Now that the shoe is on the other foot for the first time in eight years, thousands were interested in how newly-inaugurated Governor Larry Hogan assessed the state of our state. And it didn’t take long for him to assess that:
But while our assets are many, and our people are strong and hopeful, their state is simply not as strong as it could be – or as it should be.
Yet in reading through the speech, I didn’t see it as a negative in any way. Instead, Hogan proposed a number of solutions which, instead of spending money or growing government, generally worked in the opposite direction. Breaking the laundry list into eleven parts, it’s easy to summarize the Hogan plan for year one:
- Analyzing and enacting portions of the upcoming Augustine Commission report on business competitiveness. The idea here is to make Maryland more business-friendly and hopefully wean the state’s economy off a long-term dependence on federal government jobs.
- Restructure government to be more efficient and effective, using the new faces placed at many of the Cabinet-level departments.
- Legislation repealing the “rain tax.” This may get some serious opposition from the environmentalist groups who believe this is a fair way to pay for Bay restoration efforts, even though the fees were set by county and only affected ten of 24 county-level jurisdictions.
- Legislation proposed to exempt military, police, fire, and other first responder pensions from state income taxes. Eventually Hogan would like this to cover all retirement income. It’s an effort to improve Maryland’s dismal standing and reputation as a place not to retire.
- Legislation to exempt the first $10,000 of personal property from taxation, a move Hogan claims would eliminate the tax for half of Maryland businesses.
- Legislation to repeal the automatic gasoline tax increases baked into the Transportation Infrastructure Investment Act of 2013.
- Restoring the local share of Highway User Revenues, a sore spot among the state’s rural counties in particular.
- On education, strengthening the charter school laws. More controversial will be the oft-tried BOAST tax credit, which gives a tax credit to those who contribute to parochial or private schools. Hogan noted previous iterations have passed the Senate only to fail in the House.
- Hogan has already shelved the Phosphorus Management Tool, and called for farmers and environmentalists to work on a better, more equitable solution. He also promised to address the “long-ignored impact of upstream polluters,” including the problems at Conowingo Dam.
- An executive order to deal with the heroin epidemic. Lieutenant Governor Boyd Rutherford has been tasked with this issue.
- Reinstating the Fair Campaign Financing Act fund by bringing back the checkoff on the tax returns, and also establishing a commission to examine the state’s redistricting process via executive order. If I have the time, I’d love to serve on that one because we really do need to reform the system.
Certainly it’s not the strongly conservative agenda some may prefer, but I would consider it a good first step. Much of the reform will have to go through the General Assembly, and perhaps the strategy is that of picking off just enough Democrats on various issues to build an ever-shifting coalition with the Republicans. The fifty Republicans in the House and 14 in the Senate would be joined by one group of Democrats who consider education reform a must, but may not agree with Hogan’s approach to cleaning up the Bay. Yet some Democrats may like that idea, but won’t budge on changing the gas tax – and so on and so forth. Just as long as Larry gets 71 votes in the House and 24 in the Senate, the means do not matter.
Because of the nature of how our state’s political process, the honeymoon for Hogan was barely existent. He had to have a budget mere hours after taking office, and some legislation he probably wouldn’t support was already being discussed in the General Assembly. Obviously Larry was working in a shadow government of sorts as he awaited inauguration, but once he took the reins that horse quickly accelerated to full gallop.
So while it’s not necessarily less government, at least Larry is working on making things more efficient and streamlined. Hopefully we can get it to such a level that it wouldn’t be missed when the reductions occur. That’s the next logical step.
In the quest to get America back to making things, it was good news to find that manufacturers added 17,000 jobs in December. That brought the 2014 growth in that sector to 186,000, continuing the steady growth in that sector since the job market hit bottom there in 2009-10. When you consider that 2012 predictions saw the manufacturing sector losing jobs through this decade, having a very positive number nearly halfway through is a good sign.
Naturally Barack Obama tried to take some credit for this during a speech at a Ford plant near Detroit last week. As I noted in a piece I wrote for the Patriot Post, it’s ironic that the plant was idled due to slow sales of hybrids and small cars built there, but the auto industry has played a part in the resurgence of manufacturing jobs in America. This is particularly true in the construction and expansion of “transplant” auto plants in the South by a number of foreign automakers.
But there has been criticism of Obama from his political peers. As a carryover from my American Certified days I often quote Scott Paul, the president of the Alliance for American Manufacturing, because his organization is strongly influenced by Big Labor and presumably supported Obama in both his elections. Yet Paul is none too happy with Obama’s progress:
Manufacturing job growth slowed to 17,000 in December, which portends some of the challenges an overly strong dollar, weak global demand, and high goods trade deficits may bring in 2015. While President Obama is touting factory job gains and our Congressional leaders are looking for ways to rebuild the middle class, what’s missing for manufacturing is good policy.
