It may disappoint some to hear that as of this week there is officially no chance of the Maryland General Assembly reconvening this summer in a special session to reconsider cutting income taxes. But what Gov. Larry Hogan unveiled Tuesday is actually better — he wants a complete evaluation of state government by an independent panel with an eye to reorganizing and "right-sizing" it.
Such periodic reviews are needed for government at all levels, local, state and federal. Too often, the public sector will expand to tackle a new assignment but fail to downsize when that assignment is complete (or a better solution is found). What happens instead is that nobody is ever fired and they evolve into another layer of bureaucracy and mission creep. Eventually, a little pruning is needed, and it usually requires a third-party who isn't quite as attached to the errant stems.
That makes Robert Neall, a former delegate, state senator and Anne Arundel County executive, the perfect man to lead the effort. Few can match his knowledge of state government and particularly of the state budget. He also understands where the political bodies are buried, having served in the legislature as both a Democrat and Republican. And perhaps better yet, rarely has Maryland seen a politician who takes more delight in challenging conventional wisdom (and telling it like it is — or at least exactly how he sees it) regardless of the political fallout.
What does that have to do with tax cuts? Everything. Two years ago, while his fellow Republican candidates were promising the moon when it came to tax cuts, Mr. Hogan took the responsible stance that he would find ways to control government spending first then look to cut taxes. Now he's doing just that. The first step for any chief executive should be to find out how much state government Maryland really needs. It's like choosing a house before taking out a mortgage. Once the price tag for state government is clear, then it's time to decide how best to pay for it.
House and Senate negotiators got bogged down in tax cut discussions at the end of the last legislative session because: A.) They didn't know the answer to that key question, and B.) they had developed no clear consensus about why to cut taxes. Should a tax reduction be used to stimulate the economy? To better provide for Maryland's disadvantaged? As a political payoff to some favored voting bloc? We suspect one might have heard 188 different explanations from the membership in the session's final days.
There's a saying in Annapolis (by way of Joe Louis) that everyone wants to go to heaven but nobody wants to die. Here's a translation: Everyone would love to pay less in taxes but few want to see their services cut to finance that benefit. You'll pardon us if we're a bit skeptical of income tax reductions as the last major one — the $600 million tax cut championed by then-Gov. Parris N. Glendening — helped get him re-elected but also helped create the structural deficit that plagued successive governors.
The notion that a tax cut by itself spurs tax revenue growth is, of course, nonsense. And when there's a major revenue shortfall, lawmakers inevitably seek less politically painful solutions like fee increases and expanded gambling (although that particular golden goose may have reached its egg-laying capacity). Both have their own destructive effects. What should be avoided are those cures that are worse than the disease — as can happen when taxes or fees are reduced arbitrarily without regard to who might have to ultimately foot the bill.
Perhaps, the General Assembly will next year seek some kind of "grand bargain" that pleases both Mr. Hogan and the Democratic leaders. A few negotiating pieces may already be in place — like legislation requiring employers of a certain size to offer their workers paid sick leave for a certain number of hours worked. It died in the session's waning hours alongside the tax cut bill.
Still, it would be nice to think that reason, and not just politics, will guide whatever proposal emerges. Ideally, the plan should have a clear purpose, be fair, boost Maryland's most disadvantaged communities including Baltimore, promote the creation of good jobs and adequately fund state government now and in the future. That's a tall order, but it's what voters should expect and not just some patchwork effort to buy votes in the next election. Better to provide genuine and sustainable tax relief than just shift the cost to some sucker down the road.