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What will Marylanders pay?

June 26, 2003

Once again money - and how much the state will send to local governments - is the issue likely to dominate the 2004 session of the Maryland General Assembly.

Without a significant upturn in the economy next year, the stop-gap measures most counties and municipal governments are using now to avoid tax increases are unlikely to be enough to get the job done.

Prior to the last election it was clear that even though state officials followed through on the final installment of a state income tax cut and promised millions more in aid to education, the reality was they were writing a check they didn't have the funds to cover.

The result? In the first year of the new administration of Gov. Robert Ehrlich, state property taxes were increased. In fairness to Ehrlich, even though state law required those taxes to be high enough to cover state bond repayments, cash for the general fund had been used during good times to keep those taxes artificially low.

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Ehrlich may get some help from a court decision that prevents some corporations from setting up subsidiaries in other states to shelter income earner in Maryland. Ehrlich didn't support a bill that would have done the same thing, preferring to let the court decide the issue.

But though he told an audience Tuesday that the state will get additional federal aid as a result of the federal tax cut, our understanding is that it's a one-time payment to compensate states whose tax rates are linked to the federal system's tax code.

Transportation cash for local governments has already been cut, which means that some way of replenishing that fund must be found, making a gasoline tax increase likely.

After that, the going gets tough. Ehrlich's first round of top-level hirings, some of political pals, puts the governor under pressure to deliver on his promise to streamline government. It's hard to ask folks to give up meat if you're munching on a steak.

Will people willingly pay more for services, as Frederick Mayor Jennifer Dougherty says? Now, before the 2004 session begins, is the time for Marylanders to express their opinions.

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