Slots And Taxes In Maryland Politics

Posted on March 16, 2008


The gathering economic storm is having its effect on Maryland. State revenues are suffering in the recession, forcing the General Assembly to revisit taxes and slots.

The typical Maryland family, already stressed by electricity prices, is now juggling higher food and gasoline prices, credit card debt, and falling real estate values. People respond by eating at home and driving less. Two-car families use the sedan and leave the SUV in the driveway. The two-SUV family with an underwater mortgage is in trouble. Unemployment is spreading among construction workers, restaurant workers, car-salesmen and Realtors.

In such a climate, it’s understandable that many legislators suffer from Paranoid Tax Anxiety Syndrome. Last week, Senate President Mike Miller and the Senate turned back, for the time being, an effort to repeal the sales tax on computer services. But the tax remains highly unpopular among (guess who) computer service business owners.

Sen. Verna Jones (Baltimore) proposed a bill to slightly increase income tax rates for the wealthy. Jones proposed to raise the income tax from 5.5 percent to 6 percent for taxpayers earning $750,000 a year, and to 6.5 percent for those earning $1 million a year or more. Her intent was to shore up state revenues, but opponents of the computer tax seized on the income-tax increase as a handy alternative.

Gov. Martin O’Malley weighed in against the computer tax and in favor Verna Jones’ progressive income tax proposal. Sen. Ulysses Currie (Prince Georges County), chairman of the Senate Budget and Taxation Committee, supports Jones’ income-tax bill as well. But Mike Miller and others cautioned that it will be hard to find a majority of legislators willing to support any new tax.

The all-Democratic Montgomery County delegation is a disappointment. Many in the delegation are afraid to support either the computer tax OR the income tax on the wealthy. Some Montgomery County lawmakers don’t understand that the vast majority of voters are not in the over-$750,000 bracket.

When push comes to shove, why is it always more expedient for Maryland lawmakers to shelter the rich and tax the poor?

Slot machines in Maryland would be an unjust tax on the poor, the middle class, and senior citizens. But the spread of Paranoid Tax Anxiety Syndrome helps slot machine proponents. Lawmakers panicked by taxes embrace slots as the solution to Maryland’s fiscal problems. O’Malley, once a luke-warm supporter of slots, is on board. Even the Maryland State Teachers Association is supporting slots. Never mind that the social costs of slot machines would more than offset the revenue.

It’s good that support for slots is peaking in March. It gives voters time to come to their senses before the November referendum. By then, we’ll know whether financial problems have created a Perfect Economic Storm.

By November, the storm may have blown over, and the recession may be easing. Or not. You can’t predict the future. At least I can’t. — Bernie Hayden