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Martin O'Malley is the Governor of Maryland. He writes a regular blog for his official website.

What the Wall Street Journal Doesn’t Want You to Read

Governor O’Malley wanted to share this Letter to the Editor at the Wall Street Journal.

Dear Editor:

We are all entitled to our own opinions; we are not entitled to our own facts. The Editorial Page of the Wall Street Journal falsely claimed Maryland’s tax policies have driven countless millionaires out of our state.  In fact, the number of millionaire households in Maryland has actually increased by 19% since our Administration took office.

In fact, today Maryland has the highest percentage of millionaire households in the United States.

In fact – even after the tax reforms of 2007 (which attacked the $1.7 billion structural deficit our Republican predecessors left our state) – a recent study by the non-partisan Federal Funds Information for States and State Policy Reports, finds that AS A SHARE OF INCOME, Marylanders pay the third lowest state and local taxes.  We also pay the 9th lowest sales taxes.

Maryland is one of only eight States earning a AAA bond rating. Unlike the ideological falsehoods spewed by the Wall Street Journal’s editorial page, we believe in a balanced approach to public finance of cuts, investment, and – yes – revenue.

After cutting $8 billion in spending (the most in Maryland’s history) and shrinking one of America’s smallest state governments by 5,600 positions, our legislature did, in fact, ask households with taxable incomes of $150,000-$250,000 per year to pay another $250 a year.  Households who make more would pay more, but no household would pay more than one quarter of one percent more than they currently pay.

Both nationally, and here in Maryland, we’ve seen the difference between governments that take a balanced approach of cuts, modern investment, and balanced revenues, versus governments that embrace the Bush policies which squandered record surpluses into record deficits and brought America into the greatest economic crisis this side of the Great Depression.

Because we’ve opted in Maryland for a balanced approach, on a percentage basis, we’ve been able to recover nearly twice the jobs lost during the Bush recession as has the country as a whole.   This year, Maryland’s businesses achieved their best quarter of new job creation since 1999, creating jobs at three times the rate of their counterparts in Virginia, and more than one and a half times the national rate.

Facts are stubborn but sometimes hopeful things.  Last year, under President Obama, America’s businesses created more jobs than they did during the entire presidency of George W. Bush.

While some may pine to take America back to the Bush years, here in Maryland we stand by our President’s vision to move America forward with greater job creation, greater opportunity, and greater fiscal responsibility.

Sincerely,

Martin O’Malley

Martin O'Malley is the Governor of Maryland. He writes a regular blog for his official website.

Kathy

7:35 am on Saturday, May 26, 2012

Like many things involving statistics, the information you get depends on who is compiling the information, and how. It is true that our State Income tax rate seems low when looking at charts, but the Tax Foundation lists Maryland as having the country's fourth highest combined tax burden (state, local, sales, and property, along with fees). It is true that our income tax as a share of income ranks us in the best third, but that is because Maryland has relatively high incomes compared to many southern and western states (although low compared to NY, NY, Conn, and other Northern States.) Maryland also has been named by SBA as having the 21st best state for business as far as taxes--which puts us in about the middle. I do agree that the theory that millionaires are leaving in droves is probably anecdotal and not true--people pick a state for other reasons than the tax burden and there is a lot to love about living here. And it is true that Maryland has an excellent bond rating because of its finances. But I think that Mr. O'Malley's claims that Maryland is somehow a "low" tax state are disingenuous.

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Edmund Klebe

10:44 am on Saturday, May 26, 2012

A major reason for the AAA bond rating is that Maryland has a constitution that REQUIRES a balanced budget.! The so-called "spending cuts" are, in fact, cuts in the PROJECTED spending, i.e. instead of them spending 500 billion a year, they "cut" it to only spend 499 billion, then say they have cut one billion.

Kathy

8:00 am on Saturday, May 26, 2012

And I question how Marylanders can pay the "third lowest" state and local taxes (even as a share of income) when 7 states do not tax personal income at all?

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H.R. Pufnstuf

8:23 am on Saturday, May 26, 2012

Great question! Good comment above, also.

