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Political Animal

Nobody's Happy

By Brian Morton | Posted 11/21/2007

Now that the Maryland General Assembly's special session is over, everyone's got something to be dissatisfied about. Progressives will complain that while the new tax structure finally moves away from the flat tax system, the increase in the sales tax is an unfairly regressive burden on lower-income earners. Montgomery County (and its legendary kvetcher, Gazette columnist Blair Lee) will bitch that, once again, its legislative delegation got rolled, and that its tax dollars will be going to other parts of the state. Everyone will bitch that they want slots as long as you put them in someone else's backyard, and the state's Republicans will once again trot out the "largest tax increase in history" line, which might be effective if it weren't for the fact that they say it any time a Democrat proposes any tax at all.

Nobody likes tough choices, and thanks to former governor Robert Ehrlich not making any of them in his four years, legislators have to make them now. And Ehrlich, like Ellen Sauerbrey before him, gets a paid gig sitting on WBAL Radio's airwaves to bitch about it.

What the recent fight should tell lawmakers is that next time they create a giant plan for education, like they did with Thornton, they should throw in a plan to pay for it at the same time. This will save them some heartache, so that next time giant unfunded mandates don't create the kind of structural deficit that they had to go into special session to eliminate.

What the special session did do is ameliorate the bitching by tossing some carrots (or at least withholding some sticks) for just about everyone. Big business missed the "combined reporting" bullet, so for now, some of them are still able to use a loophole to get away with not paying some state taxes. Those same businesses will hate the new 8.25 percent corporate tax rate, but they'll have to settle for the knowledge that it could have been worse, at 8.75 percent, and it's not likely something that they'll start threatening to move to other states over (where their taxes could be a whole lot worse). Lower-income earners will have to choke down the sales tax increase by remembering the Medicaid expansion and the hike in the personal exemption come tax time, even if they didn't get a $50 sales tax rebate.

Right now, electorally, Gov. Martin O'Malley is sitting in a pretty good spot--even though the state's GOP will rail about "tax and spend Democrats, " as they always do. O'Malley took on the elephant in the room and managed to raise taxes while not sticking any particular group too hard, and he has a little room to breathe before the ugly issue of slot machines lands on a ballot a year from now.

Even though The Sun recently released a poll showing that voters favor slot machines by a small margin, I will take the opportunity to prove that all my predictions come for naught. I firmly believe, as Aaron Meisner, the head of StopSlotsMaryland puts it, that there is no natural lobby for slot machines in the state, and much of the support for slots comes from people who want them as long as they're somewhere else. So while there may be support for slot machines from people outside of Baltimore City and Allegany, Anne Arundel, Cecil, and Worcester counties, if you add in the people who don't want slots in principle, plus the people living in those locales, it's likely that the referendum will fail.

As for the money that racetrack operators will get from their 18.5 percent cut of the slots revenues, I remain skeptical that will be enough money to allow them to increase purses and upgrade their facilities substantially. The tracks have been dingy, depressing places for a long while now, and I wouldn't be surprised if, should slots pass in 2008, we saw an effort by the racing industry to push for full casino gambling at the tracks, since the paltry amount they're getting from slots isn't enough to make the tracks competitive with racetracks in neighboring states. Oh, and don't be surprised if the tracks are still dingy and depressing places.

So nobody's happy. Plus %uFFFDa change, plus c'est la m%uFFFDme chose. Now all state Democrats have to do is point out how "the freeloader culture" instituted during the Ehrlich reign is over--that you can't have it all without paying for it--and see if the state can ride out the nationwide financial crash that's on the way. That's the problem with fixing things: Nobody loves you for it, but in the end you realize it had to be done sometime.

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