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When Gov. Martin O’Malley brought his latest package of budget cuts to the Board of Public Works on Wednesday, some of the loudest objections came from Maryland’s private colleges and universities, which faced a $9 million reduction in the funding they have traditionally received to help pay for financial aid for Maryland students and to support educational programs that public universities don’t offer. They succeeded in knocking the cut to what is known as the Sellinger program down to $7 million, but even that, college officials say, is an extreme hardship. The recession is squeezing families’ finances and forcing students to seek more financial aid than ever at a time when college endowments have taken a beating, and the drop in state aid will only exacerbate a bad situation.

Even so, Gov. Martin O’Malley was perfectly justified under the circumstances in reducing the flow of state funds to private institutions. He has cut more than $1 billion from this year’s operating budget, affecting the operation of every state agency. Drug addiction treatment, mental health care, social services, assisted living for seniors, HIV prevention and homeless services were all cut in this round of budget reductions alone. The private colleges are lucky they didn’t fare worse.

According to an analysis by the Department of Legislative Services, Maryland has historically funded private colleges and universities more generously than any other state, both in terms of the percentage of the state budget devoted to them and in raw dollar terms. Under state law, Maryland is supposed to give private colleges and universities 16 percent of what it would spend on an equivalent number of students at a public university, though that standard hasn’t been met in recent years. If Sellinger were fully funded, it would amount to $66 million this year.

Only 14 states provide any money at all to private colleges, and only two states with which Maryland competes economically — New York and New Jersey — provide money through a formula like Maryland’s. Most just support specific programs that public institutions don’t offer in those states. In fiscal 2007, the most recent year for which Department of Legislative Services statistics were available, Maryland spent 3.4 percent of its higher education budget on private institutions. Pennsylvania was the nearest competitor at just 2.2 percent.

Still, there is a reason Maryland supports private institutions of higher education. When the state comes out of this recession, it should look carefully at all of the things that were cut to find ones that need not be restored. But Sellinger funds shouldn’t be one of them. About 80 percent of the money goes toward financial aid, which is limited to Maryland residents. Helping pay for more Maryland students to stay in state for college is an excellent investment; the $38 million in remaining Sellinger funding probably does as much to help secure Maryland’s economic future as anything the Department of Business and Economic Development does with its nearly $100 million budget.

Maryland has concluded that it should focus its economic development efforts on biotechnology, research, medicine, engineering, computer science and other high-tech fields that take advantage of our already highly educated work force. We may not be able to afford it now, but in the years to come, the state needs to maintain and expand its investments in higher education — including aid to private colleges — if that strategy is to succeed.

Correction: An earlier version of this editorial included an incorrect figure for the budget of the Department of Business and Economic Development. The Sun regrets the error.

Posted by Andy Green at 5:27 PM | Permalink | Comments (123)
Categories: State House
        

In case you missed it, The Sun reported a couple of days ago on Gov. Martin O'Malley's speech to an assembly of Maryland school superintendents in which he implored them "to really get focused on ways that we can do things together that we can save money, because we're going to need every innovation, every cooperation, every coordination that we can possibly muster." The ideas he mentioned: Standardizing design for new school construction, putting solar panels on the roofs of schools to save electricity, banding together on bulk purchases of supplies and buying furniture built by Maryland prison inmates.

Really? Maryland has a $2 billion budget shortfall next year. Nearly half of state spending ($5.3 billion out of a $13 billion general fund budget) goes to education. And we're going to ask schools to help solve the problem by buying in bulk?

It's a testament to Mr. O'Malley's priorities that he has held K-12 education harmless as much as he has so far. In the hundreds of millions in cuts he has made, virtually none of it has affected schools, and he has not turned back the historic K-12 spending increases mandated by the Thornton education plan.

Schools are, indeed, one of the best things Maryland has going, and they're worth prioritizing. But there comes a point when protecting them at all costs does irreparable harm to other public priorities -- health care, the environment, public safety, etc. If we haven't already reached that point, we almost certainly will in the next few months.

It's a safe bet that, as much as he'd like to avoid cutting education in an election year, Mr. O'Malley is going to have to before this budget crisis is done. He should start a conversation about more significant ways to do that than standardizing design of schools we probably can't afford to build anyway.

Posted by Andy Green at 8:20 AM | Permalink | Comments (17)
Categories: State House
        

The AP reports this morning that members of the American Federation of State, County and Municipal Employees held a protest in Annapolis yesterday urging the state to dip into its $640 million rainy day fund to help avoid steeper budget cuts. Normally, such an idea is heresy -- bond rating agencies demand that the state keep at least 5 percent of its general fund in reserve to maintain the AAA bond rating (which was recently re-affirmed), and no matter how bad things get, the state never goes below that figure. The rainy day fund has become less what its name implies and more the price of getting the seal of approval from Wall Street.

But while it would be a mistake to delve too deeply into the fund, there's a case to be made for using at least some of it in the fiscal year that starts next July, provided it's part of a well defined plan and not a stab of desperation. For one thing, the lower our revenues go, paradoxically, the less we have to keep in reserve. The $640 million is enough to support the $13 billion or so we're now spending, but as more cuts are made, we'll need less. Effectively, cutting $1 billion from the budget gets us $50 million to play with from the rainy day fund.

For another thing, Maryland could make the case to the bond rating agencies that a small, temporary dive into the fund is warranted given the fact that slots are, finally, coming on line. The first parlor, at Ocean Downs, is expected to be up and running by Memorial Day, and approval for a Cecil County site isn't far off. The two are likely to be producing revenues sooner than state budget analysts expected. We're nowhere close to the $600 million in annual slots revenue that officials hope we might one day get, but we could probably justify at least some use of the rainy day fund in the meantime, especially if we see movement soon from the Anne Arundel County Council on zoning for the Arundel Mills casino, or if the Baltimore slots proposal moves forward.

More extensive use of the fund would require broader solutions. A ticking time bomb in the budget is teacher retirement fund payments. The federal government is now picking up a chunk of the tab through the stimulus bill, but that runs out in fiscal 2011. If the General Assembly decided this spring to start shifting some of those costs to the counties -- a move that makes sense from a budgetary perspective anyway -- Maryland could probably justify dipping farther below 5 percent for a year.

