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PUBLIC MEETING
Progressive Solutions to the State Budget Deficit

September 29, 2007
Photos

Report on “Progressive Solutions to the Budget Crisis” Meeting

On Friday evening September 28th 95 people, largely from downcounty Montgomery County, gathered at Eastern Co-Housing Village for a Progressive Neighbors (PN) meeting on the Maryland state budget crisis. Nine state legislators also attended to hear Progressive Neighbors' and residents' concerns and proposals: Senator Jamie Raskin; Delegates Sheila Hixson, Tom Hucker, Heather Mizeur, Jeffrey Waldstreicher, Ana Sol Gutierrez, and Jane Lawton; House Majority Leader Kumar Barve; and Montgomery County House Delegation Chair Brian Feldman.

Progressive Neighbors Chair George Vlasits presented the organization's budget proposal which relies primarily on making the state income tax more progressive and upping corporate income taxes and closing corporate tax loopholes. Vlasits explained that a progressive income tax, where wealthier individuals pay at a higher rate because of their greater ability to pay, has been an accepted part of the Federal income tax and national economic measures since the Progressive era in the early 1900s. But in the past 30 years the New Right have attacked progressive taxation as part of their strategy to shrink the role of the government. The solution to the deficit crisis now facing Maryland, and the only one that will gain the support of a majority of working and income Marylanders, he said is to restore the principles of progressive taxation.

PN opposes raising the state sales tax and introducing slots and gambling because both are regressive. Also included in Progressive Neighbors' proposal was an increase in the tobacco and alcohol taxes, applying a sales taxes to services such as business, financial and luxury personal services, and instituting the League of Conservation Voters green taxes. These measures, without slots and an increase in the sales tax would garner over $2.2 billion in revenues, to be used to maintain existing services and programs, and increasing funds for health care, education, and mass transit.

Henry Bogdan, Directory of Public Policy and Public Affairs for Maryland Nonprofits, in his presentation, showed that despite it being a wealthy state, Maryland is actually a low tax, low spending, small government state with a regressive state income tax and low corporate taxes. He also showed that the source of Maryland's structural revenue problem was a failure of Maryland's revenues to grow with obligations in the areas of education, health, and public safety because of tax cuts in 1987 and 1997 which were made without regard to the state's growing needs. Maryland currently ranks 47th among the states in taxes, fees, and other revenues collected by the state and local governments as a portion of state residents' incomes.

Mike Tabor explained Progressive Neighbors' opposition to slots and gambling as a way of raising revenues for the state. Read his “Ten Reasons To Oppose Slots”

Four questions were then posed to the legislators:

1) Do you support raising $2.2 billion in revenue to both close the budget deficit and fund improvements in health care, education and other programs?

2) Do you support making the state income tax progressive and making corporations pay their fair share by raising corporate taxes and closing corporate tax loopholes?

3) Do you oppose bringing slots to Maryland?

4) How will you advocate and lead on these issues?

Legislators were also asked if they supported or opposed the call for a special legislative session in November to approve Governor O'Malley's budget package. (Progressive Neighbors opposes such a session because of the likelihood of it leading to a back room deal with limited public input.

Response of Legislators:

District 20 State Senator Jamie Raskin: Senator Raskin began by explaining that the motto that government “by, for and of the people” must also apply to economic policies. Governor O'Malley's budget shows, he said, that progressives in the state are winning on economic issues. The progressives we elected have told O'Malley that slots and sales tax increases were not the way to solve the budget deficit. The Governor has made closing corporate loopholes as well as a progressive state income tax an important part of his package. While Raskin said he would like to see an even more progressive package, O'Malley has made some progressive proposals which is promising.

As for the four questions: #1 Raskin said he supported raising $2.2 billion in revenues. #2 He supports a progressive income tax and raising corporate taxes. 3) He opposes slots.

District 20 Delegate Tom Hucker: Delegate Hucker said that he has worked on tax fairness issues for many years while the director of Progressive Maryland and was also on the board of the Stop Slots group. He helped create a coalition that involved black churches to oppose slots, and the coalition was successful in blocking the introduction of slots during the Erlich administration. He also worked on closing tax loopholes, which Delegate Hixson also favored, but which Governor Erlich opposed and killed. He reminded the group that the state will not have the opportunity to raise additional revenues after this year. The public expects that the package passed this year will solve the deficit gap and won't approve further taxes or other similar measure in the next several years at least.

As for the 4 questions: #1 Hucker said he will continue to advocate for raising $2.2 billion in revenues. #2 He strongly supports a progressive income tax and raising corporate taxes. #3 He opposes bringing slots to Maryland, but may need to compromise to win the other progressive elements of the package.

