
As for false claims, in conversation with Mr. O'Malley's campaign office, I was told that Mr. O'Malley vetoed the IT Tax, a compelet falsehood, he signed it April 2008. Mr. O'Malley is no MORE truthful then Mr. Erlich.
Posted by: Michael | October 14, 2010 5:36 PM
Annie,
As an independent who is still deciding their vote, I find your articles and blogs to generally be very bias against Ehrlich. You do a lot of, "Ehrlich said this, which is true, but.." Reporters should report in an unbias fashion. Unless you come out and say you are in favor of O'Malley so people are aware, please try to be more neutral. I voted for O'Malley last time and do not plan to this time, but I do not appreciate the Sun being so bias.
Posted by: Bias | October 15, 2010 11:32 AM