Legislative Updates - From Delegate Mike McDermott

Oct. 31st, 2011

Empty Cupboards and a Demanding King

by Delegate Mike McDermott

As the month of October fades from view, clarity now comes to Marylanders as to the actions taken by the democratic majority in the General Assembly. Those actions culminate in tax, toll, and fee increases at a time when our state’s economic engine is broken and we find ourselves coming in at number 50 in jobs created, and number 1 in jobs lost.

We hear the chant of, “jobs, jobs, jobs”, but the echo can be heard in empty buildings from Garrett to Worcester. Every extra dollar taken by the state government is just another dollar missing from our local economy, and, with a General Fund Budget that spends 12% more than the previous year, and a Capital Budget almost 200 million more than what was recommended by the non-partisan bean counters, increases are unavoidable. The House Republican Caucus offered an alternative budget that limited increases in spending to 3% (the same level of projected revenue increases), but it was rejected.

So, here is a list of what is proposed by the administration and what has been enacted and signed into law in 2011, as unpleasant as it is:

Governor’s Commission on Sustainable Growth (proposal)
Increase in Bay Restoration Fee (Flush Tax)

• In total 200% increase from $30 per year to $90 per year by FY ’15 (July 2014)
• In FY ’13 (July 2012) a 100% increase from $30 per year to $60 per year.
• In FY 15 a 50% increase from $60 per year to $90 per year
• Indexing to inflation beginning in FY 16 with a cap of 3% per year

Blue Ribbon Commission on Transportation Funding (proposal)

• 64% increase in the gas tax over three years (from 23.5¢ to 38.5¢)
• 100% increase in emission inspection fees (from $14 to $28)
• 50% increase in vehicle registration fees (from $50.50 to $75.75)
• 8% increase in vehicle titling tax (from 6% to 6.5%) or elimination of trade-in allowance        

Toll Increases (Approved by the Transportation Authority 9/22/11)
Key Bridge/Fort McHenry Tunnel/ Harbor Tunnel

• 50% increase from $2 both ways to $3 both ways effective November 1
• 33% increase from $3 both ways to $4 both ways effective July 1, 2013
• Total increase 100% from 2011 to 2013.

JFK Memorial Highway Section of I-95/Thomas J. Hatem Memorial Bridge

• 20% increase from $5 to $6 effective November 1
• 33% increase from $6 to $8 effective July 1, 2013
• Total increase 60% from 2011 to 2013

Bay Bridge/US 301 Bridge

• 60% increase from $2.50 to $4 effective November 1
• 50% increase from $4 to $6 effective July 1, 2013
• Total increase 140% from 2011 to 2013

Tax and Fee Increases – 2011 Regular Session
Budget/BRFA
Taxes and Fees Increases in the FY 2012 Budget/BRFA

• Vehicle Titling Tax doubled $50 to $100
• Vanity Plate Fee doubled from $25 to $50
• Land Recording Fees – doubled $20 to $40
• Birth Certificate Fees – doubled from $12 to $24
• Increase in Hospital Assessments adding 2.5% to rates
• Increasing Nursing Home Tax from 4% to 5.5%
• Parole Supervision Fee – doubled from $25 to $50

New Taxes and Fees in the FY 2012 Budget/BRFA

• 2% Premium Tax on the Injured Worker Insurance Fund (IWIF)
• Payroll Garnishment Fee for State Employees
• Maryland Higher Education Commission Program Approval Fee

Other Bills With Tax and Fee Increases from 2011 Session

• HB 1196 – Increases the maximum fee imposed by Maryland Historical Trust from 1% to 3%.
• HB 362 – Increases Licensing Fees for the Home Improvement Commission by $25 for each type of license and a new $20 fee for all initial applications.
• HB 1213/SB-994 – Increases sales tax on alcohol 50% from 6% to 9%
• HB 195 – Increases the licensure fee for a secondhand precious metal object dealer or pawnbroker from $75 to $300
• HB 1022 – Establishes a registration and renewal fee of $1,000 for Debt Settlement Services
• HB 881 – Establishes an application fee of $100 and a $100 per vehicle registration fee for transporting waste kitchen grease.
• HB 523 – Requires the State Court Administrator to assess a $100 fee for the special admission of an out-of-state attorney.

Viewing these increases with a backdrop of the 2007 increases is worth noting. How many times will we be told about how increases will be placed in “lock boxes” and how taxes and tolls will support specific projects only to see them channeled into the ever increasing General Fund. Speaking of those not to distant increases, less we forget:

Remembering When… The 2007 Special Session
The Largest Tax Increase In Maryland’s History (so far anyway)

• 20% Increase in the Sales and Use Tax (From 5% to 6%)
• Also included an expansion to Computer Service which was repealed in the ’08 regular session and replaced with the "Millionaire’s Tax", a 6.25% tax rate on incomes over $1 million. The "Millionaire’s Tax" sunsetted on December 31, 2010.
• 18 % Increase in the Corporate Income Tax (From 7% to 8.25%)
• 20% Increase in Vehicle Excise Tax
• 117% Increase In Vehicle Titling Fee
• 100% Increase in Cigarette Tax
• 5% Income Tax Increase on Incomes over $150,000 (4.75% to 5%)
• 11% Income Tax Increase on Incomes over $300,000 (4.75% to 5.25%)
• 16% Income Tax Increase on Incomes over $500,000 (4.75% to 5.5%)

(*Many thanks to the House Republican Caucus for compiling the facts and figures)

We all understand the need for government to collect taxes, but how can we accept outrageous government growth in spending when our wallets are bare? Maryland is suffering under a progressive weight from which she longs to be free. Her people are suffering, her businesses fleeing, and those in power refuse to yield or learn.

Maryland, my Maryland...hang in there. Your people are wiping the slumber from their eyes.