What difference does $50 million or $100 million make when Maryland is facing a budget shortfall of as much as $2 billion? It means that many fewer painful choices have to be made. To put it in context, the mental hospital the state is closing on the Eastern Shore would cost perhaps $9 million to keep open. An extra $100 million could save hundreds or thousands of state workers' jobs. It wouldn't solve Maryland's problems or even prevent a lot of heartache in the coming months, but every little bit helps.

Posted by Andy Green at 8:57 AM | Permalink | Comments (14)
Categories: State House
        

Baltimore County Executive James T. Smith Jr. has drawn a lot of attention recently for indicating an interest in the District 7 state senate job soon to be vacated by incumbent Republican Andy Harris, who is expected to run for the 1st District congressional seat next year.

Of all the commentary and speculation to emerge from this, the most intriguing is the observation put forth by Republican Del. Pat McDonough to Sun columnist Laura Vozella that the county executive, a Democrat who was born and raised in Baltimore County, is a "carpetbagger."

First, let's just all agree that's a wonderfully ironic idea considering that Senator Harris lost his first bid for Congress, in part, because the Cockeysville resident was seen by many Eastern Shore voters as a bit of a carpetbagger himself. The senator, an anesthesiologist, has since decided to set up a part-time practice in Salisbury to try to correct that impression.

But at least it's more than 100 miles from Cockeysville to Salisbury. Mr. Smith is originally from Reisterstown and works in Towson. That's not exactly a world away from Cockeysville. A Baltimore marathon set up between Reisterstown and Cockeysville would be a race 16 miles too short, unless participants are forced to run extra laps around Owings Mills Mall.

Continue reading "The 10-mile carpetbagger test" »

Posted by Peter Jensen at 10:59 AM | Permalink | Comments (6)
Categories: State House
        

 You have to hand it to Del. Pat McDonough. Just as the overblown scandal involving the brainless actions of certain ACORN employees was dying down, the outspoken Baltimore County conservative has jumped into the fray -- determined, it would seem, to squeeze a few more drops of blood from this  stone.

Delegate McDonough -- who is seriously considering a run for governor in 2010 -- is perhaps best known for his over-the-top opposition to any measure that could potentially, somehow, somewhere help an illegal immigrant. He is, of course, entitled to his belief that undocumented immigrants are a scourge upon our state. Even many of those who agree with him on this point, however, probably thought it was a little weird when he introduced a bill last year that would have made it a crime in Maryland for a lawmaker to support legislation that would benefit illegal immigrants. (Vote for prenatal care: Go to jail!)

Now McDonough appears to have a new enemy in his sights: community organizers. He has announced plans for legislation to crack down on "ACORN-like" organizations suspected of misusing taxpayer money. McDonough told me that the bill would actually apply to any group, either nonprofit or for-profit, doing business with the state. The idea is to create an easier and faster process for state officials to conduct such investigations, and to require groups benefiting from state largess to quickly reveal any financial difficulties or major financial activities.

That sounds good, but the ACORN controversy was clearly the impetus for this, and ACORN has no business with the state of Maryland. So what's really going on here?

Continue reading "Del. McDonough vs. community groups" »

Posted by Michael Cross-Barnet at 10:00 AM | Permalink | Comments (8)
Categories: State House
        

Laura Vozzella is reporting that Baltimore County Executive Jim Smith is selling his house in Reisterstown and moving to an apartment in Cockeysville, with the thought of possibly running for state Senate in the 7th District (now represented by Sen. Andy Harris, who is probably going to run for Congress).

Really? When Dutch Ruppersberger finished his two terms as Baltimore County executive, there was a strain of thought that saw Congress as a step down -- much less the General Assembly.

But think of it another way. Smith is sitting on more than $1 million in campaign cash, way more than he would need for a Senate race. That puts him in a position, should he choose to take it, of being an even bigger kingmaker in that body than longtime Senate President Mike Miller.

A big source of Miller's power (besides an uncanny sense of the politics of his chamber) is his ability to funnel campaign cash into fellow Democrats' coffers. In the last two cycles, Miller has funneled about $900,000 to the candidate slates to which he belongs. Smith could match that tomorrow. Miller, ever since pulling a Favre a few years ago, has been grousing that he can't find a successor who would be able to keep up with the fundraising that he has found so essential to the Senate presidency. Well, maybe he's found his man.

Posted by Andy Green at 2:11 PM | Permalink | Comments (5)
Categories: State House
        

In Annapolis, when the going gets tough, it's time to make it appear like you're suffering, too. Let us not shed too many tears for Maryland lawmakers for surrendering their free E-Pass transponders and their days of toll-free driving.

House Speaker Michael E. Busch and Senate President Thomas V. Mike Miller announced the sacrifice Wednesday and justified it as a way to "find efficiencies and reduce unnecessary spending wherever possible."

Well, that may produce savings running into the tens of dollars -- or none at all since lawmakers receive $500-a-year expense accounts for business travel costs that could be applied to tolls instead. What's next? Are they going to start charging for coffee in the Senate lounge? Make the restroom stalls dime operated? Force all legislators to share magazine subscriptions?

How typical that in the midst of a budget crunch, lawmakers have chosen to self-flagellate with a feather. No doubt the fact many of their constuents are complaining loudly about the new $1.50 monthly fee on E-ZPass subscriptions had more to do with this decision than any phantom savings. 

Continue reading "No free E-ZPass? Oh, the humanity." »

Posted by Peter Jensen at 12:15 PM | Permalink | Comments (6)
Categories: State House
        

Jamie Smith Hopkins reports this morning that Maryland businesses are due for a big jump in the unemployment insurance tax they're assessed next year because the surge in the unemployed has depleted the state's fund. The increase in 2010 is expected to range from $136 per worker for companies who haven't laid anyone off to $383 per worker for companies with many layoffs.

So companies that are struggling already will get hit the hardest? Does this make sense?

It hasn't always been this way. Previously, increases were spread out evenly at times when the state had to assess them, but businesses with no layoffs felt the system was unfair because they were, effectively, being penalized for something they didn't do.

Which is better, a system that hits companies that have laid people off harder, or one that spreads more of the pain to companies that didn't cause the problem in the first place?