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BOH

2:49 am on Wednesday, May 30, 2012

Having lived in Texas, which has no personal income tax, I recall that the main differences were property and sales taxes. Property taxes are generally 50%, 100%, or even higher percentages above what we pay here. Because property taxes are their schools' sole funding sources, they're darn near the highest in the country. For comparison's sake, take my town of Columbia and my father's town of League City, TX. Median home value here in 21044 is $334K (per Zillow), and with a property tax rate of 1.014%, the average property tax bill would be $3387. In TX they pay the combined layers of taxes. My dad pays Clear Creek ind. school district 1.36%, League City 0.616%, and Galveston County 0.6218%, totaling a shade under 2.6%. Multiply that times the average home value of $209K, it's $5434 in property taxes. With a mean family income of $121,432, Columbia pays 2.79% of its HHI toward property tax. At mean HHI $111,039, League City pays 4.89%. Add in 4.75% +$90 MD state income tax, and the combined income/property tax here is 8.28%, and TX is still 4.89%, a 3.39% difference. Of course Texas leans heavily on the 2.25% higher sales tax rate. Utilities taxes (wireless and fiber, for example) are higher, and there are various other tax mechanisms that greatly narrow or even offset the difference. Thing is, nuances aren't exactly red meat to the soundbyte-addicted electorate,

Speaking of Texas taxes: http://www.star-telegram.com/2011/09/25/3395762/is-texas-really-a-leader-in-low.html

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Frank in Elkridge

9:58 am on Wednesday, May 30, 2012

@BOH - thanks for your enlightening response. No matter how you cut it, states must pay for services and infrastructure somehow. Those governors and states that brag about having no sales tax or income tax, don't necessarily have a lower overall tax rate. Those that do have a lower overall rate of taxation, New Hampshire for example, have no services, lousy schools, bad roads, and lots of private schools for people who can afford them. States like Mississippi also have a really low standard of living. States like Texas have many millions of people who have no health insurance and a short life expectancy.

brian

8:52 am on Saturday, May 26, 2012

@Kathy very well written

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Edmund Klebe

10:46 am on Saturday, May 26, 2012

Again O'Malley blames everyone other than who he should blame.

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Michael Ernest

11:42 am on Saturday, May 26, 2012

MOM obviously took Statistics 101 during his college days as one of the famous (or not) readings is entitled "How to lie with Statistics". He must have a good sense of recall! Whether the number of millionaires in the state has increased or not does not negate that some have likely left the state while others joined millionaire status. Such nonsense about Obama job creation-when in the Bush years unemployment was low and productivity high, one might not expect a high degree of job growth. Just like the BLS unemployment figures, you can massage the statistics to rationalize against opposing points of view. This democrat does not believe anything that comes out of the mouth of MOM. Three cheers for the WSJ.

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Buzz Beeler

12:09 am on Wednesday, May 30, 2012

Mr. O'Malley I did not see this in your letter. You run one of the highest taxed states in the country, or did you forget that?

http://articles.baltimoresun.com/2012-01-20/news/bs-ed-maryland-taxes-letter-20120120_1_wrong-path-o-malley-maryland

Amazing how you want to run the WH and can't balance your on darn budget. The state deficit is $1.1 trillion and that ain't no chump change.

You had better hope there is a ton of taxpayer funds to dole out in entitlements if you ever get the chance to step on the main stage, cause your gonna need em! (sic)

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Frank in Elkridge

10:21 am on Wednesday, May 30, 2012

There is an projected budget deficit of $1.1 billion (not trillion) dollars for FY 2013. Since the Maryland constitution requires a balanced budget, the final budget will have no deficit.

Maryland ended FY2011 with a $344 million surplus, due in large part to personal income tax payments being higher than lawmakers had anticipated. In 2011 Maryland lowered state spending $434 million below FY 2007 levels, cut $4.3 billion, and eliminated 3,200 state positions since Gov. Martin O'Malley took office in 2007.

