Chamber campaign is wide of the mark
I have been listening to Champe McCulloch (op-ed, Feb. 17) and the Chamber of Commerce's drumbeat about an income tax cut for two years now, and I feel compelled to respond.
The chamber contends that a primary reason companies are not expanding in or locating new facilities in Maryland is because of the state's high income tax rate. They claim the state's income tax is one of the primary reasons behind Maryland's recent sluggish economy. This shortsighted view is simply wrong.
First, the importance of taxes in site selection decisions has been examined by experts all over the country in great depth. Studies repeatedly show that a whole range of other factors play a much more important role than taxes. These include real estate costs, labor force skills and costs, transportation networks, market availability, regulatory environment, utility costs, proximity to suppliers and distributors, university resources, cultural enviornment and school systems. In the overall context, taxes play a very small role in the site slection process.
Regarding Maryland's economy, it has been slow, but for reasons totally unrelated to the income tax. To begin with, the state has lost 10 percent of its federal job base since 1987 when defense spending began to slow. Maryland's defense-related industries such as Westinghouse and Lockheed-Martin have been hit hard. Many other non-defense related contractors who have depended on work from the federal government have either shrunk or been forced to go out of business.
Technological advances and deregulation in the banking industry has resulted in downsizing and consolidation. With full interstate banking now being implemented, further reductions could occur. The state's overbuilt commercial real estate market has plagued that industry throughout the 1990s. Only recently has commercial construction begun to pick up in the retail and industrial markets. The utilities industry has also been pressured to downsize and cut costs. We should not forget that Maryland's economy grew faster than the national average throughout the 1980s with essentially the same tax structure it has now.
I need to set the record straight regarding the state's tax system. Yes, thje personal income tax is relatively high. It is the combination of the state's relatively low 5 percent rate with the added local rate of up to 3 percent that causes it to be high. But let's not be so naive and shortsighted as to judge our entire tax system on one tax alone. We also happen to have among the lowest sales, property and corporate income taxes in not only our region, but in the whole country. The state's sales tax ranks 46th, the property tax is 35th and the corporate income tax is 46th in the country.
Overall, taking all of Maryland's taxes into account, we rank 36th. Taxes in 35 of the 50 states are higher than Maryland's.
Our tax structure did not get this way by accident. It reflects a series of decisions made over the years after listening to citizens, businesses and interest groups. It reflects the consensus that emerged that a heavy emphasis should be placed on fairness and equity and that the concept of "ability to pay" should be paramount. This theme is prevalent throughout the state's tax system. It can be seen in the state's progressive income tax, which asks those who make more, to pay a little more in taxes. It can be seen in the state sales tax which minimizes regressivity through exemptions for groceries, medicine and utilities.
Citizens, business executives and public officials have no need to apologize for our tax system -- it is simply designed to raise revenues in a way that maximizes fairness and equity, so that high-income taxpayers, not working families, bear a little more of the burden. It is our heavy reliance on the personal income tax that enables us to keep the more regresive sales and property taxes low, and keep the one tax that truly matters to businesses -- corporate income taxes -- low.
The chamber should be trumpeting the state's tax structure as one of its assets, not one of its liabilities. If they try hard enough, their constant criticism of the state's tax climate may become a self-fulfilling prophecy.
The chamber wants us to believe that corporate executives making site selection decisions do not care about our state's low corporate income tax, our state's low sales tax and zero in on one thing only -- the high income tax -- and then proceed to take Maryland immediately off the list. We know that is not true; the income tax is simply not the significant, overriding factor the chamber portrays it to be.
If the chamber channeled the energy and resources it has devoted to cutting the income tax cut toward promoting and selling Maryland's many assets, we would see a lot more businesses moving to and expanding in Maryland.