Posted by Andy Green at 9:45 AM | Permalink | Comments (14)
Categories: State House
        

People can sound a lot like teen-agers when it comes to matters of government finances. Given the choice between homework and chores, my 13-year-old daughter's position is clear enough: None of the above.

That's a lot like what the latest state-wide Gonzales Research & Marketing poll that found. Most Marylanders oppose either spending cuts or new taxes to balance the state budget. Gee, what does that leave, wishful thinking?

You can't blame the poll respondents, of course. Balancing the family budget is tough enough and usually requires detailed knowledge about such esoteria as how long one can delay paying a bill before the nasty calls start coming or BGE shuts off the power.

How many people are in a position to know -- at least with any certainty -- how best to avoid the looming $2 billion state shortfall in Fiscal 2011? That leaves it up to elected officials to make informed choices and educate the public about how they arrived at those conclusions.

Continue reading "The lesser of two evils is still evil" »

Posted by Peter Jensen at 9:20 AM | Permalink | Comments (6)
Categories: State House
        

There's a new Gonzales poll out with a hypothetical matchup between Gov. Martin O'Malley and former Gov. Robert L. Ehrlich Jr., and the numbers can't be terribly comforting for Team Ehrlich as the Republican contemplates whether to jump back into the political fray.

The poll has O'Malley leading his predecessor 49-38, with 13 percent undecided. Ordinarily, a showing of under 50 percent isn't stellar for an incumbent, but given that every time O'Malley is in the news recently it's been about cutting hundreds of millions in spending in hopes of keeping the state solvent, it's not so bad, either.

(Sun photo)

Continue reading "O'Malley vs. Ehrlich: The rematch" »

Posted by Andy Green at 12:24 PM | Permalink | Comments (20)
Categories: State House
        

It's a long-held axiom that increasing taxes in an election year is bad politics. But the nascent debate over enacting "combined reporting," a corporate tax law system that supporters say ensures corporations pay their fair share, suggests that it could make for bad policy as well.

Combined reporting is hugely complicated, and it's not clear that it's always a better way to tax the economic activity of corporations. The idea is that companies would have to report their earnings in all states and designate what portion of that comes from Maryland. It's supposed to be a means to prevent companies from hiding profits in states with lower corporate income taxes, or no corporate taxes at all. (Delaware: this means you.) Maryland would hardly be the first state to enact combined reporting, but the experience elsewhere doesn't suggest this system would necessarily be a huge boon. Some companies pay more under the system, but some pay less. It might make Maryland corporate taxes fairer, it would certainly make them more complicated, but it might not be a windfall. The state estimates it could generate $20-$150 million a year, not insubstantial, but hardly enough to fix our budget problems.

Nonetheless, the idea is getting a big push from the American Federation of State, County and Municipal Employees and other liberal groups who say Maryland should enact combined reporting this year before it considers more cuts to services, layoffs or furloughs to employees, or other cost-cutting measures. Supporters say raising this particular tax in an election year would actually be good politics; it would send a strong populist message, they say, for Maryland to make corporations pay their fair share rather than cut services to its citizens.

The problem is "a strong populist message" and "a sober, detailed debate about the implications of a complicated tax law change" generally do not go together. If Maryland does adopt combined reporting, it needs to do so carefully to make sure it creates a system that meets its goals of fairness without unintended consequences. An election year, when legislators are too often interested in looking good for voters, is not the best time for that.

Posted by Andy Green at 9:51 AM | Permalink | Comments (1)
Categories: State House
        

Gov. Martin O'Malley unveiled about $280 million in budget cuts this afternoon that take big bites out of health care and higher education and lots of nibbles at just about everywhere else. But this looks like the appetizer course to a much bigger set of cuts that will be coming sometime before Labor Day. To keep the budget balanced, the administration needs to find about $420 million more, and the governor indicated that the savings are going to have to come from cuts to the state payroll and to aid to local governments.

O'Malley, a former Baltimore mayor, has been loath to pass the state's budget problems on to the counties, but it seems like it comes to that eventually in every recession. There is virtue in the state picking up much of the tab for things like education in that it smooths out some of the big funding disparities between jurisdictions that you see in some states. But it also masks to an extent the true cost of local services. From a citizen's perspective, it doesn't matter much. The money comes out of your pocket one way or another. From a politician's perspective, it matters a great deal. Leaders on the state level see themselves making politically unpopular decisions while those on the county level have experienced less pain (though that is changing as the recession deepens). Bottom line, you-know-what flows downhill.

As far as state workers go, the governor voiced a preference against the "massive layoffs" that other states have seen and hinted that he would prefer another round of furloughs instead. Furloughs are attractive in that they spread the pain and lessen the interruption of public services. The advantage of layoffs is that they provide ongoing cost reductions, which could be important since we don't appear to be dealing with a short-term problem.

And the need for ongoing savings may soon become acute. Only $148 million of the cuts O'Malley is bringing before the Board of Public Works Wednesday represent ongoing savings. The rest are one-time reductions, raids on funds and accounting gimmicks. O'Malley is facing a budget shortfall of $1.5 billion or more in fiscal 2011, and the more he does now to find ongoing savings, the less he'll have to do later.

Posted by Andy Green at 4:12 PM | Permalink | Comments (10)
Categories: State House
        

Laura Smitherman reports news in today's paper that has become all too predictable: Comptroller Peter Franchot is reporting sharp decreases in state revenues, Gov. Martin O'Malley is faced with making about $700 million in spending cuts, and the American Federation of State, County and Municipal Employees is insisting that the governor cut something besides programs that affect their members.

Not to pick on AFSCME; they're just one of the litany of the "cut-something-else" interest groups that surfaces during these times. The threat of tough budget times brings out protests from all corners, including The Sun's editorial page, not to cut this program or that one. But there's always too little of people looking at the state budget and saying, "Here's something we can do without."

So, any suggestions? What should Gov. O'Malley cut from the budget?

(Sun photo)

Posted by Andy Green at 8:50 AM | Permalink | Comments (50)
Categories: State House
        

Jim Smith announced Monday afternoon that he would forgo the comptroller's race in 2010, ending months of speculation about his political future. He said he'll look for ways to serve in the future but that his heart wasn't in a run for that office:

"After much deliberation, I have decided not to run for Comptroller in the 2010 election.  Although this has not been an easy decision, I am confident that I am making the right choice. Having spent many months thinking about the duties of Comptroller in the State of Maryland, I have concluded that it is not a position to which I aspire. I have never pursued any elected office because it was expedient. I always sought the opportunity to serve because I thought I could make a real difference -- as a councilman, a judge, and currently as County Executive. I did not feel that passion when considering a run for Comptroller."

