Posted tagged ‘taxes’

What To Do About the Bag Tax?

7 April 2013

What do do about the bag tax?  The County Council is currently considering the question, including options for expanding the tax, increasing it, reducing the types of retail locations which must charge it, and banning plastic bags completely.
MoCo reports that the county has taken in about $2 million from the bag tax, much more than had been expected.  This demonstrates that some combination of the following conclusions is true:

(a) shoppers find bags to be convenient, and are willing to pay for them

(b) grocery shoppers have learned that plastic bags are a more sanitary way of carrying food, and are seeking to avoid the bacterial diseases associated with reusable bags

(c) the bag tax, in the end, has just been a way to raise revenues for the cash-strapped county government.

The negative effects of the bag tax are beginning to pile up:

Retail thefts and shoplifting have surged in areas where bag taxes are put into place, as it becomes much easier for shoplifters to pilfer merchandise and slip it into the shopping bags they are already carrying.  This phenomenon seems to be found wherever bag taxes (or bans) have been put into effect.

Council member Craig Rice has noted a corollary to this problem.  As department stores have become suspicious of people walking around with roomy bags, racial profiling leads to more black men being stopped and interrogated by store security personnel.

– Theft of supermarket grocery baskets has increased. Apparently, people figure that they need a convenient way to carry their purchases, but don’t want to pay extra for bags.

– Most distressingly, researchers are finding evidence of illnesses associated with these bans.  This was predictable, as shoppers are carrying fresh meat, vegetables, and fast food fried chicken and hamburgers in these bags, over and over again.   Even beyond microbial contamination, reusable bags often have toxic materials, like lead, that leach into the food people carry. Senator Charles Schumer of New York has called for a federal investigation of this problem.

One-use bags are also more sanitary.  Since people tend not to wash their reusable bags, they increase the risk of food-borne illness.  Studies of San Francisco, which banned plastic bags in 2007, reported that after the bag ban there was a spike in the number of E. coli cases and increase in deaths from foodborne illnesses.  Another study found that 8 percent of all reusable bags contained E. coli and doubted how often shoppers actually wash their bag.

– Finally, the environmental impacts of the bag tax are at question.  There is anecdotal evidence of reduced bag litter in the county’s waterways, but increased litter from bottles and food packaging, which is harder to carry without a bag.  The bag tax, in effect, creates an incentive for increasing this kind of litter.  Not only that, but the tax increases total resource consumption.  People tended to reuse plastic grocery bags for dog waste, lining trash baskets, etc.  The National Black Chamber of Commerce notes that consumption of store-bought plastic bags increased by 400 percent in Ireland, after that country implemented a bag tax.

The bag tax is a classic example of unintended consequences of legislation.  (OK, that’s a generous term.  I’d say it is an example of a failure of policy analysis).  Unless bringing in more revenue for the county government was the main purpose,  the tax is doing much more harm than good.  Certainly expansion of the tax (or a ban) would be even more harmful.


Money is Tight; Let’s Spend More of it

30 May 2011

Fiscal year 2012 begins on July 1, and we are facing a $300 million deficit.  Revenues are down, and there is no magic money (federal stimulus funds) coming to rescue us this year.
Given the deep budget deficit, you might think that the county government would be looking for ways to reduce spending. Nevertheless, the Leggett administration proposed to increase county spending by $76.8 million (about 1%) over last year.


The County Council, not to be outdone, finalized a budget this week that more than doubles the increase that Leggett proposed:  $168 million more than last year’s, representing a 2.2% increase.
The council will increase the property tax rate by 4.6% to help pay for this, along with the odious bag tax.

Leviathan winning battles in Montgomery

16 May 2011

It seemed like it was time to keep an eye on Big Government in MoCo, which has been rolling forward lately.

First, the new bag tax.

Then, the (admittedly coerced) agreement to divert resources from crime to tracking immigrants.

And now, distressingly, more bad news from the education front.  Incoming schools superintendent Joshua Starr (who looks like a real loser so far), is adding to that initial impression.

Starr told the Gazette recently that he doesn’t see the need for any charter schools in Montgomery.  Charter schools, I shouldn’t need to note, are those which would be outside of Starr’s control.

I’m Sorry, But…

18 March 2009

County Executive Ike Leggett yesterday announced his projected budget for fiscal year 2010 (which begins July 1).  This budget is a 2% increase over last year, which is relatively restrained.  Nevertheless, one has to ask: Why is it higher than last year at all?  If revenues are so low, why isn’t the County Executive proposing a budget that spends *less* than last year?

The press release notes that the budget provides no cost-of-living increases for those county employees who are fortunate enough to keep their jobs.  However, the budget projects that at least 234 employees will lose their jobs.

