Ed Priola for Delegate

Last Wednesday, I testified in the Maryland Senate Budget and Taxation Committee in opposition to Senate Bill 354, legislation calling for implementation of "combined reporting" in the state beginning January 1, 2011.

Combined reporting is a legal requirement that a multi-state corporation must (1) report all of its income to the state, even that which was earned outside of the state's borders, and then (2) pay taxes based on how much business the state thinks actually occurred within the state.

I am primarily opposed to implementing combined reporting at this time because it represents an enormous rush to judgment by the Maryland Assembly that will drive businesses out of Maryland.

Proponents of combined reporting, such as Delegate Frank Turner (D- Howard County), like to point out that it has been adopted in 23 other states. What he and others leave out is that the results from its implementation are at best a mixed bag. A number of studies conducted by state governments and economists call into question the claim of any certain increases in tax revenues. Rather, these studies show that combined reporting produces unpredictable revenue results and, over the long run, may actually reduce corporate tax revenues. At least two states, New York and Vermont, ultimately lost income under combined reporting ($680 million and $2.7 million, respectively).

The Maryland General Assembly does not yet know or understand the full impact combined reporting will have on Maryland's businesses and tax revenues. That is why they set up a Commission to study it for at least another year. What we do know is that combined reporting is not only a tax, but also a significant regulatory burden. Implementation requirements fall most heavily upon smaller businesses and more fragile business sectors.

According to the October 1, 2009 report of the Maryland Business Tax Reform Commission, the estimated effect of combined reporting varies wildly between different business sectors, with multimillion dollar swings canceling out to a net gain of $109-$170 million for the state (using 2006 data). 2,418 businesses would be paying more in taxes and 1,906 businesses would be paying less, causing massive shifts in tax liability, rather than closing tax loopholes.

Delegate Turner said the "winners and losers" aspect is merely a function of combined reporting instilling fairness in the tax structure. He also stated that "combined reporting levels the playing field, and makes it a lot more fair." I say that implementing an unproven tax system in the middle of a recession is unfair, irresponsible and threatens Maryland's business stability. It will cause more suffering for working families.

It should be remembered that corporate income tax is only a fraction of the total taxes companies pay to state and local governments each year. Companies also pay sales taxes, property taxes, etc., all of which add up to millions or billions of dollars each year. Encouraging companies to leave Maryland could have a larger negative effect on the state's revenues than the potential increase in corporate income tax.

The bottom line is that corporations do not pay taxes; individuals do. Increases in corporate tax rates will be passed on to consumers and will only serve to increase prices, reduce employment and lower the overall amount of our state's wealth.

For all these reasons, I urged the General Assembly to resist the impulse to increase business taxes in the depth of a recession and to let the Commission they set up complete its study.

Here is a excerpt from a recent article published in The Baltimore Sun entitled Affordable Housing Remains a Dispute in Columbia Rezoning:

[...] The Tuesday night hearing also dealt with a citizens' commission's recommendations for modest pay increases for the county executive and council members elected in November. The commission, required by county charter, suggested raising council members' pay $500 plus annual inflation adjustments, with the chairman's differential increasing from $1,000 to $2,500 more per year. The new executive would get $2,500 more per year plus inflation. That would mean the executive who takes office in December would start at $162,698, and council members would get $53,900, though current members have donated a portion of their pay due to the recession. The council can accept or reduce the recommendations, but not add to them.

Only one person, Republican candidate for the House of Delegates Ed Priola, spoke on the bill, opposing any pay increases. Questioned by Chairwoman Courtney Watson, Priola said he'd like to see council salaries cut in half, to about $26,000.

"This is a position many people would serve in for $1 a year," he said. [...]

Click here to read the full story

On January 8, 2010, during Delegate Warren Miller's annual Legislative Breakfast, I signed the Taxpayer Protection Pledge of "Americans for Tax Reform," committing to "oppose and vote against any and all efforts to increase taxes."

To read more about the Taxpayer Protection Pledge, visit http://www.atr.org/taxpayer-protection-pledge-a2882.

In a democracy, information about the process, not just the end results of policy decisions that impact our jobs and families, is critical. So why is it that so many politicians try to keep us in the dark? It’s simple: knowledge and power are entwined and they want to monopolize both.

A case in point was last week’s U.S. Senate Finance Committee decision to reject a proposal that would have made health care legislation, along with its cost, public on the Internet 72 hours before it is voted on. The single-party ruling political elites rejected the proposal despite a recent Rasmussen poll showing that 83% of the public supports the idea. By the time most citizens heard about it, it was too late to do something about it.

Undeniably, sunlight is still the best antiseptic for government arrogance. The more citizens see politicians’ behavior in real time, the more they can take action to blunt it.

Let’s start shining more sunlight in Maryland to end the one-party stranglehold on information coming form our state legislature. Let’s start with a common sense plan of broadcasting unfiltered television and Internet coverage of all state legislative activities, just like C-SPAN does for Congress. Let’s call it “MD-SPAN” (Maryland Sunlight Public Affairs Network).

MD-SPAN will bring government decisions closer to citizens for their scrutiny. We will hear and see exactly what our representatives are doing with our tax dollars, in real time, so we can act if necessary. We will also likely increase the amount of hours legislators work on the legislative floor. According to one study, since C-SPAN began covering Congress in 1979, the U.S. House of Representatives sessions have increased by about two minutes per bill and the Senate sessions by about four minutes.

With 43 states and many localities having adopted the C-SPAN model of broadcasting the activities of elected officials, why hasn’t Maryland? New York voters have had access to televised proceedings of their legislature for several years. The Florida Channel offers television coverage of all three branches of Florida's government. Oregon offers unedited cable coverage and live streaming video.

Maryland’s local jurisdictions are increasing their government coverage. The Howard County Council began live-streaming its sessions this month. Prince George’s County Council sessions are videotaped and broadcast on the county cable system on the same day. Baltimore City Council meetings are televised live and re-broadcast.

Despite the widespread availability of technology, the majority party in the Maryland General Assembly has not loosened its grip on the public’s access to its decision making process. According to its website, “Maryland General Assembly's legislative information is updated each night during the 90-day session.” But, to receive more frequent “up-to-the-minute” updates you must pay $800 for an annual subscription.

MD-SPAN is a step into the 21st century and an idea that’s long overdue.

Here is a excerpt from recent article published in the Columbia Flier entitled Two GOP Candidates Name Tax Hikes in Top Concerns:

[...] Edward Priola, a Columbia Republican, is running for a seat representing District 13 in the Maryland House of Delegates. [...]

He said he is concerned about tax rates in Maryland and Howard County.

"It's not fair to pass the poor management on the backs of civil service employees," he said. "Furloughs are just the wrong way to balance the budget."

Priola called Maryland state government an "effectively dysfunctional system" and said he believes more common sense is needed within the legislature.

"I think the real problem is that, for the most part, lawmakers are not doing their homework, not reading the laws they pass at any levels," he said. [...]

Click here to read the full story

Take a look at the two articles in the "News" section covering my activist days when I helped stop the Clinton health care takeover and promoted limiting the terms of incumbent politicians. The same stories could be written today. Let me know what you think. See you on the campaign trail!

Welcome to the web site!