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This election is about economic recovery, job growth, taxes, our state's budget,
and the federal budget deficit. Please review my discussion of these issues
below. I welcome your input and comments on these
issues.
Economic Recovery and Growth in Maryland
Maryland competes with other states for private sector jobs. Unfortunately,
however, Maryland has a very unfavorable climate for business, making it
difficult for us to compete. One sign of this is Northrop Grumman's recent
decision to locate its headquarters in northern Virginia, instead of Montgomery
County. CNBC recently released a report comparing the 50 states on numerous
characteristics. It found that Maryland was ranked 42 out of 50 in terms of the
cost of doing business, which is obviously a very poor ranking. Maryland ranked
even worse at #45 in terms of the cost of living. Finally, Maryland was ranked
27th in the country in terms of the cost of doing business overall. Virginia, by
comparison, was ranked #1 on the overall cost of doing business. It is obviously
very difficult for us to compete with #1! Maryland's income tax rates and
corporate tax rates are above Virginia's. Maryland taxes estates and
inheritances heavily; Virginia repealed its estate tax several years ago and has
no inheritance tax. Where would you locate or expand a business if you could
choose among the two? Not surprisingly, Fairfax County has a lower unemployment
rate than Montgomery County and a higher per capita income. We need to reduce
Maryland's corporate and income tax rates and raise the threshold for estate
taxes so that we can compete and capture a greater share of the Washington
area's job growth. This is essential if we are to maintain and grow our tax base
over time.
Read More on This
Issue ...
Maryland's Budget
Maryland's Constitution requires the state to have a balanced budget (Article
III, Section 52). Even so, Maryland has a large structural budget deficit.
Unlike the federal government, with its massive annual budget deficit of
approximately $1.6 trillion, Maryland's funding of its day-to-day operations via
debt is hidden. The state should have contributed $2.2 billion to its pension
program during the fiscal year ended June 30, 2009, but it only contributed $1.3
billion. The $900 million shortfall is a burden our children will have to bear
when pension payments come due. Underfunded pension contributions force future
generations to pay our current expenses. The state's pension fund is now
underfunded by a total of $33 billion (see The Frederick News-Post, May 26,
2010).
Maryland needs to shift its pension programs from defined benefit to defined
contribution plans, which has been done all across the private sector. We will
not be able to borrow from future generations if we must pay for our current
employee costs now. We need to reduce spending. Maryland's Medicaid program has
one of the lowest rates of generic drug utilization in the country, wasting
millions of dollars annually. About 61% of Maryland's Medicaid prescriptions
were generic in 2009. By comparison, Virginia, Minnesota, and Oregon were at
71%, and others, like Massachusetts, were at 76%. Why should Maryland taxpayers
spend $200 for a prescription if $20 will suffice? Increasing Maryland's generic
drug utilization by 10 percentage points to match Virginia and other states
would save Maryland over $31 million annually, and matching Massachusetts would
save $46 million annually. Maryland should stop funding stem cell research.
Given a choice of spending money on medical research or education, Maryland
should focus on the core state responsibility of education and leave medical
research to the federal government and the private sector.
Read More on This Issue ...
The Federal Budget Deficit
The size of the massive federal budget deficit makes clear that our current
leaders in Washington do not have the political will to tackle our country's
massive fiscal problems. The deficit has grown under both Republican and
Democratic leadership, and the deficit has exploded to unimaginable heights in
the past couple of years. Our constitutional system of government includes many
checks and balances. One check and balance is the ability of State Legislatures
to propose amendments to the U.S. Constitution. Under Article 5 of the
Constitution, if two-thirds of State Legislatures request an amendment to the
Constitution, Congress must call a convention to propose such an amendment. Any
proposed amendment must then be ratified by three-fourths of the states, which
is the usual requirement, before it takes effect. I have proposed an amendment
that requires Congress to take multiple votes over time to increase the deficit
and limits the federal government to deficits that are no larger than 4% of
gross domestic product. Most economists believe that the federal government
should run a surplus during periods when the economy is strong and a deficit
during times of recession. My proposal allows this flexibility while restricting
the size of any deficit to a reasonable level. This will force a change of
behavior in Washington. Every member of the House and Senate, and the
President's staff, will scour the federal budget for savings line-by-line
because they will be required to do so to maintain favored programs. Our system
does not provide sufficient incentives to spend public money wisely, and the
Maryland Legislature needs to play its role in solving this enourmous national
problem.
Read More on This
Issue ...
Transportation Issues
Congestion is now having strong, adverse effects on the quality of life in
Montgomery County. The intersection of Norbeck Road and Georgia Avenue, which is
near my home, at times has traffic back-ups that stretch a mile long. We have
needed a solution where Norbeck Road passes under Georgia Avenue for years now.
The problem at this intersection is repeated at many others in Motgomery County.
