Before I begin my weekly letter, I want to express my sorrow to the families of those lost in last night’s plane and helicopter crash over the Potomac River, and my thanks to all first responders, including the Anne Arundel County Fire Department divers who have been working at the scene. My heart and prayers are with you all.
I wanted to lighten the letter up this week. I was going to share my experiences at Fort Meade Garrison Commander Colonel Gore’s New Years reception, at the Firefighters’ Italian Dinner, at the Visit Annapolis and Anne Arundel 35th Anniversary Event, meeting with Congresswoman Elfreth and her staff about county priorities, meeting with my Maryland Association of Counties (MACO) peers and the Presiding Officers of the General Assembly, and Budget Town Halls in Districts 7, 1, and 4.
I like bringing you along on my travels, and sharing the humor, the passion, and the good work that I see. But I have an obligation to tell you when there are dark clouds permeating those meetings and events.
Deportation quotas, trade war threats, aggressive assaults on efforts to create diverse and inclusive workplaces, firings of the people who report fraud and waste in government agencies, and the freezing of taxpayer dollars that were allocated by the duly elected representatives of the taxpayers themselves by one man who thinks it’s his money to spend as he chooses - these have major impacts on the work of local government.
It’s like confronting a natural disaster. It’s all hands on deck.
We have sixteen county departments that depend on some federal funds. That’s close to $34 million in operating funds, plus another $166 million committed to our budgeted capital projects. That doesn’t include direct federal support to the approximately 140 thousand county residents who rely on Medicaid for health insurance. Our public schools depend on about $93 million in federal support, and we don’t have accurate numbers for how many of our residents earn their livelihoods from jobs that are federally funded in the public, private, and nonprofit sectors. It’s huge.
We could just laugh the threats off, and assume that the courts will block the administration’s attempts to shut down this segment of our economy, but that would be irresponsible. We know that court challenges can take years, and that a majority of the Supreme Court has already emboldened lawlessness in the White House by ruling that Presidents are suddenly immune from prosecution for violations committed as official acts. Our residents take these threats to their livelihoods seriously, and local government must do so as well.
We’ve asked all of our departments to monitor and report the impacts of these federal actions on their work and on the residents they serve. What we’re discovering is that while there are real impacts on public safety and quality of life for all of us, the greatest impacts are on programs that serve our most vulnerable residents, people at the lowest end of the income scale. Housing, aging and disabilities, workforce development, health, and antipoverty efforts tend to be federally funded. These programs are targeted for cuts, and the impact would be a massive increase in poverty.
We knew that as a county we’d have a tight budget year coming, but if the federal government reneges on its obligations to deliver committed funds, we will have to make new decisions about priorities.
When natural disasters wipe out vulnerable communities, as they often do, the federal government steps in with assistance. We can’t turn to the feds when they deliberately create the crisis. We can’t ask for charity from neighboring jurisdictions or the state. We all face the same challenge.
Common sense suggests that the disaster relief funds should come from where the money sits. Over the last 50 years our country has seen a movement of $50 trillion from the bottom 90% to the top 1% of earners. In our county, the top earner ranks have more than doubled in the last eight years.
It would be nice if the people with multiple homes and massive stock portfolios would donate what it takes to keep our neighbors out of poverty, but they won’t. Our only solution is to do what state and national polling consistently tells us that majorities of Democrats and Republicans favor - increasing taxes on wealth.
Our country’s greatest economic expansion took place between 1936 and 1981, when income taxes on the wealthiest Americans was 70% or higher. The middle class grew, and fueled economic growth with its spending.
Rates for top earners dropped in 1981, 1986, 2001, 2003, and 2017. Today, the top tax bracket pays 37% on income, and the super-wealthy, who live primarily off of investments, take advantage of a tax code crafted by their lobbyists that reduces their tax burden far lower.
The new administration and the new Congress have identified more tax cuts for the wealthiest Americans as their top legislative priority, and their plan to pay for the loss of revenue is to drastically cut social programs under the guidance of the richest man in history. Elon Musk, who accumulated his wealth from the pockets of taxpayers through massive government contracts, bragged that he’ll cut $2 trillion out of the federal government’s $1.7 trillion of discretionary spending.
Unfortunately, Maryland law prevents counties from taxing wealth to prevent or reduce poverty. There is a state-mandated income tax cap of 3.2% that most counties have already reached. Our county’s rates are below that for most of our residents, but households with taxable income over $480K (individuals over $400k) already pay 3.2%, so we can’t raise more money from them.
I testified in support of a state bill this week that allows counties to go to 3.7% for top earners (Senate Bill 70 / House Bill 151), and another bill that allows counties to tax commercial property - with a small business exemption - a bit higher than residential (House Bill 23). Both bills are supported by MACO, because counties are all being forced to provide more services with no ability to raise revenue other than across-the-board property tax increases. I don’t know if we’d use these new tools in a future Anne Arundel County budget, but I do know that the decisions should be made by local elected officials who represent local taxpayers. That’s what these bills allow.
We’re all hoping that President Trump will recognize that the impacts of the policies he has proposed will cause harm to the people who elected him, and will choose a less destructive path. But just as we prepare for natural disasters, we must prepare for this.
Until next week…