District 20 Delegate Health Mizeur: # 1 - Delegate Mizeur said we needed more than $1.5 billion in revenues (the existing deficit) for, among other things, children's health care programs. #2 Mizeur said that she ran on making the state income tax more progressive and that she won't change her position now. She wants to eliminate the standard deduction for high income earners. She voiced objection to trading our votes unless we get something substantial in return, such as, for example the geographical cost index for Montgomery County schools. #3 Mizeur said she is absolutely opposed to slots in Maryland. We need to invest in high tech instead for our state's economic future, not slots,

District 20 Delegate Sheila Hixson: Delegate Hixson explained that since she is chair of the Ways and Means Committee, she has to consider the responsibilities that go with that office as well. On the issue of the sales tax, she said there hasn't been an increase since the 1970s, but that if there is an increase we need to consider breaks for low income residents to offset the regressive nature of a sales tax increase. She said that all these measures will be on the table in the next legislative session. Even if a special legislative session is called, there will still be public hearings.

As for the questions: #1 She agreed that #2.2 billion in revenues is needed. #2 She is in favor of a progressive income tax. In the past, it was the Senate that killed it, she said. She agreed that we need to look at corporate loopholes. She favors a $1 a pack increase in the tobacco tax. An increase in the gasoline tax won't be considered. #3 She said that she couldn't say that she would be against slots. It depends on what else is in the package.

District 18 Delegate Jeff Waldstreicher: Delegate Waldstreicher began by talking about the recent Maryland court decision against gay marriage. He feels strongly that we need marriage equality under the law.

As for the questions: #1 He agreed that we need to raise $2.2 billion. #2 he is in favor of making the progressive income tax more progressive; #3 He opposes slots in Maryland. He said he was on the Judiciary Committee and has seen what drugs and prostitution does and feels that slots create in similar problems. He feels that slots are not inevitable; there is a real chance of defeating them. He feels that the Governor will call for a Special legislative session and that he is undecided about whether it is a good idea. If one is held, he wants to make it as participatory as possible.

District 18 Delegate Ana Sol Gutierrez: Delegate Gutierrez said that she is personally against a special session because it is undemocratic and would probably mean no hearings. She said that she thought meetings like this were great because they focused on issues and allowed constituents to voice their opinions and get a response from their political representatives. She also said there were other tax measures that needed to be looked at. She supports, for example, raising the alcohol tax.

As for the questions: #1 She supports raising $2.2 billion in revenues. #2 She is absolutely is in favor of making the progressive tax progressive and closing corporate tax loopholes. #3 She is strongly against slots.

District 18 Delegate Jane Lawton: Delegate Lawton said she will support Speaker Busch who is against a special session, although she does see some positives in a special session. There are two sides to this issue she said. She said Montgomery County has more needs than most people in the state realize. Not everyone in the County is wealthy, and many need government services.

As for the questions: #1 She said that revenues in the neighborhood of $2.2 billion may be needed and the legislature would be looking for revenues in about that amount. #2 She favors a progressive income tax, but argued that other counties need to tax wealthy higher incomes like Montgomery County does. Montgomery County cannot bear an unfair amount. She said some reforms in the area of the corporate tax were needed. #3 She was personally opposed to slots, but there is strong disagreement around the issue of slots. She and other legislators don't know yet what the choices will be, and they may not have the opportunity of vote up or down on slots so she cannot make a commitment on how she will vote at the present time.

Montgomery County House Delegation Chair Brian Feldman: Delegate Feldman disagreed with some of the revenue predictions that were used by Progressive Neighbors in its handouts. He said we can't go overboard on making the state income tax too progressive. If we are out of line and make the tax too high for upper income residents in Montgomery County and it is much higher than in Virginia, then residents may consider leaving the state which would not be good for Maryland. Also, he questioned whether it was fair that under O'Malley's package, $90 of the $163 million generated by making the tax progressive would come from residents of Montgomery County.

As for the questions: #1 He favors raising $2.2 billion in revenues, but that doing it in a special session would be a bad idea. #2 he favors making the income tax progressive, but with the caveats addressed in his opening remarks. #3 He voted against slots in 2005, but he is not ready to commit to how he wold vote this time.

House Majority Leader Kumar Barve: Delegate Barve said he is opposed to a special legislative session. He said he is willing to vote for taxes if necessary but is personally against slots. He said, unfortunately, in other areas of the state, Democratic legislators won't vote for taxes, but will vote for slots so it's a tough battle.

As for the questions: #1 He supports raising $2.2 billion in revenues. #2 He supports making the income tax progressive, but with the caveats expressed by Delegate Feldman – that there is not an undue burden on wealthier Montgomery County residents. #3 He voted against slots in the past, and he hasn't changed his mind on the issue.

Among the follow-up questions from participants were:

-The ICC (Inter County Connector highway): The questioner said it was an overly expensive project that would not solve gridlock problems and is gambling with the health of state residents.

Delegate Barve explain why he felt the ICC was critical to relieving traffic congestion.

-Money From Gambling Interests: The question was whether legislators were and would be receiving money from gambling interests as they consider the issue of slots.

Delegate Hixson said she has supported slots in the past and that if a budget package with slots comes to the floor, it is her duty as chair of the Ways and Means Committee to support the bill. She felt it would be a good idea if the slot machines were actually owned by the state so it could get more of the proceeds.

Bobbye Walton said she would give Progressive Neighbors the results of research she has done on how much gambling money has gone to legislators.

Photos from the event
(Photos: Carole Douglis, writer/photographer and resident of EVC.)