Tea Party Republican Candidate for Anne Arundel County Executive, Steve Schuh, has a 5 point plan. See the screenshot from Mr. Schuh’s campaign website at the bottom of this piece. I have a one point response: “What?!”
Let’s go through Steve’s 5 points one at a time:
1. He wants to increase jobs and economic growth by reducing taxes and fees, starting with an immediate 3% cut in property taxes.
If Steve had done his homework, he’d know that the burden of local taxes – as measured by the ratio of local taxes to per capita income – in Anne Arundel County is already the 20th lowest among the state’s 23 counties and Baltimore City. (See the table below.) And he wants to lower local taxes (property taxes and fees) even more. Nineteen counties are already charging their residents more, relative to per capita income, than Anne Arundel County.
If Steve knows what he’s talking about, why aren’t employers in these other counties flocking to Anne Arundel County? For businesses coming from out of state, Anne Arundel County, not Howard or Montgomery, should be their first choice.
Answer: Because companies don’t move to a county because it has low property taxes and fees. What they’re more concerned about is, in no particular order, the cost of relocation, the quality of the local labor force, the cost of housing, the quality of the schools that their children will attend and the overall quality of life in the communities where their management and employees will reside.
Relocating companies care, in other words, more about how a given county spends its local taxes than how much those taxes are. Certainly a difference of a few dollars year isn’t going to affect their decision. It’s unbelievable that Steve Schuh who has an MBA in Business from Harvard and who is a self-made Alex Brown, Credit Suisse rich person – thinks that a 3% reduction in property taxes will create economic growth. Cutting property taxes by 3% amounts to a savings of only $27.30 per $100,000 of assessed value per year.
What will effect economic growth, but in a bad way, is the loss of 400 teachers, Police Officers and/or firemen and women if the county cuts $18 million out of its budget. $18 million is the total value of a 3% cut in property taxes. Steve is proposing that he generate economic growth by taking $18 million out of the county’s budget.
To his credit, but only after consider comment and criticism by those who know better, including his Democratic opponent, Steve Schuh has qualified his 3% solution with the caveat that it’s conditional upon a $70 million growth in annual total property tax revenues. Problem: $40 to $50 million annual growth is more like it, so the 3% reduction in property taxes isn’t going to happen. He’s just proposing it to get your vote.
He also has a timing problem. He’s talking in circles. He can’t reduce property tax rates until growth occurs, but it’s a reduction in property tax rates that he claims will cause growth. Hmm? And he doesn’t understand how much time it takes for growth to occur as a result of any financial incentive. You can’t lower tax rates on Monday and expect growth to show up on Tuesday, or even that month or year.
Wow. And that’s only the first of Steve’s pointless 5 point plan. We’ll tackle point two tomorrow.