MARCH 25, 2004

Madam or Mr. Chairman, and committee members, my name is Richard Falknor, and I am a property owner in Calvert County, Maryland, and was an employer and publisher there for over fourteen years. Today I am an officer of the Maryland Taxpayers Association, Inc.

We believe the Colorado model of a Taxpayer Bill of Rights is an important constitutional model for all states to consider, and we also are convinced that the Colorado TABOR has contributed significantly to that state's prosperity even during the recent recession.

We would also point out two illustrative facts from the Fiscal and Policy Note accompanying the identical SB 601 and HB 1130.

First, Maryland has already been spending significantly in excess of population growth and inflation:

Second, had our proposed TABOR rules been in effect, Maryland taxpayers would have been entitled to substantial refunds:

"HAD THIS AMENDMENT BEEN IN EFFECT FOR THE LAST FIVE FISCAL YEARS, REBATES WOULD HAVE BEEN ISSUED IN FISCAL 1997, FISCAL 1998, FISCAL 1999, FISCAL 2000, AND FISCAL 2001 TOTALING ABOUT $208 MILLION, $371 MILLION, $548 MILLION, $703 MILLION, AND $477 MILLION RESPECTIVELY. THE AVERAGE TAX LIABILITY FOR THE 2,104,391 TAXABLE RETURNS FILED IN 2001 WAS $4,658. BASED ON THE AMOUNT OVER THE ESTIMATE, EACH TAXABLE RETURN WOULD HAVE BEEN ELIGIBLE FOR A REBATE OF APPROXIMATELY $227 IN 2001."

Let us turn briefly to the very important matter of education spending.

MTA's own preliminary research on Maryland spending for public education - - - THE MYTH OF MARYLAND'S "UNDERFUNDED" PUBLIC SCHOOLS - - - confirms the national scholarly consensus that - - -

"Throwing more money at education will not improve Maryland schools, especially when an ever-growing percentage of education spending goes for areas other than instruction. The numbers speak for themselves. Our schools are not underfunded. The problem lies elsewhere, and the solution must be sought in reforms other than increased spending."

"For example, a 2003 study of high school graduation rates from the Census Bureau's American Community Survey strongly suggests that the connection between education spending and academic achievement is tenuous."

"The top states for graduation rates were Wyoming (90.2%), Utah (90.1%), Minnesota (89.8%), Alaska (89.7%), and Nebraska (89.3%). The national average is 82.6%. Census Bureau figures show that four of these top five graduation states spend around the per-student national average of $7,376. (Alaska is the exception, spending $9,216.)"

"Maryland spends above the national average at nearly $8,000 and it came in 23rd with an 85.2% high school graduation rate."

Long-time education watcher George Liebmann and head of the non-profit Calvert Institute makes this salient point about the so-called Thornton Plan whose money requirements appear to dominate our state budget discussions:

"THORNTON unaltered is the worst thing that can happen to education. The five-year Thornton program, which would enhance Maryland's public school appropriations by $1.3 billion, is a big mistake. The inadequacy of public high school education is the most serious problem this nation confronts, but Thornton is a case of more means worse. Appropriations for future years should be stretched out and conditioned on reforms."

MTA well appreciates that the dominant perspective of this committee is a different one than we share. But we would also point out that the TABOR is becoming a live approach in the legislatures of other states - - - notably Minnesota where the concept of a tax and expenditure limitation has the backing of Governor Pawlenty.

Consequently MTA asks only that the citizens of Maryland be given an opportunity to vote on this important development arising from our creative Federalist system. If Maryland's citizens view their state and local government systems as the government class in Annapolis view it today, TABOR will surely not be adopted. But an emerging Maryland political culture may indeed adopt a Maryland TABOR.