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Comptroller Peter Franchot Says Md. Tax Hike Is Not Justified

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BALTIMORE (WJZ)—Debate over a state income tax increase expands beyond the statehouse. Maryland’s legislative leaders are still laying the groundwork for a special session to settle budget issues that failed to be resolved before the end of the regular legislative session.

Political reporter Pat Warren explains there’s a difference of opinion on just how much money the state needs.

The governor, Senate President and Speaker of the House, all Democrats, are united in favor of a tax increase, but divided over who should pay what.

Republicans argue the state is overspending and can function without additional revenue.

The state’s tax collector, a Democrat, says taxpayers should be spared an added tax burden in a time of recession.

Does Maryland need a tax increase or not?

“No, because it hasn’t been justified,” said comptroller Peter Franchot.

The budget passed by the General Assembly this month reduces spending by $512 million. But Franchot says fleshing it out with an income tax hike is a mistake.

“As far as I can tell, they’re simply saying we’re adding these taxes on because we can. And I urge as a Democrat, ’cause it’s my party that’s doing this, be very cautious as far as indiscriminate tax increases, and get the spending and the borrowing under control,” Franchot said.

Economic consultant Anirban Basu of the Sage Policy Group says a tax hike is risky.

“We have some of the higher income taxes in the country already as Marylanders. Past experience has suggested that people have a tendency to move out of the state,” Basu said.

But with education and public safety cuts on the line, that’s a risk lawmakers appear ready to take.

The governor says he won’t call a special session until there’s a consensus on tax increases.

The governor may order two special sessions this year: one on the budget and the other for expanded gambling.

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