Baker: O'Malley should veto Pr. Geo's tax measure
Here's something you don't see very often: A candidate coming out against a tax break in an election year.
Former Del. Rushern L. Baker III (D), who is running for Prince George's County Executive, said Gov. Martin O'Malley should veto a bill on his desk that would give residents a tax break because it could also impair the county's ability to avoid furloughing workers in this year's budget. ...
Baker, for those of you who may not have been here, or may have forgotten, was the county elected official most responsible for bypassing TRIM and giving us one of the highest telephone taxes in the country. His campaign's "The Pledge for PG" omits any pledge to honor TRIM or to to avoid or limit tax increases.
Candidate Gerron Levi (D-23A) who has voted for tax increases in the past, does want Gov. O'Malley to sign the bill.
On Sun, Apr 25, 2010 at 1:53 PM, robinsonawjr <email@example.com> wrote:
FYI: See Washington Post Article re cap on MNCPPC taxes below. I was told by a county council person we already had this break. Montgomery County has enjoyed it for years.
Taxpayers have given the county $60 million from the Maryland National Capital Park and Planning Commission budget 2 years running to help it close the budget gap. We were promised, however, by state delegates that this wouldn't damage the Commission and its services. Park and Planning, in the past, took over services previously performed by the county because it could raise money without taxpayers believing that TRIM was under assault again.
As we know we are in an economic downturn with property values tanking. Prince George's County has one of the highest forclosures in the state. It is essential that we rebuild the county's reputation and services without scaring off potential residents with high taxes and few services. In the coming months, I will be exploring initiating the Truth iN Taxation II committee. We will look at how to return taxes to residents and still maintain basic, essential services. I will be talking to groups in the county after the election that have done an excellent job of putting forward candidates and making change. More laster on effort.
Tax relief could reopen budget gap in Prince George's, Md.
By Jonathan Mummolo
Washington Post Staff Writer
Sunday, April 25, 2010; C01
At the close of the Maryland General Assembly session this month, the fiscal prospects for Prince George's County were looking up. County Executive Jack B. Johnson said that schools would be better funded and that there would be no need to furlough or layoff county employees, thanks in part to a hard-won increase in state aid of $18 million.
But a bill awaiting Gov. Martin O'Malley's signature complicates that scenario, and also puts the governor in a political bind, because it would mean a loss of tax revenue in the county -- to the tune of about $18 million.
The bill would place a cap on taxes that county residents pay to the Maryland-National Capital Park and Planning Commission, an agency that serves Prince George's and Montgomery counties. The cap, because of the way it would be applied, would cost the commission $18 million in the next fiscal year, and Prince George's has been relying on the commission to supplement its operating budget.
If O'Malley (D) signs the bill, he could reduce the revenue available to the county in a tough budget cycle. If he vetoes it, he takes a tax break away from a populous county in an election year -- a risky move when his Republican opponent, former Maryland governor Robert L. Ehrlich Jr., has made cutting taxes a central plank of his campaign platform.
A spokesman for the governor said right after the legislative session that O'Malley would sign the measure. But when asked this week, another aide said O'Malley was still weighing the "pros and cons."
"The governor is still reviewing that particular piece of legislation," said O'Malley spokesman Rick Abbruzzese. "There are pros and cons to this bill, the pros being, obviously, the tax cut for the residents of Prince George County, and that needs to be balanced with the loss of revenue."
County Council Chairman Thomas E. Dernoga (D-Laurel) said he and the other council members -- who have final say over the commission and county budgets -- are discussing options for dealing with the potential revenue loss.
"It certainly complicates getting to zero furlough days and fully funding the education budget," Dernoga said of the projected revenue loss. "The concern that Park and Planning has raised is whether they will be able to come up with the full amount of funding the executive has put in his budget. . . . Getting $18 million in one hand to deal with our budget woes while giving up $18 million on the other hand, we don't end up being any closer to solving our problem."
The bi-county park and planning agency has separate budgets for its Montgomery and Prince George's operations, and Montgomery has had a cap on commission taxes for years. The commission's budget for Prince George's is also separate from the county government's budget, but the loss of revenue could still affect county finances.
The county budget proposed by Johnson (D) includes more than $60 million from the Prince George's side of the commission. If the commission takes an $18 million hit, it might be hard-pressed to provide that assistance without changing plans for projects that include improvements to parks and athletic facilities throughout the county. The agency might have to borrow money for projects or delay or scuttle them, officials said.
Lacking a tax cap, the commission accumulated large surpluses during the real estate boom, when property assessments -- and tax bills -- soared. That surplus has led the county to rely increasingly on commission funds for its budget, a practice that recently drew negative attention from a Wall Street rating agency.
In a letter Thursday to Dernoga, Johnson responded to the projected revenue loss by recommending that the commission reduce or forgo pay increases, new jobs and program enhancements and use bonds to fund capital projects rather than cash.
The budget dilemma stems largely from an amendment added to the tax cap bill late in the session by Sen. Douglas J.J. Peters (D-Prince George's). Dubbed a "technical amendment" -- which typically would not significantly affect legislation -- the change was approved with little study, several members said.
Taxes residents pay to the commission are based on property assessments, and the new measure would place a cap on how much of a home's value could be taxed. Peters's amendment would exempt portions of past assessment increases when calculating future taxes, which would lead to a more immediate tax break for residents and a more dramatic revenue loss for the commission.
"There was no indication there was any substantive impact," Del. Melony G. Griffith (D-Prince George's), chairman of the county's delegation in the House, said of the amendment. She said she was in favor of a tax break but wanted the change implemented more gradually to lessen the impact on the commission.
"It was not my intention to put projects that were planned in jeopardy," she said.
Peters said he added the amendment so residents would reap the benefits of the tax cap as quickly as possible.
Once the amendment was adopted, the park and planning agency lobbied unsuccessfully in the final days of the legislative session to have it removed. Members of the county delegation were given lists of commission projects in their districts that were described as "on the chopping block" because of the potential revenue loss.
"The bottom line is that the amendment will push the Commission into a deficit very quickly because it accelerates the existing imbalance," said Adrian Gardner, general counsel for the park and planning agency, in a letter to the county's Senate delegation.
"Many of you have inquired about the Commission's financial situation . . . and some openly claim the Commission has 'too much' money," he wrote. "Please understand this is not correct."
It's unclear just how much the commission can spare this year and whether projects will be shelved. In the meantime, the continued practice of the commission's helping to fund the county budget has drawn the glare of Fitch Ratings. In a February report on the commission's bond rating, Fitch stated that "additional transfers of commission funds to support county operations could result in a rating downgrade."
Staff writer Ovetta Wiggins contributed to this report.