Miller: Special session should include tax hikes and pension shift
Sen. President Thomas V. Mike Miller made a pitch this week to use the upcoming special session to erase the state's structural deficit and solve a persistent funding transportation funding problem.
To achieve the goal Miller floated one of his favorite budget policy ideas: Shifting the costs of teacher pensions to the counties.
The idea is one that terrifies county leaders since it would add a new burden to their already strapped budgets. Miller suggested making up the difference with new taxes and tackling the transportation issue with "greater contributions from the users and the beneficiaries of our public infrastructure."
In a letter he sent Monday to Gov. Martin O'Malley and all 188 members of the General Assembly, Miller called moving the pension costs "good fiscal and public policy" and pointed out that if the locals paid the full amount -- $1 billion -- the state's structural deficit would no longer exist and the state could "finally talk about what we can do to best position Maryland's future in the new economy."
To achieve the goal Miller floated one of his favorite budget policy ideas: Shifting the costs of teacher pensions to the counties.
The idea is one that terrifies county leaders since it would add a new burden to their already strapped budgets. Miller suggested making up the difference with new taxes and tackling the transportation issue with "greater contributions from the users and the beneficiaries of our public infrastructure."
In a letter he sent Monday to Gov. Martin O'Malley and all 188 members of the General Assembly, Miller called moving the pension costs "good fiscal and public policy" and pointed out that if the locals paid the full amount -- $1 billion -- the state's structural deficit would no longer exist and the state could "finally talk about what we can do to best position Maryland's future in the new economy."
In 2010, the Senate passed a measure that would have eventually moved $337 million in pension costs to the counties, but it died in the House. Speaker Michael E. Busch has repeatedly said that his chamber does not have the votes to make the pension changes.
O'Malley flirted with the idea of off-loading pension costs this year, but decided to table the issue until the General Assembly cut benefits to make the retirement plan more sustainable.
Most of the talk about the special session, which has to be called so lawmakers can approve a new map for congressional redistricting, has focused on fixing the transportation trust fund. That fund is separate from the state operating budget. It pays for improvements to roads, bridges and trains.
A Blue Ribbon Commission Report on Transportation Funding published earlier this year estimated that an extra $800 million is needed for state projects. Ideas to raise money include:
* Increasing the current 23.5 cent per gallon tax on gas. Each penny increase equals $32 million in revenue for the state. Speaking at a Chamber of Commerce dinner recently, O'Malley said that he does not like relying solely on a "traditional" gas tax increase because the revenue stream will decrease as cars become more fuel efficient and people use public transportation.
* Index the gas tax to the Consumer Price Index (O'Malley has previously tried and failed to index the tax to the Construction Price Index). This could raise $66 million for the state according to the report.
* Apply the 6 percent sales tax to the purchase of gas (this would be on top of the 23.5 cent tax.) It raises $580 million.
* Increase fee for vehicle emission testing from $14 to $24, a change that would raise $15 million for the state
O'Malley flirted with the idea of off-loading pension costs this year, but decided to table the issue until the General Assembly cut benefits to make the retirement plan more sustainable.
Most of the talk about the special session, which has to be called so lawmakers can approve a new map for congressional redistricting, has focused on fixing the transportation trust fund. That fund is separate from the state operating budget. It pays for improvements to roads, bridges and trains.
A Blue Ribbon Commission Report on Transportation Funding published earlier this year estimated that an extra $800 million is needed for state projects. Ideas to raise money include:
* Increasing the current 23.5 cent per gallon tax on gas. Each penny increase equals $32 million in revenue for the state. Speaking at a Chamber of Commerce dinner recently, O'Malley said that he does not like relying solely on a "traditional" gas tax increase because the revenue stream will decrease as cars become more fuel efficient and people use public transportation.
* Index the gas tax to the Consumer Price Index (O'Malley has previously tried and failed to index the tax to the Construction Price Index). This could raise $66 million for the state according to the report.
* Apply the 6 percent sales tax to the purchase of gas (this would be on top of the 23.5 cent tax.) It raises $580 million.
* Increase fee for vehicle emission testing from $14 to $24, a change that would raise $15 million for the state
Comments
Closing down the pension system in the state is what would 'best position Maryland's future in the new economy.' Not shifting the burden to the counties.
Posted by: Dave | May 11, 2011 5:18 PM
I favor the unmentioned fund-raising alternative of reestablishing the millionaire's income tax bracket. Why should we regressively punish people who need their automobiles to get to work or the grocery store.
Posted by: Ken Stevens | May 11, 2011 5:48 PM
Lets see, we need 800 million dollars to fund all the state transportation projects. Over the past 10 years, our governor's have raided the transportation trust fund to the tune of a billion dollars. So I say, stop stealing the money that is supposed to go to transportation projects. We don't need more taxes, we need more accountability from our elected leaders.
Posted by: Greg | May 11, 2011 9:47 PM
Ridiculous.
MOM pillors Ehrlich for raiding the Transportation Fund in 2006 and now MOM drains it during his first term in office due to his own fiscal incompetence and overspending. Now, in 2011, we the citizens of the Free State-have to foot the bill to replenish the fund that MOM so foollishly drained!
Once again we have to pay for THE SUN
's hero incompetence.
News flash this state is just too dam expensive to live in for the average citizen, especially for us lucky citizens who reside in Murdermore aka Baltimore.
This state needs an enema.
Posted by: john | May 12, 2011 12:28 PM
Special education may have its use for some students like the mentally retarded, deaf, blind and speech impaired. But hundeds of millions are spent by the state for "learned disableed: a vague term that often means the kid has attention problems, is restless or can' t work at a grade level pace. Simplified lessons and small classes are then given these kids, who also sit in regular classes where most are either annoyances, fall asleep or simply get poor grades. Like many students not so richly subsidized by the taxpayers. Independent review is needed of this and other costly programs(like the politically motivated "ESOL" for students who don't have English as a "first" language).America's greatest years, sixty and more years ago were when such programs didn't exist , we had immigrants who spoke no english, but whose kids went to school and were immersed in English. And most graduated HS with better language skills than today's watered down college kids of all backgrounds. Medicaid also is much too easy to qualify for. The big spending tickets of education and health get no periodic review for quality by spendicats who pander to the lobbies for teachers, spec ed, nursers, social workers and immigrants, legal and "otherwise". Not a penny more for any tax until current major spending categories are thoroughly reviewed. This is a task for which our Assembly and Governor are utterly unsuited due to their political debts. So no new taxes. tlkeoo e nmeri
Posted by: didactic1 | May 12, 2011 4:24 PM
The millionaire's tax actually lost money and resulted in $1 billion of the state's net tax base fleeing to other more hospitable climes. There was a reason it was allowed to die without a lot of fuss. Montgomery County was especially glad to see it go, since their county budget suffered immensely under this tax.
Posted by: Ron | May 18, 2011 9:54 AM