That says something good about the man who has been running Baltimore County for the last seven years. Set aside for the moment the question of whether he would have been a good comptroller or a bad one, whether he would have won or lost against incumbent Peter Franchot, or whether Gov. Martin O'Malley did or didn't want him to run. The simple fact that a politician chose not to run for a higher office that he had no real interest in is, sad as this may be to say, refreshing.

Jim's 2002 race for county executive was the first big election I covered for The Sun. We got to know each other in the early days, when he would pop into our Towson office after going to the gym next door. It was a rare period in his adult life when he was not a county councilman, judge or county executive. Just, for a moment, a private citizen.

That campaign didn't set the world on fire -- it's major legacy was the unfortunate and repeated use of the word "renaissance" as a verb -- but Jim had a certain engaging earnestness about him. He was a Baltimore County guy through and through -- born and raised there, leaving only briefly to go to college, and then coming back to raise a family in Resisterstown. The only chink in his bona fides, according to a story he once told me on the way to a campaign stop, was that in high school, he dumped "a hot little number from Randallstown" in favor of his future wife, Sandy, whom he met while she was cheerleading at a basketball game in Westminster.

He could quite comfortably have spent the rest of his career on the bench, but, he said, he wanted to serve the county more directly. Being county executive, he insisted at the time, was no steppingstone to something else for him. He wanted that job, and that was it.

Over his two terms, as the county continued to run smoothly and he continued to amass political cash and clout, people started whispering into his ear about statewide office. There's no way to know whether the state would have been well or ill served by such a move, but it always disappointed me a little to think that the man I'd met with the seemingly simple purpose had been won over by years of chauffered cars and hangers-on.

There is something to be said for ambition in our elected officials. People looking to move up might be extra aggressive in trying to be innovative in their current jobs. Sometimes people grow into offices they don't inherently have much interest in -- Smith's predecessor Dutch Ruppersberger, for example, has developed a surprising relish for his work as a congressman, despite some ambivalence when he first decided to run for the post. And maybe there's more to Smith's decision than his announcement lets on.

But it's nice to think that something essential about the Jim Smith I met eight years ago remains in the man today. 

(AP Photo)

Posted by Andy Green at 4:57 PM | Permalink | Comments (1)
Categories: State House
        

In principle, the American Federation of State, County and Municipal Employees has an excellent argument for the so-called “fair share” law that went into effect in Maryland this week. It negotiates contracts for tens of thousands of state employees, whether they are members of the union or not. Conducting those negotiations costs money, and it isn’t right that non-members get the benefits without paying their share of the costs.

But the potential side effects of the law are disquieting.

For one thing, employees who belong to other unions that aren’t recognized by the state as having bargaining rights would have to pay their union dues and the service fee. That will almost certainly endanger the existence of these smaller unions.

And for another, the service fees would be a huge financial boon to AFSCME. The fees — which still must be negotiated with the state — will cover more than just the cost of negotiation. Non-members may end up paying as much as members or nearly so to fund outreach to members, educating the public about the work state employees do and other activities they may not wish to support. (Political activities of the union are supported by voluntary contributions to a political action committee, not dues.)

Can this policy be structured in such a way to recognize AFSCME's legitimate desire for all those it helps to shoulder the costs with the rights of non-members or members of other unions? 

Posted by Andy Green at 8:00 AM | Permalink | Comments (2)
Categories: State House
        

State Sens. Jim Brochin and Jamie Raskin have asked Attorney General Doug Gansler to investigate whether the state has an interest in Constellation Energy CEO Mayo Shattuck's compensation package. The senators want to know if it amounts to an unlawful use of assets paid by the customers of BGE, the regulated utility that is a Constellation subsidiary. This follows weeks of drumbeating by Gov. Martin O'Malley about an $87 million payment Shattuck (pictured at right) could get under certain circumstances.

Constellation reacted with predictable outrage, but this might not actually be such a bad thing for the company. Its position is that Shattuck's pay is shouldered entirely by the unregulated side of Constellation's business -- its energy trading and other activities -- and that it's not the state's business. If that is true, it would seem like it would be in the company's interests to have Gansler -- a Montgomery County Democrat who has no dog in the O'Malley-BGE fight -- look into the matter. Even if Gansler comes up with an interpretation the company doesn't agree with, it can take the matter to court and get it resolved once and for all so that the company's critics in the state government can't continue to bludgeon Constellation with it whenever they disagree. Unless, of course, BGE customers are funding Shattuck's paychecks, which would be a different matter entirely.

(Sun photo)

Posted by Andy Green at 10:31 AM | Permalink | Comments (6)
Categories: State House
        

The Maryland Public Service Commission's order Thursday concluding that it has the right to review Electricite de France's proposed purchase of part of Constellation Energy Group's nuclear business looks like nothing more than an attempt by the state to shake down the company for cash. That wouldn't be so bad, except that the state already shook Constellation down 18 months ago with the promise that it wouldn't do so again. But it seems that when it comes to Constellation and BGE, Gov. Martin O'Malley and his appointees on the Public Service Commission don't know when to leave well enough alone.

State law gives the PSC the authority to review any transaction Constellation engages in that would give a new partner "substantial influence" over BGE. In its order, the PSC concludes that the EDF deal would do that, even though EDF is buying slightly less than half of another, unrelated subsidiary, has pledged not to interfere and appears to have no incentive to do so.

The PSC's logic is that EDF could prevent the Constellation nuclear business from paying dividends to the parent company. If the parent company has less cash, it might have less to give to BGE to make investments in the electric grid and, therefore, EDF would have substantial influence over BGE. Apparently butterflies flapping their wings in the Amazon also have substantial influence over tornadoes in China. 

Continue reading "A BGE shakedown?" »

Posted by Andy Green at 2:20 PM | Permalink | Comments (15)
Categories: State House
        

Voting record report cards should generally be taken with at least a shaker-full of salt, but those that rate Maryland's so-called "business climate" require more seasoning than most. Inevitably there's a conflict between those in the business community who believe Maryland needs good schools, roads and other taxpayer-financed infrastructure to achieve economic success and those who do not.

