The Tech Tax faces (bipartisan) opposition

In this opinion piece in the Gazette, a Maryland Republican Party operative and a Montgomery County Democrat in the House of Delegates advocate for a repeal of the new sales tax on computer services that was enacted literally in the "dead of night" during last Fall's tax hiking special session. While I support the content of the article, I do object to their use of the term "structural deficit" at the beginning of this article since that is a made up term politicians use when they want to raise taxes. We'll cover this in a future posting.

Indeed there is a bill in the House that would repeal the tax with a hearing scheduled for March 12th at 1pm (Feel free to show up and make your position known or attend this Maryland Chamber Event tomorrow). The bill is backed by House Republicans but will likely have trouble even getting to the floor for a vote. The Democratic leadership including Speaker Busch and Gov. O'Malley have said that the expected $200 million in annual revenue from the Tech tax would need to be replaced with cuts and/or a different tax increase.

The Governor claims the Tech tax wasn't his idea, he had proposed taxes on real estate management, tanning, massage therapy and health club memberships. (From this claim one can surmise that the Governor mindlessly signs legislation that lands on his desk without reviewing it.) However these groups had time to lobby the Legislature strongly enough to avoid the extension of the sales tax to their areas. Meanwhile the House Republicans took the Democrats at their word and identified $203 million in budget cuts. I have requested further details on the proposed cuts from Delegates Anthony J. O‘Donnell, the House Minority Leader and Christopher B. Shank, the House Minority Whip.

And it gets more complicated... other states are actively recruiting Maryland tech companies to relocate and the Comptroller Peter Franchot's office hasn't even determined how the tax will work including what companies and services the tax will apply to. (Franchot has already called for a repeal of the tax.) And that clarification isn't expected until after this year's General Assembly session ends. Which means we have a bad law on the books, can't get it repealed due to stubbornness and indifference of the Democratic leadership and companies will not know the impact of the tax law until it is ready to be collected.

This is an unbelievably complete and utter public policy nightmare and the Governor and the Democratic General Assembly leadership are completely and utterly at fault. We can only hope the public remembers when elections come around again.

Disclosure: The author owns a web design business, 311 Media Group, leads a technology user group and holds a position with Z, Inc. a Maryland based IT and professional services firm. Ironically the author has been contacted for web design services from State Senator Jennie Forehand, who cast the deciding vote for the computer tax and sales tax increase during the special session last Fall, after a phone call from Governor O'Malley.

No "innocent" parties in Maryland forclosure "crisis"

Gov. Martin O'Malley (D) and Democratic allies in the Maryland House and Senate are proposing a number of changes to Maryland laws as a result of the increase in foreclosures in the State. Some seem to be valid consumer protection laws and are reasonable though somewhat burdensome to loan companies. Others, such as calling loan companies to an "emergency" meeting next week continue to add to the anti-business climate the O'Malley administration seems determined to create.

O'Malley's rhetoric continues to pit "working families" against large corporations. These are the same working families who had their taxes increased significantly by O'Malley and the General Assembly this year. Working families need tax relief as well as consumer protection and assistance from the State.

But let's be honest about the foreclosure crisis, borrowers are not "innocent" as claimed by State Sen. C. Anthony Muse, a Prince George's County Democrat in this Sun article. There is plenty of blame to go around for the subprime mortgage crisis which is resulting in the increase in foreclosures. Borrowers who overextended themselves are culpable for their participation in the lending spree of a few years ago in purchasing more house than they could afford. Why should they get State sponsored interest free loans and I shouldn't because I was wise enough to a. buy a home I could afford and b. get a boring 30 year fixed rate mortgage with a payment under $1000 per month? According to a recent Rasumssen survey, Americans fault borrowers twice as much as Wall Street and there is little consensus that the government should bail out borrowers.

The interest free loan money would be better spent on personal finance education courses and borrowers should be required to take such a course as a condition of getting the interest free loan. After all, those are our tax dollars going to bail out irresponsible borrowers.