Congress and the president need to hold China and Japan accountable for currency manipulation and mercantilism, and invest in our infrastructure. New innovation institutes are a good thing, but their presence alone won’t bring manufacturing back. And as the president enters the final half of his second term, he’s falling way behind his goal to create one million new manufacturing jobs.
The innovation institutes Paul refers to are public-private partnerships being created around the country in various fields, in the most recent case advanced composites. But Obama lags behind on his promised 1 million new manufacturing jobs for this term as it nears the halfway mark as he’s created just 283,000. It’s great if you’re one of those newly employed workers, but his policies are leaving a lot of chips on the table. In fact, National Association of Manufacturers economist Chad Moutray frets that:
…manufacturers still face a number of challenges, ranging from slowing global growth to a still-cautious consumer to the prospect of increased interest rates. With the start of the 114th Congress, manufacturers are optimistic that there will be positive developments on various critical pro-growth measures, including comprehensive tax reform, trade promotion authority and a long-term reauthorization of the Export-Import Bank, and focusing on important infrastructure priorities like building the Keystone XL pipeline and addressing the solvency of the Highway Trust Fund.
While manufacturers would like to see these measures, attaining some of them may be tough sledding in a conservative Congress. There are a number of representatives and conservative groups who don’t want to give the President fast track trade authority, wish to see the Export-Import Bank mothballed out of existence, and will not consider increasing the federal gasoline tax – an action for which Moutray uses the euphemism “addressing the solvency of the Highway Trust Fund.” These actions may benefit the large manufacturers but won’t help the bread and butter industries solely serving the domestic market like the 24-employee machining shop or the plastics plant that employs 80.
Turning to the state level, our local manufacturing (so to speak) of poultry has a big week coming up. On Wednesday morning, the final deadline to submit new regulations to the Maryland Register for the January 23 printing will pass. You may recall that the December 1, 2014 Maryland Register featured the new Phosphorus Management Tool regulations as proposed (page 1432 overall, page 18 on the PDF file.) The new regulations were not in the January 9 edition, so January 23 may be the last chance to get these published under the O’Malley administration due to the deadline being set in MOM’s waning days.
Yet I’m hearing the rumors that a legislative bill is in the works, to be introduced in the coming days by liberal Democrats from across the bridge. Doing this legislatively would perhaps buy a few months for local farmers because such a bill would probably take effect in the first of October if not for the almost certain veto from Governor Hogan. If Democrats hold together, though, they would have enough votes to override the veto in January 2016, at which time the bill would belatedly take effect. Still, it will be difficult to stop such a bill given the lack of Republicans and common-sense Democrats in the General Assembly. To sustain a Hogan veto would take 57 House members and 19 Senators, necessitating seven Democrats in the House and five in the Senate to join all the Republicans.
We haven’t received the data yet to know whether the installation of Bob Culver as County Executive was enough to break an 11-month job losing streak year-over-year here in Wicomico County, but his task would be that much tougher with these regulations put in place.
Fortunately, we are about five months (and one election) away from the “90 days of terror” which comprises a regular session of the Maryland General Assembly. We have no idea yet just who will be representing us in Annapolis, but there is one agenda item a familiar group is out to stop in its tracks.
As Bob Willick of Maryland Liberty PAC puts it:
Maryland Liberty PAC is ramping up efforts to drive a stake in the heart of the proposed VMT tax before it gains any more traction.
Their aim is to pass a bill prohibiting the practice, similar to one which was introduced last year but went nowhere. In that effort, they have compiled a half-page flyer and video describing their reasons for concern.
Aside from blaming a few current and former legislators for their votes on the Greenhouse Gas Reduction Act of 2009 – indeed, a poor vote but just one – the video does a nice job of illustrating what the bureaucrats of the state have wrought and why it should be stopped.
But let’s leave aside the peak-hour tolls and tracking just for a moment and look at the impact a simple VMT might have.
Let’s say you work here in Salisbury but choose to live in a rural part of Wicomico County, such as around Tyaskin or Powellville. Every day you may drive 20 to 30 miles round trip to work, plus there are those 15 to 20 mile round trips for grocery shopping, taking the kids for extracurricular activities, and the like. It would be easy to put 20,000 to 25,000 miles annually on your car and if a VMT is set for every mile above some artificial limit such as 10,000 miles it could run into several hundred dollars a year, almost regardless of what kind of car you own. (Chances are certain models would be exempted from a VMT, regardless of how useful they are to one’s needs.)
