The .11 percent solution

Our view: Arundel council should set aside Schuh’s hastily-written income tax plan

Former Gov. Parris N. Glendening is remembered for many things, but cutting income taxes isn’t one of them, which is kind of odd since the two-term Democrat reduced the state income tax by 10 percent across the board. It took five years to accomplish this Herculean feat, but by 2003, it was fully implemented, and average families saved hundreds of dollars per year.

Did any of them even notice? Given that the state’s finances went immediately south, a structural deficit opened up, other taxes and fees had to be raised to eventually address the shortfall and a Republican, Robert L. Ehrlich Jr., was chosen to serve as his successor, the first of his party to be elected governor since Spiro T. Agnew, one might conclude that this was not a spectacular political or policy triumph.

Yet here comes another Anne Arundel County resident attempting to go down a similar path. This week, County Executive Steve Schuh announced plans to reduce Arundel’s income tax rate, the so-called piggyback tax, from 2.56 percent to 2.45 percent. He claims this will save the average family about $80 per year — and he has at least three County Council members, Derek Fink, Michael Peroutka and John Grasso, all fellow members of the GOP, on his side.

Paying less in taxes is always a pretty appealing pitch to voters, particularly in Anne Arundel County, which has turned more politically conservative than most of its peer suburban neighbors over the last decade or so. But the question that needs to be asked is easily overlooked: At what long-term cost? Mr. Schuh believes at none whatsoever and insists it will fuel prosperity making it “easier to live, work and start a business here.”

In reality, here’s the best that can be said about it with any certainty: It’s better than the county executive’s original plan to cut property taxes by 3 percent, which — because of the county’s cap on the property tax rate — would have been far more costly (and nearly irreversible) in the long run than the $19 million reduction he’s proposing now. And even accepting Mr. Schuh’s generous estimate of benefits (and considering the new tax rate wouldn’t kick in until 2016), it’s difficult to believe that 22 cents per day per household will be a game-changer for the county.

What it would seem to accomplish is to allow Mr. Schuh to keep his campaign pledge to reduce taxes by the equivalent of a 3 percent property tax cut. That’s great for him, but how much do county residents actually stand to benefit if they benefit at all?

Already, the same budget will double admission fees in county parks from $3 to $6. And this is a budget that is generally regarded as lean following many other tight budget years. The school system, for instance, hasn’t seen an increase beyond “maintenance of effort” (the minimum needed to meet increased enrollment and avoid a reduction in state aid) in seven years. That might be good enough to preserve public schools at their 2008 ambitions but not in making them significantly better — providing pre-K instruction or more magnet programs, for example.

Almost every department in Anne Arundel has similar stories of unmet needs. Libraries are contemplating reduced hours, a countywide hiring freeze was only recently lifted and local residents have long complained about the lack of decent athletic fields. Meanwhile, as home to many federal and government contract workers, the county will be vulnerable if federal spending is reduced — a possibility that could easily worsen county finances in short order.

With less than a week before the county must approve a budget, there isn’t enough time to give the ramifications of the proposed income tax cut sufficient attention or to hear from county residents to get their opinion. We would urge Chairman Jerry Walker, the fourth Republican on the council and the most likely swing vote for the tax cut, to set the hastily prepared proposal aside until next year if only out of an abundance of caution. At worst, that would merely delay a modest .11 percent tax rate reduction by one year, but it would at least give the council time to explore what’s truly in the best interests of county residents and not just in the political interests of the executive.