Friday, October 29, 2010

Bob Ehrlich: The Anti-MoCo Candidate, Part Three

Bob Ehrlich depicts himself as a tax cutter. Isn’t that good for Montgomery County?

It depends on which taxes you’re talking about.


Ehrlich has made criticism of Governor O’Malley’s 2007 special session tax package a centerpiece of his campaign. His primary tax proposal is to repeal the special session’s one-cent increase in the sales tax, which accounted for a majority of the tax package. Ehrlich characterizes the sales tax as regressive. It certainly is, but these are crocodile tears from the former Governor. He expressed his real feelings about the working class by closing the state office that enforced child labor, minimum wage and other labor standards in 2005.

If Ehrlich does repeal the sales tax increase, who would benefit the most? The following chart illustrates per capita sales tax payments for every Maryland county (as well as Baltimore City).

In FY 2009, the average Maryland sales tax paid per capita was $591. That amount was highest in tourist centers like Ocean City (in Worcester County) and Saint Michaels (in Talbot County) and in Central Maryland jurisdictions like Anne Arundel and Howard Counties. MoCo’s per capita sales tax payment ($543) is actually 8% less than the state average, so MoCo gets relatively little out of this tax cut – especially given how Ehrlich would pay for it. (More on that later.)

Ehrlich does not have much of a record of cutting taxes, but he does have a record of raising one tax in particular: the state property tax. In 2003, Ehrlich voted in favor of a property tax hike from 8.4 cents to 13.2 cents for every $100 in assessed value on the Board of Public Works. (The board cut the rate back to 11.2 cents in 2006.) That tax hike raised a net $692.9 million over four years. The state does not report its property tax revenues by county, but it does report each county’s assessable base, which drives property tax payments. Here is the estimated assessable base per capita for the tax year starting on 7/1/11.

MoCo accounts for one-sixth of the state’s population and one-quarter of its assessable property base. Its assessable base per capita (an estimated $188,910 next year) is 47% higher than the state average ($128,151). This is the major tax hike that Ehrlich chose in his first year in office – a tax hike that disproportionately hit MoCo.

So Ehrlich would cut the sales tax, which would primarily benefit other counties, but he raised the property tax, which primarily hit MoCo. How would Ehrlich pay for his sales tax cut? We learned the answer to that in Part Two: he would cut MoCo’s education funding and saddle MoCo with responsibility for teacher pension payments. This set of positions in addition to his throwing in the towel on the Purple Line and transportation funding is diametrically opposed to Montgomery County’s economic interests.

That’s why Bob Ehrlich is the Anti-MoCo candidate.