The latest report card from the conservative group Maryland Business for Responsive Government demonstrates once again that being pro-business is in the eye of the beholder. Or, to put it another way, legislators are being asked to be pro-which-business?

In rating state Senate votes in 2009, for instance, MBRG regarded the O'Malley administration's efforts to penalize those who defraud Medicaid as anti-business. Huh? It's anti-business to stand up against fraud? Here's a guess how that conclusion was made - because certain large health care interests opposed the measure. The bill's failure cost all taxpayers (including businesses) millions of dollars.

Here's another peculiar one: In the House rating, lawmakers were determined to be anti-business if they favored penalizing construction and landscaping companies that deliberately misclassify their employees as part-time workers to avoid paying unemployment insurance and workers' compensation.

Yet what happens when such workers are misclassified? Other taxpayers inevitably have to make up the difference in state-supported safety net programs. That includes businesses that don't try to circumvent the law.

Continue reading "Rating business climates" »

Posted by Peter Jensen at 1:09 AM | Permalink | Comments (3)
Categories: State House
        

Richard S. Madaleno Jr., an openly gay state senator from Montgomery County, recently asked Maryland's attorney general to determine whether same-sex marriages performed in other states can be recognized in Maryland.

Despite Maryland's law defining marriage as between a man and a woman, this is not so far-fetched as it may sound. Maryland has often recognized marriages licensed in other states under terms that are not expressly permitted here (common law marriages, for instance).

But why was Gov. Martin O'Malley, a lawyer married to a judge and surrounded by government lawyers, not similarly curious about the law? It isn't as if the thought had never occurred to anyone in the State House. This newspaper's own editorial board urged him to ask for the opinion several weeks ago.

Continue reading "Same-sex marriage: a lack of an opinion" »

Posted by Peter Jensen at 3:17 PM | Permalink | Comments (8)
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Our counterparts at The Wall Street Journal's editorial page took a predictable position on Maryland's income tax policy Tuesday. They bought into the argument that just because fewer people have filed state income tax returns reporting earnings of $1 million or more for 2008 than did at this point for 2007, therefore the rich are leaving Maryland like roaches fleeing the Orkin man.

But as we've observed before, this is ludicrous on numerous levels, the most obvious of which is that like most everyone else, the wealthy have lost money in the recession. And many others who have earned $1 million or more have asked for filing extensions. Apparently, it's not easy to calculate taxes when big losses are involved.

After all, Maryland tax law treats capital gains the same as personal income. So market volatility can have a profound impact on earnings -- as records show it has during Maryland's previous economic downturns.

Yet, it's more convenient and perhaps even comforting for the Journal's wealthy readers to believe they are getting soaked by a state that, doggone it, thinks that children ought to have access to decent health care and quality public education.

Continue reading "WSJ bravely stands up for fleeing millionaires" »

Posted by Peter Jensen at 4:05 PM | Permalink | Comments (23)
Categories: State House
        

California residents are about to discover the one thing that may be worse than a tax increase during an economic recession -- state budget cuts that eliminate essential services to vulnerable families.

To keep the Golden State solvent, Gov. Arnold Schwarzenegger will need to trim nearly $27 billion thanks, in part, to voters' recent rejection of temporary tax increases and borrowing measures on the ballot. He's already warned that it's going to require taking billions of dollars from public schools and colleges and draconian cuts to Medicaid and other programs that help the poor.

A recent study by the non-profit Center on Budget Policies and Priorities found that most states have either raised taxes or are contemplating doing so this year. When push comes to shove, states are discovering that the only rational way to deal with a severe recession is to take a balanced approach that involves cutting spending, increasing revenue and accepting federal stimulus aid.

(Photo: Associated Press)

Continue reading "When budgets cuts are even worse than tax hikes" »

Posted by Peter Jensen at 12:00 PM | Permalink | Comments (3)
Categories: State House
        

Gov. Martin O'Malley signed some pretty controversial bills Tuesday, but probably none will draw as much attention as his approval of a measure allowing speed cameras near schools and highway construction zones around the state. A referendum drive is already under way to repeal the legislation, and according to Laura Smitherman's article, organizers have about a fifth of the signatures they need.

I certainly have no problem with bringing this one to the ballot. So far, most of the discussion on this legislation has been dominated by the people who see speed cameras as Big Brotherish intrusion, with relatively little comment from, say, parents who might not mind the idea of slowing people down near schools. I bet there are a lot more of them out there than you'd guess from reading the chat boards on this one.

Opponents are right to wonder if the government is going to use these things as a money grab, or if the vendors who run them would have some kind of financial incentive to issue more tickets than they should. We should keep an eye on that. But let's not forget that the law allows you to go 12 miles per hour over the speed limit before it triggers a ticket. That's 37 miles per hour in a typical school zone. If you can't keep it below that, you probably deserve the $40 fine.

(Sun photo: Elizabeth Malby)

Posted by Andy Green at 11:11 AM | Permalink | Comments (12)
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The news that tax collections from millionaires are fading in Maryland is sure to revive the argument from conservatives that the state is driving people away with its high tax rates. It's an argument made in Laura Smitherman's story Thursday by a tax analyst from the Chamber of Commerce -- and one I expect to get a press release about from the state GOP any minute now. But I find it hard to believe.

Let's break this down: In 2008, in an effort to repeal the hugely unpopular computer services tax, the General Assembly and Gov. Martin O'Malley approved a new, temporary millionaires' tax bracket. Marginal income over $1 million would, for a three-year period, be taxed at 6.25 percent instead of 5.5 percent. We're talking net taxable income over $1 million here, so that's money you're making IN EXCESS OF $1 million after all tax deductions, etc.

Let's assume you're making $2 million a year in net taxable income. That means you're paying at the new tax rate on a whopping $1 million. Your increased income tax burden because of the millionaires tax is $7,500.

Sounds like a lot of money, right? Well, you've got to bear in mind just how much money $2 million is. According to the Census Bureau, the typical Maryland household earns $57,019 a year (and that's gross, not net). We all know that people making more than $2 million have a lot more disposable income, generally, than average taxpayers, but for the sake of argument, let's pretend that every dollar is just as important to a rich person as it is to an average person. Making a rough comparison, $7,500 for someone who earns $2 million a year is equivalent to $213.82 for the typical Maryland household, or somewhere around $4 a week. Is that unwelcome in this economy? You bet. Worth packing up and moving to Pennsylvania for? Probably not.

