More Eyewash from O’Governor

Today’s Washington Post reveals that Governor O’Malley is not simply a taxaholic. He’s actually a very compassionate man who is deeply concerned about the plight of the working man. So much so that he’s considering a tax cut as part of his budget plan.

Maryland Gov. Martin O’Malley is angling to cut state property taxes and expand a tax credit that helps lower-income workers at the same time that he and lawmakers prepare to raise other taxes to close a looming $1.5 billion budget shortfall, according to several people familiar with his plans.

The targeted tax cuts are designed to cushion the blow of what is widely expected to be a politically unpopular revenue package and to allow O’Malley (D) to frame the debate in terms of tax fairness, the sources suggested. The property tax is among the most criticized of government levies, and the earned-income tax credit benefits some of the working families whose interests O’Malley promised to champion while he was campaigning.

O’Malley is planning to talk about his intentions during a meeting with legislative leaders Tuesday morning at the governor’s mansion, according to the sources, who requested anonymity because all lawmakers have not yet been briefed.

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State property taxes — 11.2 cents per $100 in assessed value — account for a relatively small share of most homeowners’ bills because counties and some municipalities apply a rate several times that much.

But the politics surrounding the state’s levy have been particularly heated in recent years. The rate was raised by 4.8 cents early in the term of O’Malley’s predecessor, Gov. Robert L. Ehrlich Jr. (R), then cut by 2 cents as the 2006 election approached. Aides have said O’Malley would like to reduce the levy at least to where it stood when Ehrlich took office in 2003, although how quickly is unclear.

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Okay, let’s suppose Governor O’Malley does the full monty here and gives us 2.8 cents on property tax. What does that mean for the average homeowner. Let’s see suppose the assessed value of your home is $300,000. Divide by 100. Multiply by .028. And, voilà, you arrive at the princely sum of $84.

But he also seems to be pretty set on increasing the state sales tax by 1 cent. So at what point does your property tax cut go away? When you spend over $700 per month on goods and services.

This, of course, is predicated on the notion that an additional tax on gas is off the table. It also assumes your county or municipal government won’t slap on additional property taxes because they have better use for your money than you and your family.

The second part of this scheme, to increase eligibility for the Maryland EITC is simply Martian logic in the context of a constrained budget. This removes taxpayers from the rolls who are currently paying taxes and replaces income with an outlay.

Earlier this week, Governor O’Malley floated a trial balloon in favor of expanding Maryland’s medicaid program.

When you are staring a $1.5billion deficit in the face you can’t increase EITC and medicaid without imposing a punitive tax increase on Marylanders. But that seems like exactly what the governor intends to do.

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