Maryland Primary - Barack Obama keeps his eye on the ball

I had one of those all too rare experiences on the DC Metro today. I was rushing to catch the train when a kid, maybe 6, dropped a little bouncy ball on the platform. He reached for it, but knew the train was coming, so when he saw that he might not be able to get it and catch the train with mom he pulled back, ready to let it go.

I was able to reach down and snag it (left handed too) on about the fourth bounce and give it back to him. "Thanks". That was a smile I'll never forget. Don't we all enjoy the opportunity to help someone, especially a child?

As the ride home continued I thought about the joy on that kid's face and somehow I wound up connecting this very satisfying and moving little event, to Barack Obama's victory speech in Madision, Wisconsin last night. (Full text) He repeatedly mentions stories involving families, children, and interweaves those familial themes with hope in the American Dream. He believes all of America can be full of hope, joy and gratitude, like that kid.

As many Marylanders said in interviews heard on WYPR today, Obama is an "inspiration", a "once in a lifetime leader" and "won my heart" . It is indeed rare to come across a politician like Obama, seemingly comfortable in his own skin, redirecting the attention he garners back to the "Dream" and not to himself and is not only an excellent speaker, but a charismatic one.

Maryland Democrats obviously responded to the Obama led enthusiasm and overwhelmingly voted for Obama over Hillary Clinton. Will the passion crest at some point or are we all committed true believers? Will we rationally examine Senator Obama's voting record? Will we look at the facts (factcheck.org)? John McCain probably hopes so....because if the emotional momentum keeps rolling up nothing (including facts) will keep Obama from the White House.

Cell phones and driving controversy hits Md legislature, again

With the budget hastily determined in the two week special session last Fall, we are seeing bills in the legislature that seem to show up every year. For example take Senate bill 2 (full text and sponsors) which would ban use of cell phones in moving vehicles except while using a hands free device.

I think we've all seen instances of distracted drivers and some those are due to cell phone use as the sponsor, State Senator Mike Lenett, (Democrat, District 19, Montgomery County) notes in his quote to the Baltimore Sun. However, our day to day anecdotal information probably should no t be used as a basis for legislative initiatives. Personally I've seen everything from reading to writing to cell phone use to finding a kid's toy on Routes 50 and 97. Some more definitive research should be provided as part of the justification. The facts from recent studies support Lenett, however studies also say that using a hands free device is still a distraction.

It seems a more general law regarding distract driving is in order since apparently drivers do thing it's okay to read a magazine while driving in Maryland (from my purely anecdotal observations). A more general distracted driving law is more easily enforced and would immediately become part of driver's education courses.

Ironically AAA doesn't support Lenett's bill but is supporting a more limited bill (HB390) that bans text messaging while driving. I'm not sure how this could be enforced and the approach to reducing distracted driving should be broader, not more narrow to reduce all forms of distracted driving not just one particular type.

Same sex marriage bill

Well it's February and the General Session has awoken from its month long slumber of January with a number of news making and controversial bill introductions. The same sex marriage debate has kicked off yet again this year with the introduction of two bills, one in the House and one in the Senate.

The House bill (HB351 full text and list of sponsors) is actually a repeal of existing Maryland law that specifies that marriage is only between a man and a woman and replaces it with vague language about who can marry in the State. The bill is seemly confusingly and deliberately (mis)named the "Religious Freedom and Civil Marriage Protection Act". It has nothing to do with religious freedom other than exempting churches from penalty that do not wish to recognize same sex marriages. On the face of it, from the misleading name one would wonder why anyone would be opposed to such a bill. Let's hope legislators are not deliberately attempting to mislead the public.

The Senate bill (SB169 full text and list of sponsors) takes the existing Family law legal code and adds it to the State Constitution. This likely has little hope of passage in the Democratic controlled General Assembly and probably won' t even be voted on this session. But we will perpetually see this bill coming from conservatives in the Senate. If it did in fact pass the bill would have to be approved by voters since it is amending the State Constitution.

For a rational explanation of why someone would oppose the same sex marriage bill see this page at the Maryland Catholic Conference website. The basic argument is that "the ability of the marriage between a man and woman to bring about new life. This unique capacity of the union of man and woman is why marriage must be protected in law."

More info on the bill at Gay-marriage lobby set -- baltimoresun.com.