If the state's economy was stronger and state revenues were better, I would also be in favor of cutting the state's income tax. If the March revenue estimates are significantly better, I will lead the charge to reduce the income tax in a way that most benefits low- and middle-income taxpayers of our state. What holds us back now is the price tag. The chamber's proposed 15 percent reduction in the income tax takes $500 million out of the budget. Where is it supposed to come from?
The chamber does not know. They want to leave such "details" to us. To take out another $500 million will require cutting out funding for basic services that our citizens want and expect. One-third of the state's general fund budget, or $2.5 billion, goes directly to local governments to provide education, police and fire protection.
There are some who believe we should pay for a tax cut using reserve funds. However, this would be fiscally irresponsible unless we have a means to continue to fund it in the future. I would suggest that the chamber should spend a month attending budget hearings the way we do learning about state government and the costs of operating it. Maybe then they will redirect their energies toward promoting Maryland as the great state for business it truly is, instead of promoting a tax cut at the
Barbara A. Hoffman
L The writer chairs the Senate Budget and Taxation Committee.
Bad way to ease business regulation
The House of Delegates recently passed a proposal called the "Regulatory Standards and Accountability Act." If passed by the Senate, this outrageous proposition will prevent Maryland from adopting laws more restrictive than federal laws. Maryland will, by statute, give up its right to make a law in any area that the federal government regulates, even if Marylanders want to make such a law for their benefit.
The act's proponents, including the Maryland Chamber of Commerce, allege the act is good for the state's business climate. They say the law will streamline approval processes for businesses that would be here were it not for Maryland's prohibitive and costly compliance requirements. They tell us that if we loosen strict regulatory standards, companies will be racing into Maryland with their money and their jobs.
But there is so much they don't tell us. They don't tell us Maryland's environmental regulations, which protect the high quality and usability of our natural resources, will be disproportionately affected. They don't tell us that states such as Maryland, with stronger-than-federal environmental regulations, enjoy consistently stronger economies than states meeting only the federal standards. They don't tell us that pollution based upon current federal standards already costs this country billions of dollars each year.
They don't seem to recognize that this is not a choice between jobs or a healthy environment. We get both or we get neither. It is hoped that this will be a little more obvious to the state Senate.
Lawyers play the tort lottery
The Feb. 18 article ("Bill offers new way to award damages") concerning efforts by the Maryland Trial Lawyers Association to lobby the legislature to reduce the standard for awarding damages in lawsuits shows me a type of tort reform we can do without.
Their plea for a more plaintiff-friendly law is an obvious ploy for lawyers to grasp more money for themselves. I might even be able to believe this expression of noble concern for the public's welfare if the legal profession could be induced to convert its rule on collecting one-third of lawsuit awards to one of fees for service rendered, as other professions must do. It is really a lame excuse to say that otherwise the average person could not bring suit.
What ever happened to pro bono service? Why not consider a form of insurance coverage, as is done in the health care field? Just maybe, just maybe, such innovation would result in reducing the frequency of lawsuits filed in our society.
In this day of instant lottery millionaires, we shouldn't have lawyers run their own lotteries and become millionaires when parties with deep pockets are sued. In the event of large lawsuit awards or indeed any size awards, let the entire award benefit the plaintiffs and let legal fees be billed after due consideration of a case's expenses, time and service rendered and perhaps a lawyer's special expertise -- but not on the size of the award.
, Yes, tort reform is needed.
Otto C. Beger
Long delays in emissions tests
The administrator of the state Motor Vehicle Administration, Ronald L. Freeland, claimed (letter, Feb. 14) that the state emissions tests were user friendly with waits of only 15 to 20 minutes. I beg to differ.
I recently went to the Owings Mills emission testing facility to have my car tested. I was encouraged to see the electronic sign claim "'13 minutes waiting time." What a joke.
After waiting several minutes, it became apparent to me and everyone else that the waiting time would be much longer. As I neared the facility, the reason became obvious. Only two of the six testing bays were in operation.