The only way we can solve our congestion problems is with a combination of road
and intersection improvements and additional mass transit, but mass transit
suffers from problems too. There can be no doubt that the quality of Metro's
service has declined significantly over the past few years. Trains are regularly
out of service due to mechanical problems. Metro has simply not maintained its
system at an acceptable level. We must fix the mass transit we have, and
additional mass transit is needed for our area. I am a supporter of the Purple
Line. The highways (I-270, I-95) and Metro's Red Line run north-south. It is
simply too difficult to travel east-west in our area. The Purple Line will help
with this, as will the eventual completion of the ICC, and hopefully these two
projects will permit the Beltway to serve more like a highway than a parking
lot.
The Purple Line, intersection upgrades, properly maintaining Metro's
infrastructure - all of this will cost money, at a time when Maryland's
transportation funds have been raided to pay for other things. We must fund
transportation improvements for our area. Infrastructure projects do not build
themselves. I would prefer to build these projects out of existing revenue
streams. If Montgomery Conty received a a reasonable portion of its state taxes
back, there would be sufficient funds to improve our transportation
infrastructure.
Read More on This Issue ...
Montgomery County's 18% Return on State Taxes
Montgomery County receives back only about 18% of the taxes we pay to the state.
That's right, we get only 18 cents on the dollar! This figure shows how
ineffective the County's Delegates and Senators have been in promoting the
interests of Montgomery County in the General Assembly.
During a Silver Spring Chamber of Commerce event on August 11, the moderator
asked those present to discuss whether we felt the County's return on state
taxes was sufficient. To my surprise, one of the incumbent Delegates told me
that she thought this number was fine because we are a wealthy county. Howard
County is similar to Montgomery County in terms of per capita income, but it
receives back a far larger share of the state taxes generated by it. The present
allocation of state resources is unfair, and yet our General Assembly Delegation
supports it!
There are plenty of uses in our area which would benefit from additional state
funds, including upgrading intersections that can't handle their traffic volume
and providing additional support to Metro so that it can maintain its
infrastructure. There are needs in Montgomery County, and our delegation in the
General Assembly must promote Montgomery County's interests. Does anyone in
District 14 think that it is reasonable for our area to get back only 18% of the
state taxes we pay?
Proposed Increase in Alcohol Taxes
I expect there to be many proposals to increase taxes on Maryland's residents
and businesses in the General Assembly's next session that starts in January
2011. One such proposal is being actively promoted already, even before the
election. The proposal is to increase Maryland's taxes on alcohol to support
state spending.
The backers of the proposal have trotted out numerous endorsements and a study
by professors at Johns Hopkins University in support of the proposal. I have
reviewed the Johns Hopkins study closely, and it suffers from several
methodological flaws. (Indeed, I have submitted two sets of questions to the
authors of the study and have only received partial responses to my first set of
questions.) The largest problem with the study is that it only attempts to
assess the benefits of the tax increase and the spending it will support. Policy
should be based on weighing the costs and benefits of proposals, and it is hard
to see how we can have any serious debate over this proposal if we disregard the
costs associated with it. There is little logic in considering only the benefits
in a cost-benefit analysis!
The proponents of the tax increase make the case that Maryland's alcohol taxes
are low in comparison to other states. If they are correct about this, then,
given Maryland's excessive tax burden overall, it would be much more sensible to
raise the tax on alcohol and use the revenue resulting from this tax increase to
cut the state's sales tax rate or increase the personal exemption in our state's
income tax system. The sales tax rate should be cut so that there is no overall
increase or decrease in tax revenues. A cut in the state's sales tax rate would
make it easier for families to make ends meet in these difficult economic times.
This would also be true for an increase in the personal exemption in our income
tax. I see little logic in having a tax system that treats alcohol more
favorably than school supplies. I do not support an alcohol tax increase if it
would increase the state's overall tax burden. Our tax burden is one of the
highest in the nation, and we cannot let it get any worse.
Views of Republicans and Democrats on Changes in Maryland’s Taxes
Views on the future of Maryland taxes are a fundamental point of disagreement
among the three Republican candidates for Delegate from District 14 on the one
hand and the eight Democratic candidates for Delegate on the other. These views
were made clear at recent campaign events.
All three Republican candidates agree that Maryland needs to reduce its taxes
overall. Maryland’s tax system is not competitive with other states. Our
corporate taxes, income taxes, and sales taxes are higher than those in
Virginia. Furthermore, Maryland has high estate tax and inheritance taxes.
Virginia, by comparison, repealed both its estate and inheritance taxes several
years ago. Delaware has lower income taxes and estate taxes, also has no sales
taxes. Overall, the Tax Foundation found that Maryland has the 4th highest
combined state and local tax burden in the nation. The only states with higher
combined state and local tax burdens are (in order) New Jersey, New York, and
Connecticut. (See
Tax Foundation data available here.) Simply put, Maryland is not competitive
with other states, and this is leading to erosion in our tax base. For example,
many high income Marylanders established residency out of state in response to
the “millionaires tax” imposed by the General Assembly in 2007, leading to a
decline in tax receipts from this group of people. This decline in revenue has
harmed both Maryland and Montgomery County, and the tax increase was
counterproductive and harmful.
My Democratic opponents disagree. They want to increase your taxes to
support expanded programs. This includes increasing income taxes, corporate
taxes, gas taxes, and alcohol taxes. This is not the right thing to do,
especially with many families seeing their income and wealth decline during the
recent recession.