The VMT became seriously discussed when the effects of the fuel economy standards adopted by the federal government in the wake of the 1970s oil embargoes became painfully obvious. As cars became more efficient, they used less gasoline so a per-gallon tax became less and less lucrative. If you drive 20,000 miles a year in a car that gets 40 miles to the gallon, you’re only using 500 gallons of gas a year as opposed to a 20 MPG car that takes in 1,000 gallons. At a federal gasoline tax of 18.4 cents per gallon, that’s a “cost” to Uncle Sam of $92 a year for being a “good citizen” and purchasing a more efficient car. As they often say, “no good deed goes unpunished,” so with the advent of GPS tracking systems it became more possible to accurately gauge a car’s true mileage and perhaps make up all of that $92 or even more.
As I see it, though, the VMT tax is just a small part of a larger drive to decouple people from their cars. Maryland is doing little to enhance the traffic situation in parts of the state insofar as highway work is concerned. Sure, they may replace the occasional bridge or repave a perfectly good highway, but the bulk of their transportation money and effort is going to be concentrated on two boondoggles called the Red Line and Purple Line. Before that, it was the ICC toll road, which should serve as a signal for what’s to come: variable tolls based on time of day, collected by electronic means with an EZPass or – for a “service fee” – a bill sent to the car’s registered owner. I predict this same “makeover” will be on the Bay Bridge within the next decade, with sky-high tolls at rush hour and on weekends.
Obviously this process of enhancing specific, politically correct traffic is well underway – witness the HOT lanes in urban areas or proposed “transitways” for busses only. Maybe that’s great for urban dwellers, but that doesn’t help people trying to get into Ocean City or through Cambridge or Easton at the height of tourist season. Forget the logic of building another Bay Bridge connecting southern Maryland and Dorchester County to save motorists coming from the Washington area time and hassle.
There’s no question we need to invest money in our transportation infrastructure. The problem with Maryland is that it seeks to create demand where none exists and ignores logical extensions of the existing overburdened system in the name of addressing a “global warming” problem we couldn’t change if we tried.
The idea of the VMT should be the first thing scrapped, but let’s not stop there. It’s time to give up on the folly of reducing our greenhouse gas output because that equates to reducing our standard of living as well as our liberty.
By the way, since I’m on the subject of boondoggles like the Red Line, Purple Line, and VMT, I’ve been meaning to work this editorial on ethanol by my Patriot Post cohort Mark Alexander in for a few days. Here’s a good chance to read it.
I wasn’t sure just what I was going to write on tonight, but thanks to Charles Lollar I have some blog fodder. It’s the kind of thing that happens when the race establishes a front-runner and those who aren’t king of the mountain try and climb up the hill.
Here’s what Charles Lollar had to say regarding Larry Hogan’s comments, quoted in the Washington Post, about his plan for ”prudent” tax cuts:
All the Democrat candidates agree with Larry on this, that we should be “timid” in cutting taxes and putting government on a diet. Lt. Governor Anthony Brown has said the state “can’t afford” even a modest reduction in the corporate tax.
Ken and I believe on the contrary that the time is over for Republicans to advocate tinkering around the edges of our bloated state budget, our confiscatory tax policies, and our corrupt and inefficient state government.
It is time for bold reforms that go to the core of our problems here in Maryland. That is why Ken and I turned to Dr. Art Laffer, who helped turn around our national economy in the 1980s, to vet our plan to eliminate the state income tax.
We have looked at the numbers, and we know we can achieve this step by step over the next five years, without putting at risk the services Maryland citizens expect their state government to provide.
Government is overhead on the economy. When you tax income, you reduce economic activity. Our objective is to restore economic vitality to Maryland, so families and small businesses will want to come here, invest, and grow.
Lollar and Timmerman are also vowing to eliminate the “rain tax,” the death tax, and the latest increases in the gasoline tax. So let’s look at what is at stake.
It’s difficult to quantify what chucking the “rain tax” would actually save because it does not affect all Maryland citizens equally. Sitting in Wicomico County, I pay no “rain tax” because our county hasn’t been forced to adopt one. Annual rates for counties which were mandated to adopt the fee range from one penny to $170.84, depending on location. Of course, we could go into why we are forced to come up with this when other states in the Chesapeake Bay watershed successfully fought the mandate, but that’s for another time.
As far as eliminating the “death tax” goes, according to the fiscal note for this year’s House Bill 739, which set in motion a four-year process to recouple Maryland’s estate and inheritance taxes with federal law, these two taxes combine to create approximately $200 million a year in revenue for the state – a significant amount, but barely 1/2% of the state’s FY2015 budget. In short, we could easily eliminate this as a rounding error.