After this was pointed out to the "supervisor," he replied, "We don't have enough people to open all of the bays." Who's fault was this?
In addition, the waiting lines were not done bank-style, with the next car getting the next available bay. Motorists had to guess which line to commit to.
When the facility finally did open one more bay (to run at half capacity), frustrated motorists tried to switch lines resulting in an unnerving game of bumper car chicken with blaring horns.
When I left the facility after nearly an hour, the line was longer and the electronic sign still claimed the waiting time was 13 minutes.
MSPAP didn't torpedo program
In publishing the March 2 article, "Md. tests torpedo successful program," your paper has torpedoed the truth.
Our public announcement of March 1 was issued in a spirit of appreciation for the opportunities that a six-year partnership with Calvert School has afforded our teachers and students and with optimism regarding the next phase of the Calvert curriculum at Barclay School.
The announcement made no reference to the Maryland School Performance Assessment Program tests.
Your readers should know that:
Barclay was not forced out of partnership with Calvert because of MSPAP.
Barclay will continue to use Calvert books, manuals and supplies -- grades K-8 -- and the Calvert staff will be available to offer advice as needed.
The original Barclay-Calvert agreement was for four years. We have had a two-year bonus. We feel ready to proceed on our own, knowing that Calvert will still be there for us.
Gertrude S. Williams
Jo Ann O. Robinson
The writers, respectively, are the principal and the chairwoman of the School Improvement Team at Barclay School.
Losers should concede gracefully
Whatever happened to the days when a political candidate who lost the election just gracefully conceded and waited until the next election?
A year and a half after the elections, I'm reading about Ruthann Aron's suit against Bill Brock. And while Ellen Sauerbrey isn't making so much noise now, I never really heard her admit that she lost.
It's bad enough that the campaigning starts years before the election, now the election lawsuits last for years afterward.
Correct deficiencies before cutting taxes
Before the Maryland General Assembly Legislature considers 10 percent tax cut it ought to consider first how the state government presents itself to the public and correct the following:
Dilapidated or cramped work facilities that are a hazard to the public and staff.
Desks & chairs that have been used for the last decade or two and look it.
Computer equipment that seems antique and looks it.
A LAN System that too often crashes.
Management that is not responsive to staff.
My point to you is that state employees may support the governor in his attempts to do more with less. But please give us the equipment we need to do it. Then you may cut the tax rate by 10 percent.
State employees are in a position to see where cuts can be made to save money. Their opinion should be respected.
Daniel E. Withey
Divorce is civilized solution to a problem
After reading the column by Mona Charen (Feb. 19) advocating an end to no-fault divorce, I was reminded of the line from "The Wizard of Oz": Ignore the man behind the curtain!
Does Ms. Charen understand what is involved in a fault divorce? As a divorce attorney and someone going through a divorce, I can testify how painful it is to any rational person.
Especially if children are involved, the parents need to maintain a lifelong relationship of cooperation and understanding. How can they do that after the inevitable scars and bitterness left by combat in our court coliseums attempting to prove how terrible and unfit the other spouse is?
Such hostility can only inevitably impact on the children in harmful ways, both before and after the divorce decree is signed.
What is accomplished by shackling two people together in an emotionally dead relationship for the rest of their lives? Is that the example we should show our children?
Ms. Charen points to the absence of many fathers after divorce. Does she really think such fathers would be role models to their children if forced to stay married? Are such fathers not more prone to abuse and neglect their children?
Any person who treats his or her marriage like a tissue should not be married in any event. Desperate people do desperate things. Forcing them to stay married will only lead to more headlines of spousal abuse and misery.
Let us not return to an era of Prohibition in ending a marriage. We should focus on healing and closure, not vengeance and venting.
John B. Sinclair
Saudi victim's treatment hit
I am prompted to write by your Feb. 20 article concerning the Donna Champ accident that was caused by an uninsured, intoxicated Saudi soldier.