It’s never a good time to get laid off; this is a particularly lousy time for it.  But let’s be sure we understand why this is happening.  The county is facing a tremendous gap between what it spends and what revenues are coming in.  The shortfall will increase next year by another $250 million.

The reason for this is a continual pattern of profligate spending by the county government.  In each of the past ten years, the government budget has increased by nearly 7%. Over the past five years, the average increase has been closer to 7.2%.   (Okay, readers:  how many of you consistently increase your spending 6-8% every year?)

The County Council and Executive have had no brake on their spending.  No thought was given to fiscal restraint, concern for the taxpayers, or even the possibility that sky-high tax revenues might not continue forever.  The philosophy was: If you’ve got it, spend it.  And if you don’t got it, spend it anyway.  This is just the chickens coming home to roost.

New Math at the Spending Affordability Committee

19 December 2008

Each December, the Spending Affordability Committee makes a recommendation to the governor and to the Legislative Policy Committee regarding the budget for the upcoming fiscal year. In setting the fiscal framework for the budget, the Committee defines what would be an “affordable” level of spending, in relation to anticipated revenues and the overall state economy.

As the Committee defines its mission, “The Committee’s primary responsibility is to recommend to the Governor and General Assembly a level of spending for the State operating budget that is reflective of the current and prospective condition of the State economy.”

In December, the state Board of Revenue Estimates issued a further revision to their projection of state revenues for the upcoming fiscal year. At this point, they expect the state to run a total deficit of $1.9 billion.

Given that wonderful news, here’s a quiz:

On Wednesday, the Spending Affordability Committee came out with their recommendation for state spending for that fiscal year. Did they recommend:
a) spending less money than the current year?
b) spending the same amount than the current year?
c) spending more money than the current year?

Sorry, no prizes for the winning answers. It’s just too damned easy.

Parents’ group lobbies for higher taxes; Barve seeks to oblige

5 September 2008

Parents are the most highly subsidized group in Montgomery County.  They get an annual gift of over $20,640* per child from the taxpayers (Okay, it’s not really a gift if I am forced to give it to you, but let’s leave that aside for the moment).  The Gazette reports on a group of parents who thinks that isn’t enough.

They are complaining about small fees charged by schools for extra expenses, supplies and equipment associated with certain activities.  These fees are generally charged for workbooks (which can’t be shared with the next year’s students), , materials for art and photography classes, food costs for international cooking classes, calculators, and other costly “extras.” Right now, these are considered to be incremental activities (beyond the school curriculum and resource base) and students are asked to pay for these additional expenses – if they can afford it.  If they can’t, the school system provides these add-ons for free.  The charges are generally small (less than fifty dollars), but these parents aren’t complaining on the basis of the burden.  They insist that everything provided through the school system should be completely paid for through taxes.   One parent showed up at a school board meeting to request a refund of $8 in towel fees paid for her high school teenager.

Montgomery delegate Kumar Barve seems to have been inhaling the populist air from Denver and St. Paul.   He is seeking to propose a bill that would make it illegal for school systems to charge students fees.  His rationale: “The purpose of public school education is to allow each child to get a great education regardless of their economic background.”  But since everyone gets these services, whether they can afford it or not, no one is being deprived right now.  The only issue is whether parents should bear any portion at all of the costs of extra activities for their children.  For some parents – and for Delegate Barve – the apparent answer is “no.”

*That’s a school operating budget of $2.067 billion, plus capital budget of $778 million, serving 137,763 students this year.

How Governments are Different from Real People

26 June 2008

Both the state and the county have been whining about being in bad financial straits. Tax receipts are down, and it seems like we can’t spend as much as we want to. When real people find themselves in a financial bind, they reduce spending. When governments get in a bind, they increase spending. The General Assembly passed a state budget for the upcoming fiscal year, increasing spending by 4.5%. The County Council passed a budget last month that increased spending by 4.3%. Since inflation is running about 3.9%, these spending increases are not just about “keeping up”; they are about spending more than we ever did before.

How do you spend more when tax receipts are down? Increase taxes, of course. The General Assembly, as we remember, passed a record-breaking set of tax increases, amounting to $1.4 billion.

The County is more limited. County Executive Leggett and council members are crowing that they passed a budget without increasing the property tax rate; which is true. However, they did increase property taxes. How? The County Charter – equivalent to the Constitution – restricts how much property taxes can be increased in a single year. Faced with that, the council members yawned – and voted to override the charter. Again. Which means, your property tax bill goes up, again.

And it’s not just property taxes. Other tax increases include:
– Increase in (county) income tax, to the maximum the State allows
– Increase in the energy tax (more than quadrupled since 2003)
– Increase in the telephone tax.

Pony up, folks! We need to subsidize the new concert hall in Silver Spring, and the athletic facility in Germantown, and the old concert hall at Strathmore, and all manner of pork.