Message from the Chairman: Maryland's High Taxes Poses

a Hurdle for Northrop Grumman's Relocation

Earlier this week Northrop Grumman announced that it will move their corporate headquarters from Los Angeles to the Washington metropolitan area.  Because aerospace giant Lockheed Martin is already headquartered in Bethesda, our state might have a strong claim on snagging the corporate giant.

 

Northrop's relocation is Maryland's most significant economic development opportunity since we emerged as a big winner in the Base Realignment and Closure (BRAC) process, as a result of Governor Bob Ehrlich's leadership.  According to the Los Angeles Times, Northup Grumman employs over 21,000 people in Los Angeles County alone.

 

Unfortunately, Maryland's prospects for landing Northrop Grumman are colliding with the 2007 Democratic tax increases.  The increase in our highest income tax rate went from 8% to 9.45%, putting our state at a distinct disadvantage with Virginia.

 

For the last two years Governor O'Malley and his apologists have tried mightily to rebut the very compelling evidence that the tax increases are hurting the state's economy.   Last year when the first state tax revenue declines were reported by Comptroller Franchot, the news was met with skepticism and denial.   Sen. Rich Madaleno (D-18) even told the Washington Post  last May that it was still too soon for people to be moving from Maryland to Virginia, where individual income taxes are lower because "Trying to sell a high-end house right now is not the easiest thing to do."

 

However by November Comptroller Franchot reported that the number of Marylanders with more than $1 million in taxable income had fallen from 7,000 to 4,900 during tax year 2008 - a 30 percent drop.  Out of the people who filed as millionaires in 2007, 542 of them did not submit a full-year return in Maryland in 2008 - a drop of 8%.  The permanent exodus of just another 8% could result in costing the state more in tax revenues than it would have theoretically gained from higher tax rates. 

 

However the long term cost to the state is not just the prospect of existing high income earners moving out of the state.  It is also includes their reluctance to move to Maryland.

 

Jay Hancock in a Baltimore Sun blog post did an excellent comparison on the choices faced by Northup Grumman's executives:

"Let's assume new Northrop boss Wes Bush will make what outgoing CEO Ronald Sugar made in cash salary and bonus, which in 2008 was $4.3 million. If he settles in Montgomery County, Maryland, thanks (in part) to the state's "millionaire tax" he'll pay what I calculate to be $396,000 in state income tax and Montgomery County piggyback income tax. (This is highly simplified. I'm not counting deductions and in any given year his taxable income might be even more with option exercises, capital gains etc.)

"But if they put Northrop's new headquarters just across the Potomac and Bush lives there, he would pay only $247,000 in Virginia income tax, saving $149,000. (Again, I'm simplifying. Since he would get a bigger deduction on his federal return by paying Maryland taxes, his federal taxes might be lower if he lived in Maryland. But overall he'd still be way ahead in Virginia, especially once he started paying taxes on capital gains.)"

Maryland's so-called millionaire top tax bracket is slated to sunset at the end of this year.  However liberal activists and legislators are already calling  for the continuation of the tax. At least now they claim it will produce $100 million for the state, which is less then they claimed when it first became law.

It will be interesting to see both what the legislature does and where Northrop Grumman locates its headquarters. However should the company choose Virginia, that state's taxpayers should send a thank you to Maryland's Annapolis Democrats.  

Mark Uncapher

Montgomery County Republican Chairman

Precinct Organization for Legislative District 16

(includes Bethesda, Chevy Chase and parts of Potomac)

For the past year, we have been working on bringing volunteer lists up to date. We have been looking at each of our eight legislative districts in each newsletter.  In this issue we focus on District 16.

There are three Regional Chairs for District 16:

Mike Monroe of Bethesda is the Apartment Regional Chair mm@mikemoninternational.com Larry Lesser of Rockville is the North Regional Chair lmlesser@gmail.com and Robert Dyer of Bethesda is the South Regional Chair robert1999@hotmail.com

The following people are listed as Precinct Chairs for District 16:

Pct Voting Place             Name

Bannockburn ES (Co chair)   Keith Parsky

Bannockburn ES (Co chair)   Jim Clapp

Bethesda Chevy Chase Rescue  Frank Enten

Bethesda ES                  Phil Buford

Bradley Hills ES               Mark Uncapher

Carderock Springs ES       Carolyn Caludis

Christ Lutheran Church     Patrick Lavelle

Clara Barton Comm. Cen.Vinod Dar

Concord St Andrews MethEloise Buford

Farmland ES                    Allie Williams

Friendship Heights Village    Don Weinroth

Ivymount School               Peter Huessy

Lynbrook School Ctr           Tom & Molly Skilton

North Bethesda MS           Alex Vincent

Promenade Party Rm         Mike Monroe

Promenade Party Rm         Karen Palmer-Chesney

River Falls Swim Club           Laura Podaras

St. Jane Frances De Chantal   Joe Aukward

Tilden Ctr./Parkland             Larry Lesser

Walter Johnson HS              Sue Hall

Washington Waldorf School   Ghiyath Nakshbendi

Westland MS                     Jim Clapp

Whitman HS                      Lee Ann Knapp

In addition to acquainting district residents with

information on their districts, we also need to make

 sure we have correct information as we enter the all

important election year of 2010. If you have any

deletions, additions or corrections to this information,please contact Pat Fenati, Organization Chair at 301-253-2505 or e-mail her at fenati@verizon.net 

want to be a Precinct Chair at this time.  Look for the

future dates on the MCGOP WEB Page http://mcgop.net

Please look below in the Help Wanted section of this newsletter for a listing of precincts in need of chairs.

There are 32 Precincts in this district. We currently have chairs for 21 of those precincts. That leaves 11 precincts with no chairs. Five of the precinct chairs have attended the Precinct Training offered about once a month at headquarters.Precinct Training is free, open to all Republicans who want to get involved at the grassroots at anylevel.  It is worth attending even if you don't

The Central Committee members for District 16 are:

Robert Dyer of Bethesda robert1999@hotmail.com

Gus Alzona also of Bethesda AugustusAlzona@gmail.com

Mark Uncapher also of District 16 is an At-Large member of the Central Committee and is Chairman of the County Republican Party.

The Legislative District Chair for District 16 is Ruth Melson. Ruth lives in Kensington. She is President of the Rock Creek Women's Republican Club. In 2008 she was named the Montgomery County Republican Woman of the year and in 2009 she organized volunteers and managed the Republican booth at the Montgomery County Fair. Ruth can be reached at rockinruth@verizon.net

Vacancies for Precinct Chairs in District 16

Do you want to get involved at the grassroots level in a very important election year? Are you concerned you don't know how to do it? We will help you every step of the way. Attend Precinct Training (a two  hour class offered most months.) If your precinct already has a chair consider helping as co-chair or choose a nearby Precinct without a chair. You do not have to live in a precinct to be the Precinct Chair of that precinct.

The following precincts in District 16 are without Precinct Chairs:

Grosvenor School Ctr 

Jewish Community Center

Little Flower School Hall

Luxmanor ES

Parkside Clubhouse North

Somerset ES

St. Dunstan's Episcopal Church

Tilden MS

Westbrook ES

Wyngate ES

If you are interested in chairing one of these precincts, please call Pat Fenati at 301-253-5205 or e-mail her at fenati@verizon.net