As a taxpaying citizen of this country, her husband, James Champ, deserves better treatment from our government and not an indifferent, pass-the-buck runaround.
In this election year we hear constant rhetoric about crime crackdown, welfare cuts and multiple issues uncerning our fellow errant citizens. Where are Bill Clinton, Bob Dole and the rest of our representatives on this unacceptable, "scot-free" mentality toward foreigners?
The Champs need more than sympathy. They need justice and whatever compensation that will help them retain a sense of normalcy in their lives. They are due this kind of support by virtue of their citizenship.
MTO not just about economic survival
I noted an interesting juxtaposition of news stories on Feb. 26. The first page of the Maryland section featured a story on the Moving to Opportunity program, in which Lenora Smith credits MTO with saving her children by making possible a move away from the Flag House Courts public housing apartments.
Then, on the last page of the section, an unrelated story reported the death by strangulation of Marvin Wise Jr., a 9-year-old third grader, and the discovery of his body in a vacant, trash-strewn apartment just three floors above the one Lenora Smith left behind. MTO is not just about economic progress, but survival at the most basic level.
Stadium foes don't care about schools
On Feb. 22, I attended the stadium debate in Annapolis. I kept thinking the stadium foes were, to be blunt, a disgrace. For 11 hard years Maryland has been struggling to regain what was wrenched away from her in the middle of the night by Mayflower vans. Now, Maryland has regained her football team. Under the skillful leadership of Gov. Parris Glendening, Maryland has finally brought back pride and football where it rightfully belongs.
I was ashamed that we were having a debate about how to appropriate stadium funds. Several anti-Maryland, I mean anti-stadium, politicians were crying about money that, which was argued, would be taken from the schools and given to the stadium. This argument could not be further from the truth.
The facts are many that Governor Glendening supports education and school construction. In July of 1993, the governor's task force on school construction recommended that the state spend at least $100 million annually over the next five years. That is being done. Sen. Christopher Van Hollen from Montgomery County, an opponent of the stadium then and now, in 1994 had asked that moneys set aside for the football stadium be used to meet the $100 million-a-year target. Well, without the stadium money being touched, the goal was exceeded and an unprecedented school construction program is going forward under the Glendening administration.
These foes of the stadium forget that Governor Glendening has committed to spending a half a billion dollars in school construction funds during the 1995-1999 term of office. The governor, for fiscal year 1996, has channeled $117,744,000 for school construction and received the Board of Public Works approval. He has also proposed $133 million for fiscal year 1997 -- the largest sum in over 20 years.
The foes of the stadium also neglected to mention that Maryland has spent over $3 billion on school construction over the past 25 years. Based on this, it can be anticipated that the State of Maryland will spend over six billion dollars on school construction during the next 30 years (the period of time authorized for the stadium bonds).
So what does this all mean? It means that the foes of the stadium plan, whom I am sure have prided themselves with the success of Camden Yards and Cal Ripken, have no argument. They are deliberately trying to confuse the Maryland taxpayer into thinking it's either construction for schools or the building of the stadium. They forget that Maryland can responsibly have both.
They are doing this for what must be political reasons. Perhaps Governor Glendening is doing too much right for the state and some are worried about not regaining the governor's seat for at least another term. Perhaps some are trying to use this to launch their careers and make a name for themselves. For them, I believe the opposite effect will be felt once their constituents understand the whole issue.
It would be a national disgrace if Maryland lost the team because of a bunch of whiners who for one reason or another oppose the plan. Maryland would become the laughing stock of the country.
The stadium is about regaining what was lost in Maryland. No dollar amount can justify stamping out the hope and meaning that Governor Glendening and his hard working staff are so dutifully trying to resurrect. Up with the stadium. Call your state senator and delegates and let them know you want football now! Let us not allow the publicity seeking and politically motivated legislators to frustrate the states important projects.
Shame on them.
Thomas E. Quirk
Pub Date: 3/09/96