Read More on This Issue ...
Support for Democracy
Regardless of individual views on specific issues, in our democracy, we must
support the right of the People to express their views on government legislation
and policy through the ballot box. In response to recent decisions to limit this
right, the Republican candidates from District 14 issued the following
statement:
The District 14 Republican Legislative Ticket has issued a statement in reaction
to the Board of Election decision not to allow petitions, signed by over 30,000
county citizens and voters, to put to a vote the recall of Bill #13-10, commonly
known as the Ambulance Fee Bill.
This is a violation of the spirit of the State Constitution and, more
fundamentally, of democracy. Citizens and citizen groups should be provided
every opportunity to recall legislation with which they disagree. This right is
enshrined in the State Constitution at Article 16, Section 1. Minor
technicalities in the election law should not stand in the way of the right to
vote on an issue when citizens, in good faith, have collected the signatures
required to place an issue on the ballot.
If elected in November we pledge to present legislation at the state level to
change the Election Law Article of the Maryland Code, Sec. 6-203, which mandates
signature duplication on petitions. We will also encourage local legislation to
allow legitimate petitions from citizens to be put on the ballot. The rejected
petitions would have put the issue of recalling the Ambulance Fee Bill before
the voters this November. In a democracy, we need to err on the side of putting
issues before the voters so that the citizens can decide matters using the
ballot box. This is a fundamental right of the People.
The Democratic Party leadership has, over the years, passed laws and instituted
fees against the people's will and hid behind technicalities, so they won't have
to face the citizens at the polls. They have the majority in Annapolis, and
could have changed the election law if they wanted to, but they didn't. It's
time for a change, for new voices. We say, "Let the people Vote!"
Education
Education Like everyone else in Montgomery County, I support having
award-winning schools. The school system is run locally by the Board of
Education and is funded primarily by local taxes. Nevertheless, the Maryland
state government has an important role to play in our schools. Innovation and
reform are needed in several areas.
First, we must improve the quality of the education our children receive. Of
course, family support is critical for students to be successful, but the
quality of instruction is also important. Many teachers are excellent at their
jobs, but some are not. Teachers must be effectively evaluated and, where
lacking, their skills must be improved. If a low-performing teacher's skills do
not improve, his or her instructional role must end - independent of whether the
teacher has tenure. Simply put, it must become easier to remove low-performing
teachers from the classroom. This is a component of the U.S. Department of
Education's Race to the Top program ("Removing ineffective tenured and untenured
teachers and principals after they have had ample opportunities to improve, and
ensuring that such decisions are made using rigorous standards and streamlined,
transparent, and fair procedures." (See Race to the Top Executive Summary at
page 9,
available here.) Teachers should not be treated differently than people in
other professions, and I support efforts to implement significant reforms in
this area.
Second, state-imposed Maintenance of Effort requirements must be rescinded.
Montgomery County's School system has faced the prospect of huge fines, which
would devastate our school system, due to our failure to meet state-imposed
Maintenance of Effort requirements in recent years. Given the importance of
education to residents of Montgomery County, I have faith that our local leaders
will devote the resources necessary to maintain our school system. In an
environment of diminished resources, the Maintenance of Effort rules mean that
reductions must come from other critical areas, such as public safety.
Furthermore, the rules penalize systems that increase their budgets because they
require the increases to be permanent. Simply put, the Maintenance of Effort
requirements are bad policy.
Third, we must support education innovation by having an effective program of
public charter school development.
Fourth, we must promote an environment where instructional time is valued.
Teachers are asked to do many things that distract from instructional time. The
state should discourage encroachment on the time devoted to effective student
instruction.
Finally, we must bring more of our state taxes back to support local needs,
including schools. As discussed elsewhere on this website, Montgomery County
only receives back about 18 ¢ for each dollar of state taxes we pay. Other
counties with similar income levels receive more money back from the state. This
is inequitable and unfair.
The Republican Pledge to Montgomery County
Twenty-two Montgomery County Republican candidates issued their joint "OUR PLEDGE TO MONTGOMERY COUNTY" outlining
their campaign platform.
The statement pledges to make Montgomery County more attractive to new job creators
and, to work to rollback tax increases. The pledge calls for Montgomery County to
receive a share of state aid more in line with other counties in the state. It also supports
increased government accountability by protecting the public right to referendum on
issues.
OUR PLEDGE TO MONTGOMERY COUNTY
We, the undersigned candidates for State and County offices from Montgomery County,
pledge to voters:
- We pledge to help make Montgomery County more attractive to new job
creators.
- We pledge to fight for equity for Montgomery County. Our county only
receives back about 18 cents on each dollar paid in Maryland taxes. We
pledge to bring more of your money back to Montgomery County to meet
local needs.
- We pledge to work to make Maryland competitive by rolling back the
State and County tax increases passed in 2007 and later, and also by
eliminating excessive and restrictive regulations.
- We pledge to support policies and legislation to create and sustain secure
communities to preserve and maintain Montgomery County's unique quality
of life.
- We pledge to support more accountable government, responsive to
citizens' concerns, including support of local democracy by enabling voters
to express their will at the polls by protecting their right of referendum and
written petition.
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