Continue reading "Are millionaires fleeing the state?" »

Posted by Andy Green at 11:25 AM | Permalink | Comments (4)
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The Baltimore Sun's Mary Gail Hare reported Sunday on what may be the worst-kept secret in Maryland politics: Baltimore County Executive James T. Smith Jr. may be preparing to run against Comptroller Peter Franchot in the 2010 Democratic primary. (These rumors have been brewing for at least two years; at a Smith fundraiser at the Maryland Association of Counties conference in August 2007, the county executive introduced every politician in the room except one -- Peter Franchot -- much to the amusement of those in attendance. "Don't read anything into that," Smith said when he corrected the oversight.)

Smith's got the money (and the ability to raise lots more) and a solid record of experience. But what will be critical is Smith's explanation for why he wants to get in the race. Being term-limited and feeling like you need to run for something else isn't a great reason (although it worked for Smith's predecessor, Dutch Ruppersberger, back in 2002). And pledging to work more closely in concert with Martin O'Malley -- Smith is a major ally of the governor -- wouldn't be a great reason either.

Franchot has certainly been a pain in O'Malley's neck from time to time -- his opposition to slot machine gambling is only the beginning -- but Maryland voters have generally liked having a comptroller who displays independence. (See: Schaefer, William Donald.) Maryland's constitution separates the chief fiscal officer's duties from those of the governor for a reason -- it provides an important check on what is otherwise an extremely powerful executive.

So if Mr. Smith does try to go to Annapolis, he's going to have to convince voters that Franchot has been doing a bad job, or that he has a vision for how to do a better one. If he's got a solid reason for why he wants to be comptroller, it could be a good race, indeed.

Posted by Andy Green at 9:00 AM | Permalink | Comments (1)
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Del. Anthony J. O'Donnell, the minority leader from Southern Maryland, stopped by The Sun's editorial board yesterday for an hour-long conversation. Needless to say, there are plenty of issues on which he and the board have, historically, disagreed, but much of the talk was focused on one area in which we are on the same page: The need for a robust debate in the state over politics and policy. (In fact, we just ran an editorial earlier this week cheering the entry of Republican Mike Pappas in the gubernatorial race and encouraging others to follow suit for that very reason.)

Despite the loss of the governor's mansion in 2006, Mr. O'Donnell is fairly sanguine about the overall trajectory of the Maryland Republican Party. He chalks up Ehrlich's loss to a national Democratic wave (I think this is only partly true, but it certainly had an impact) and notes that even though Republicans lost some seats in the legislature, their numbers there are still fairly high by historical standards.

I asked him which he thinks would be better for the party: Taking back the governor's mansion in 2010 or picking up legislative seats, county executive slots, etc. He said winning the governor's race would be important because Maryland has such a strong executive. But he said picking up seats in the legislature would be just about as good. Another 4-8 seats in the Senate and 8-12 in the House would still leave the party in the distinct minority in both chambers but could result in a significant shift in the makeup of the standing committees, which is where most of the real work gets done, he said.

"Just a small shift in the numbers on the committees could make a big difference in terms of policy," he said.

Sounds good, but in practice, it might not work out that way. Most likely, any pick-up in seats for Republicans would come at the expense of Democrats representing conservative districts. That mitigates the impact of GOP numbers on many issues, and sometimes in the past has backfired. (Take the defeat of Democrat Cas Taylor by Republican LeRoy Myers, which resulted in a more liberal, anti-slots speaker of the House. Or the defeat of Democrat Walter Baker by Republican E.J. Pipkin in the Senate. Now instead of Baker, an Eastern Shore conservative, the Judicial Proceedings Committee is chaired by Brian Frosh, a Montgomery County liberal.)

It strikes me that rather than seeking tactical advantages, what the Republican Party could use is a clear, tailored message on a few key issues that resonate in suburban and urban areas. The party faces a difficult task, to be sure, because the rural areas it increasingly represents tend to be far more conservative on guns, abortion and other issues than the state's big population centers, and the voters in those districts want to see the party aggressively pursue them. But to make progress, the party is probably going to need standard-bearers who represent a viewpoint closer to the political center.

It's no coincidence that Bob Ehrlich, a pro-choice Republican from the Baltimore suburbs, was the party's first governor in a generation. He represented an alternative to the Democrats but didn't come off as far right, especially in his 2002 race. The GOP's problem was that it didn't have enough Ehrlich-types hanging out in county councils or legislative seats to back him up or step in when he lost.

Posted by Andy Green at 9:31 AM | Permalink | Comments (0)
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At this point in Maryland's snakebitten slots saga, it should come as no surprise that the zoning legislation necessary to authorize what would likely be the state's premier casino at Arundel Mills Mall is stalled before the Anne Arundel County Council.

Executive John Leopold's proposal to allow slots has been languishing for months with no legislative action, The Baltimore Sun's Tyeesha Dixon reports. If councilmen don't do something soon, the bill will expire, and county officials will have to start over.

It was all too predictable that something like this would happen. Slots skeptics in the legislature insisted that local zoning control apply to any slots casinos, effectively giving individual jurisdictions veto power over what has emerged as a key to the state's fiscal future. Since nobody has ever lined up to ask for a casino in their backyard, the opposition building among neighbors of Arundel Mills was a foregone conclusion. They're worried about traffic, crime, congestion and property values, despite assurances from developer Cordish Cos. that slots will improve all those things, make their teeth whiter and the sun brighter.

Cordish's promises sound too good to be true, but the casino probably wouldn't be quite so bad as neighbors fear, either. Some 14 million people already visit Arundel Mills every year. We should be so lucky if enough people go to a slots parlor there to make a noticeable difference.

Councilmen should drive a hard bargain in exchange for their zoning vote. They should put Cordish on the hook for road improvements, security, community support programs, scholarships for the kids -- heck, whatever they can get. The slots bidders in Baltimore are ponying up millions a year for property tax relief. Cordish would probably be willing to cough up some cash, too.