For FY 2012:

$446 million cut from state agencies
$94 million cut from education aid funds
$132 million cut from state retirement and health benefits
3.4 percent cut in funding for the Department of Labor, Licensing and Regulation's Division of Financial Regulation
$15 million for the Maryland Economic Development Assistance Fund to help stimulate business growth and economic development, which is a 25 percent increase
$80.1 million, or a 25.3 percent increase, to support unemployment insurance
$12.4 million for stem cell research
$8 million for biotechnology tax credits, and $3.8 million for the Maryland Biotechnology Center;
$10 million in sustainable communities tax credits to promote urban redevelopment and create job
$250 million for public school construction
$8.2 million for major tourist and cultural attractions
$5.8 million for the the One Maryland Broadband Network, which connects three existing broadband networks across Maryland

Arbutus Town Crier

9:52 am on Wednesday, May 30, 2012

Want and Needs are two issues,
We the people are in need.
as political get what they want.
Prosperity is a "want"
Reality is a "need" Jobs are a needed for Prosperity
At this time in history the politicians should Think, It is times like this when a citizen goes to the store see's what he wants but only buy what is needed maybe a simple thought process is needed

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Arbutus Town Crier

4:35 pm on Wednesday, May 30, 2012

$10 million in sustainable communities tax credits to promote urban redevelopment and create job, $15 million for the Maryland Economic Development Assistance Fund to help stimulate business growth and economic development, which is a 25 percent increase? I guess 21229 Arbutus will never see it; I haven't seen my tax dollars at work except bare essentials. Being in small an area with a city zip hurts us. Somebody must be confused because we share zip code with the city instead of Baltimore county, Arbutus 21227 could use some too. Unless some one in office wants there neighborhood developed so the house appraised higher and letting old middle class housing go down . Also its been three years since Bush cant blame him anymore That's getting old "Yawn" . Numbers can be manipulated to suit the user.

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USA Forever

12:57 pm on Thursday, June 14, 2012

Let us also remember that the doomsday budget with the 500 Million shortage was for the lack of spending INCREASES!!! We need decreased spending. All O'Malley knows is how to spend and spend more. Real change is needed as Arbutus Town Crier is stating. Stop special interest, stop gov't overrun, stop giving out the American Dream to non Americans, focus on families, and provide real jobs in the private section, and get gov't off our each part of our life. We are intelligent and able people and do not need Big Brother telling me what size soda I can get at McDonald's!!!!

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BOH

1:50 pm on Thursday, June 14, 2012

USA Forever, I'm not going to defend O'Malley on spending,, because I've only lived here since 2006, and therefore have very little basis for comparison between him and other MD governors. I'm also still learning MD's fiscal authority balances of legislature vs. governor, state vs. municipal vs. county, etc. But I've seen an awful lot of examples of O'Malley's efforts to cut spending in many areas, not just to increase it. Some of that spending he's pushed has been not only justifiable, but long overdue, such as the ICC and the possible metro extensions studies. Did Ehrlich ever really push for big cuts? I don't honestly know, but it sure seems he left an enormous deficit that was downright suffocating once the economic downturn real estate bubble pop killedincome and property tax revenues.

Say, what's this talk of giving jobs to the private sector? You do realize that is both a spending increase and government augmentation, right?

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USA Forever

6:56 pm on Thursday, June 14, 2012

BTW - Good comments. Enjoyed reading them.

USA Forever

6:55 pm on Thursday, June 14, 2012

BOH, I have been in Maryland since 1999. I have YET to see a fiscal conservative as governor. I have seen Glendenning (sp), Elrlich, and now O'Malley. None have overwhelming, but the governor can only do what the house and senate allow. Guess who in charge....Democrats and have for 70 years (Ok that is a guess :-)!!!). All I am asking is to tighten our belts and actually reduce spending. O'Malley is my opinion has NEVER actually cut spending. It is all accounting tricks and gimmicks. Allowing capitalism and the free market is the only way to get out of the mess we are in. The day of gov't hand outs, bail outs, and control need to stop. Jobs need to come from the private sector and not government to make a long lasting impact.

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