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Bloated Budgets are a Bipartisan Trend in Maryland, New Analysis Shows

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(Alexandria, VA) -- Through good times and bad, Maryland taxpayers have done all the work of raising revenue, but have received few of the benefits, according to a new study from the non-partisan National Taxpayers Union Foundation (NTUF). After reviewing years of data, NTUF found that government growth in Maryland has continued unabated without regard to taxpayers' interests.

Study author Sam Batkins noted, "Maryland is one of the richest states in the United States. Maryland's politicians have taken note of this affluence, and despite an average annual increase in total revenues of 4.7 percent from 1993-2003, total spending has risen at an even faster average rate -- 8.2 percent each year."

The study found that if Maryland had restrained spending to population growth plus inflation (about 3.5 percent) over the last ten years, the state's budget would be just over $21 billion, rather than the $30 billion budget Governor Ehrlich submitted last month. Taxpayers could have saved up to $9 billion (approximately $1,600 per capita) if Annapolis had enacted spending limits. Instead, Annapolis decided to increase annual spending drastically, muting the potential opportunities for tax cuts.

To illustrate how Maryland's spending machine grinds on in boom and bust years, Batkins showed that over a four-year period (1998-2002), yearly net revenues averaged out to an anemic 0.3 percent rise (in three of the four years receipts actually declined). During the same interval, however, average annual spending jumped 10.2 percent -- "hardly indicative of a government living within its means," he said.

Furthermore, the budget submitted by Governor Robert Ehrlich represents the largest budget (in nominal terms) in Maryland history. Among the lesser-known provisions are $3.5 million for an aquarium and nature center, and $8.3 million for a sports complex and new minor league baseball stadium. According to Batkins, however, the budget did include some bright spots for taxpayers. A 15 percent state property tax reduction and an expanded Homeowner's Tax Credit should provide much needed relief to overburdened "Free State" residents.

Batkins noted that the current budget request increases spending at the fastest pace in over a quarter century. Overall spending in Maryland is set to increase by $3.2 billion, or over 12 percent. "Even with a surplus of almost $1.2 billion, Maryland taxpayers fail to benefit from the prosperity they have created," Batkins wrote.

"Maryland is one of the richest and most educated states in the U.S.," Batkins concluded. "It should be a destination for aspiring entrepreneurs and young professionals. Annapolis, however, has shown the propensity to tax and spend first, and think about taxpayers last."

NTUF is the research and educational arm of the 350,000-member National Taxpayers Union. Note: NTUF Issue Brief 152, Maryland's Fiscal Folly: The Taxpayer's View is available online at www.ntu.org.

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