Posted by Andy Green at 9:15 AM | Permalink | Comments (3)
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The recession isn't letting up. The country is still at war. Taxpayers are subsidizing Chrysler again. And the planet is getting warmer by the minute.

Wouldn't this be a wonderful time to join the Wine of the Month Club or buy a rare bottle of cabernet online? Certainly, a nice glass of pinot noir from some little-known Sonoma winery might actually make you feel better about life right about now. But alas, you live in Maryland. Tough luck.

Last month, the state legislature once again finished a 90-day session without addressing Maryland's antiquated alcohol laws that prevent direct shipment of wine to consumers. No surprise there. The wholesale liquor lobby keeps them fat and happy with political contributions. That's why lawmakers are willing to raise the sales tax and even the income tax in recent years but won't touch state taxes on alcohol that are now among the lowest in the land.

Continue reading "One more whine about wine shipping" »

Posted by Peter Jensen at 5:59 AM | Permalink | Comments (3)
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For several years now, Baltimore County police have been trying to address a sharp rise in the theft of catalytic converters and other scrap metals, from copper pipes to high school bleachers. The remedy? Make sure scrap dealers properly identify the people who sell to them and make that information available to police. The House of Delegates overwhelmingly approved legislation to do that. The Senate did, too, but somehow when it came time to finalize the deal -- to adopt a conference committee compromise -- the House just didn't find the time before the 90-day legislative session ended Monday night.

Hmmm, wonder how that bill got scrapped. Was it lost in the speaker's office? Misplaced by a clerk?

Posted by Peter Jensen at 3:39 PM | Permalink | Comments (0)
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If you are a Maryland taxpayer, you've no doubt seen and perhaps even chosen the option of donating money to something called the "Fair Campaign Financing Fund" on your Form 502 income tax return. (Right there between giving money to protected endangered species or cure cancer.)

The money is set aside so that future candidates for governor and lieutenant governor have the option of public financing for their run for statewide office. So it's safe to assume that the people donated money for that purpose, with no expectation that it would be used for something entirely different.

In balancing next year's state budget, members of the Maryland General Assembly performed what might be called an act of creative accounting -- or, under different circumstances, outright theft. They transferred up to $2 million from that account to help pay for new voting machines.

Continue reading "The $2 million theft" »

Posted by Peter Jensen at 3:27 PM | Permalink | Comments (0)
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As an historical artifact, Maryland's state song is an invaluable insight into the mindset of Maryland in 1861. We were a state awash in Southern sympathizers and we looked none too kindly upon Abraham Lincoln and the Union Army.

It's not just a few anti-Lincoln references here or there in the nine-stanza poem set to "O, Tannenbaum," the song is a rallying cry to defend against "Northern scum." Those lyrics may be offensive by modern sensibilities (it's hard not to be a little taken aback when one of the nation's greatest presidents is referred to as a despot right off the bat), but they are part of our heritage.

That said, it's a shame there's no state song that school children can proudly sing at school assemblies or other important events. Other states have them. No Kentucky Derby is complete without "My Old Kentucky Home" (which, ironically, has abolitionist roots). "Georgia On My Mind" is a good song for any occasion.

Continue reading "Maryland, My Maryland c. 2009" »

Posted by Peter Jensen at 6:01 AM | Permalink | Comments (7)
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Continue reading "A tale of two sports venues" »

Posted by Peter Jensen at 11:38 AM | Permalink | Comments (7)
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Continue reading "Lights, camera, inaction" »

Posted by Peter Jensen at 6:00 AM | Permalink | Comments (1)
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The Diamondback, the independent, student-run newspaper at the University of Maryland, College Park, has weighed in on the porn film controversy at the flagship campus. State lawmakers would do well to consider the views of their younger constituents who attend the university. It might give them some needed perspective on this issue.

Here is an excerpt of the Diamondback's fine editorial on the university's decision to cancel a showing of Pirates II: Stagnetti's Revenge after legislators balked: "We simply don't believe state legislators would shut down the most productive source of education, a gem of the state, because Hoff showed some bouncing breasts. But potentially worse, administrators have declared in unequivocal terms they don't need student input before regulating the content supported by this university. It's easy to devalue the precedent administrators have set in the context of a bunch of hormonal college students in a tizzy to see some skin. But what happens when federal funding for stem-cell research comes up? What happens when administrators decide whether a speaker on Israel or Palestine is engaging in hate speech? So grab your swords and muskets, mateys, because a decision this egregious can't be quietly tolerated. It's time to rock the boat."

Posted by Ann Lolordo at 1:29 PM | Permalink | Comments (0)
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Mary Avara must be saying, "I told you so." When the state disbanded the Maryland State Board of Censors in 1981, Mrs. Avara, a grandmother who chaired the panel, warned that smut of all kinds would be shown in the state. A decision by some University of Maryland students to defy a school ban on showing the XXX-rated Pirates II: Stagnetti's Revenge, on campus would surely qualify for Mrs. Avara's rating of RT--real trash. 

The university cancelled the original Saturday night showing of the porn film after state lawmakers threatened to pull UM funding. A group of students then said they would host a screening of the film tonight in a campus room to protest the university's interference. The students planned to have faculty discuss the issue of free speech.

So who's going to have the last word in this film fight?

State Sen. Andy Harris, the Baltimore County lawmaker who threatened to cut the school's funding, isn't the type to back off. THe U.S. Supreme Court in 1965 issued a decision in a case involving a Maryland theater owner who challenged the film censor's right to edit or cut scenes from movies. The court's decision undercut the authority of state film censor boards (Maryland's was the last to go) but it didn't directly deal with the free speech issue.

At least one legal expert has questioned whether the UM showing of the porn film is protected as free speech under the First Amendment. The initial screening was to be accompanied by a talk on safe sex practices from a Planned Parenthood representative, a nod toward presenting the film in an educational context. 

But what needs fuller exposition here is the free speech issue. Did the university consider this before it caved to pressure from state lawmakers? If so, what did its lawyers say? This film has been shown on other university campuses and the porn film Deep Throat was sreened at the College Park campus four years ago.

What does the Maryland Attorney General's office have to say about the competing issues here? A reasoned opinion would help settle the matter before showtime.

