So you’ve never heard of NoCo and BFF and don’t understand how they relate to the computer tax? Read on!
The Washington Post is reporting that Governor O’Malley is floating a deal to get rid of the much-hated computer services tax. He proposes to replace its revenue with three sources: a surcharge on millionaires increasing their income tax rate to 6.25% from 5.5%, “diversion” of transportation funds and more budget cuts. Senator Verna Jones (D44 – Baltimore City) proposed to pay for repeal through a high-earner surcharge alone, but the Governor would like to rely on multiple sources instead.
Why is the Governor treading so carefully with the rich? Why, it’s because of our politicians in Montgomery County!
Here is County Executive Ike Leggett’s reaction to the Governor’s plan:
Leggett said he favors a repeal, partly because the planned tax significantly affects the thriving technology industry in the Washington suburbs. Leggett said, however, that he opposes raising the top personal income tax rate because a large number of wealthy Marylanders live in Montgomery and that he is wary of cuts to transportation funding.
“I want to be supportive of resolving this, certainly as it relates to this computer tax, but Montgomery County cannot be the sole source of solving a statewide problem,” he said.
Even blogger hero Senator Madaleno was lukewarm:
Sen. Richard S. Madaleno Jr. (D-Montgomery) acknowledged that the number of those who would be affected by the millionaires’ tax is small. “But this is a class of people who generate a lot of tax revenue for Maryland and Montgomery County,” Madaleno said. “To create a disincentive for them to stay would be damaging to the rest of us.”
Senator Brian Frosh and Delegate Tom Hucker were more accepting of the surcharge, but there are enough MoCo legislators who agree with the County Executive that the delegation has become a significant hurdle to repeal. Many MoCo legislators don’t want the computer services tax. And they don’t want a millionaire surcharge. And they don’t want transportation cuts. That is why, by the power vested in me as the author of this blog post, I am officially changing the nickname of our county from MoCo to NoCo.
Now there are alternatives and I laid one out a couple weeks ago. An extra point hike in the corporate tax rate, combined reporting and installation of the Governor’s original upper income tax rates would pay for the computer tax repeal. And the first two components would spread the pain more evenly across the entire state than a straight surcharge. Plus, all three components are progressive taxes and would partially mitigate the special session’s overwhelmingly regressive tax package.
But if NoCo politicians do not offer an alternative soon – whether it looks like mine or not – we all know what is going to happen. The Governor will make a deal with the General Assembly leaders and the delegations from Baltimore City, Baltimore County and Prince George’s County. Some variant of his proposal will pass because the pressure to repeal the computer tax is reaching a fever pitch. And guess where the diverted transportation money will not be going? You guessed right: some project in NoCo will have to wait a few more years. And who is going to be shedding tears for us in other parts of the state? You guessed it: absolutely no one.
And what if NoCo’s politicians successfully resist repeal? NoCo and the computer tax: Best Friends Forever. And there you have the title to this post.