Posted by Ann Lolordo at 9:25 AM | Permalink | Comments (6)
Categories: State House
        

Critics of a state Senate proposal to install speed cameras near schools across Maryland argue the devices are just a cash cow for local governments and won't deter violators. Sen. E.J. Pipkin, a Republican from Southern Maryland, says the cameras are less effective at "behavior modification" than the shame of getting pulled over by the cops.

Not necessarily. We can attest from experience along the ruler-straight strip of Connecticut Avenue in Chevy Chase, where cameras already are installed to enforce a 30 mph speed limit, that drivers are indeed modifying their behavior.

Before the cameras were installed, cars tended to zip through the area at whatever speed the traffic would bear -- often up to 60 mph. Soon after the devices started snapping speeders' license plates, however, traffic slowed to what seemed like a relative crawl. I wondered why, till one night I saw the bright lights of the camera flashes picking off violators in the opposite lane. Everybody on my side of the road suddenly decided it was a good idea to slow down.

Getting a few $40 speeding tickets in the mail eventually will persuade even the most incorrigible lead-foots to change their habits. People who drive the Chevy Chase route regularly have become mighty impressed by those cameras; a lot fewer now think they can get away with speeding just because there's no patrol car in sight. The cameras are always watching, and they will get you if you're more than 12 mph over the limit. The more drivers start seeing the light on that score, the more cheerfully they'll start obeying the law.

Posted by Glenn McNatt at 2:24 PM | Permalink | Comments (2)
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Continue reading "Right on, Tony" »

Posted by Peter Jensen at 12:20 PM | Permalink | Comments (0)
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First things first: Is there a person in the world who reads all the fine print in a credit card agreement? Not me, and probably not many of you. But embedded deep in those agreements is usually a clause that allows credit card companies to raise interest rates retroactively. And it doesn't matter whether the consumer has kept up with payments and met all his obligations to the credit card company. Such a move can be triggered merely by making a late payment to a different lender.

Contract language or no, that doesn't pass the smell test. (Imagine if your mortgage company did the same thing if you were late on a credit card payment?) And with consumer anger at banks and the financial services industry running at an all-time high, small wonder that a bill to ban this practice has won widespread approval in Annapolis. No matter that federal legislation will accomplish the same thing next year; state lawmakers are moving to protect consumers by this summer.

Continue reading "The credit card interest rate scam" »

Posted by Peter Jensen at 5:16 PM | Permalink | Comments (1)
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The Washington Post's story Saturday about the abuse of Maryland's driver's license process by illegal immigrants was disturbing. The examples of how non-residents game the system make the case for tougher standards and safeguards in the licensure process and greater enforcement. Maryland shouldn't be the go-to state for license brokers out to make a buck and others willing to perpetrate fraud. 

In the past, the editorial board has been reluctant to rubber-stamp the federal Real ID program because we worried about its impact on the state's growing immigrant community and the safety concerns posed by an increase in non-licensed drivers on the road. But the evidence of misuse presented in the Post story can't be ignored. The two-tiered system proposed by immigration advocates is worth reviewing in the face of this pattern of fraud and abuse.

Posted by Ann Lolordo at 12:42 AM | Permalink | Comments (3)
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While the rest of us have to qualify for an income tax refund, the House of Delegates found how to get $60 million in income taxes with the stroke of a pen: Take it from local government. This may have been the most surprising choice in the $13.9 billion general fund budget the House approved Thursday. To say county officials are a bit peeved about this would be an understatement.

Continue reading "Income tax refund" »

Posted by Peter Jensen at 2:08 PM | Permalink | Comments (1)
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The Maryland Legal Services Corporation, the nonprofit organization that helps pay for lawyers for poor people, has watched a key source of funding decline precipitously because of the national economic crisis. And yet, it had no intention of lobbying state lawmakers for more money because, well, everybody is hurting. Then, a House legislative committee cut $500,000 from a budget that was intended for it. And today, MLSC's executive directive, Susan Erlichman, is pacing the halls of Annapolis, trying to get the money restored. (See letter, below)

These are desperate times for the organization, the primary funder of Legal Aid of Maryland, whose lawyers represent the poor throughout the state. The Legal Services Corp. is funded mainly by interest earned on legal trust accounts held in banks. But that interest rate has fallen lower than low -- so low that the organization hopes it receives $2 million (last year, the figure was $6.8 million). That's a serious hit in a year when the poor need a lawyer more than ever by their side in court.

Foreclosures haven't stopped, unemployment is climbing, and money woes put everyone in a family on edge. Officials with Maryland Legal Services Corp. say there's been a misunderstanding. Information in the state budget may have led lawmakers to think the corporation can draw on a $15 million account in the state judiciary's budget. But that line item is only an estimate of what could potentially accrue in that account, and MLSC can only receive $500,000 under the law anyway.

That does sound like a big misunderstanding -- on top of a pitiful economy. Unless it's cleared up, Legal Aid of Maryland and other MLSC-funded programs will be in jeopardy, and poor people shouldn't be denied a lawyer in these hellish economic times simply because they can't afford one.

When was the last time you had to file for unemployment?

Continue reading "Legal services for poor" »

Posted by Larry Williams at 10:22 AM | Permalink | Comments (0)
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Continue reading "Campaign finance reform" »

Posted by Peter Jensen at 3:23 PM | Permalink | Comments (0)
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Local government is loathe to give up even the tiniest sliver of power when it comes to land planning. Small wonder, since developers are the primary source of campaign funds for county executives. And the execs offer a pretty good argument to back up their claim: Do you want the state to decide where the next Wal-Mart should go? Or a high-rise apartment building? Or public housing?

Trouble is, nobody's asking them to surrender their responsibility for planning and zoning. What's needed is for them to simply stick to their guns. If local comprehensive plans call for certain areas to be developed and others not, what's wrong with county executives, councils and municipal leaders just saying no to proposals that don't meet the criteria?

Nothing, frankly. But the Maryland Association of Counties is once again crusading against efforts to change the state's Smart Growth law in a manner that would penalize localities that allow development outside priority funding areas or PFAs. The proposal wouldn't ban development outside PFAs but counties that do a better job of steering development into PFAs would be rewarded with easier access to state funding for roads and other infrastructure.

Continue reading "Local government knows best?" »

Posted by Peter Jensen at 1:34 PM | Permalink | Comments (0)
Categories: State House