The gasoline tax, however, is another matter. By the end of Lollar’s first term, the increased tax is expected to bring $685 million in annual revenue, not counting the roughly $700-800 million the existing tax has taken in annually over the last decade. The intent of increasing the tax was to build light rail in Baltimore and metro Washington – note that by FY2019, O’Malley’s budget projected the Maryland Transit Authority would be allocated nearly as much as the State Highway Administration receives (page 33 here). Currently the MTA gets about 56 cents for every dollar that goes to SHA; by FY2019 it would be 92 cents. Just keeping the MTA at its current 56 cent rate to SHA for FY2019 would save about $405.5 million; reducing them to the 25 cents per dollar MTA/SHA rate exhibited in the FY2007 budget (Bob Ehrlich’s last, see page 19) would save $752.7 million. Guess what? There’s your gas tax increase.
In looking at the two example budgets, which happen to be the final ones presented by the respective governors, it’s remarkable that income tax has remained a fairly constant portion of the revenue. Its share was 23% of Bob Ehrlich’s $29.6 billion FY2007 budget and 22% of Martin O’Malley’s $39.3 billion FY2015 proposal. (In terms of real money, though, the income tax increase is $1.999 billion, from $6.552 billion to $8.551 billion.) Over time, we have to figure out what to cut and how to grow the economy to backfill $8.551 billion in revenues if the state income tax goes away.
But let’s assume we can hold the budget where it is, rather than grow it at a 5% annual rate as Martin O’Malley has been doing for the last few years – a trend we could easily assume Anthony Brown would continue. Rather than looking at a $47.8 billion FY2019 budget, $8.5 billion higher than today’s, we would be in a position where other revenue sources could indeed grow to obviate the need for an income tax. Even as people prosper and have more income, the state would get a cut from increased sales tax revenue and perhaps even additional property taxes as housing becomes more valuable in a growing, thriving state.
Yet all of this is academic to a degree. Even if Republicans split 50-50 on all the contested races this year in the Maryland General Assembly, they would remain the minority by 91-50 in the House of Delegates and 29-18 in the Senate. Most of the Republicans who won would be replacing the centrists of the Democratic delegation, so those remaining Democrats would be farther left than ever. We would need Reaganesque leadership to shepherd tax cuts through that body, particularly after those aggrieved Democratic constituencies begin taking a haircut on the budget. (If you thought the grumbling about the “doomsday budget” from the Left was bad, the caterwauling on this would be deafening.) If Charles Lollar (or, for that matter, David Craig, who is also suggesting the elimination of the income tax) can get it done, the prospects are there for voters to further reward both them and the Republicans in general in 2018 – an important election because the winners will draw the next set of redistricting lines.
So I would prepare to be a little disappointed if you’re expecting our income taxes to magically disappear the moment Charles Lollar is sworn into office. However, he makes a good point in that we should be making bold initiatives, because being cautious isn’t really getting us anywhere. If you’re going down, go out with your guns blazing and don’t spare any bullets.
Returning once again to a familiar role of thorn in the side and burr under the saddle, Change Maryland and Larry Hogan took the occasion of the final legislative session under Martin O’Malley to remind us of his underwhelming record of “accomplishments” over the last long eight years, wrapped up in one release. All we needed was the bow, as Change Maryland remarked that:
- They broke promises to state workers by diverting $200,000,000 from pension funds to plug their budget gap.
- They’ve eviscerated local arts funding to hike the film tax credit for Hollywood millionaires.
- They raided the Transportation Trust Fund then raised gas taxes to pay for mass transit.
- They hiked income taxes on families, small business and large employers.
- They blew $125,000,000 of our tax dollars on a health exchange website that still doesn’t work and was never needed in the first place; today, more Marylanders lack health insurance than when O’Malley-Brown took office.
- More than 73,000 residents have had their health insurance policies cancelled and tens of thousands more have seen massive increases in their premiums and deductibles.
- They put the teacher union bosses that bankroll their political machine ahead of students, parents and classroom teachers.
- They’ve badly mismanaged the education budget, as a result inner city schools are falling farther behind, state SAT scores are down and elementary school reading aptitude is flat. And, even the teacher union said their rollout of Common Core was a mismanaged “train wreck.”
- Their job-destroying tax hikes on the so-called rich and small businesses – those individuals earning $100k or more – backfired, missing revenue projections.
- Some entry level jobs will pay a little more but there will be fewer of them.
- There’s a federal investigation into the Anthony Brown Health Exchange but state lawmakers aren’t issuing their findings until well after the primaries.
- Thousands of employers are now “paying their fair share” in taxes albeit to Virginia and the Carolinas; about 6,500 companies have left Maryland taking with them more than 100,000 jobs.
- Likewise, more than 31,000 Maryland residents left for more affordable states, taking $1.7 billion each year out of our economy; among these were thousands of seniors on fixed incomes who can no longer afford to retire near their families.
- It costs you more when it rains and more again when you drive to the beach.
Describing the O’Malley era as one where, “(i)n nearly every quality of life measurement our state is worse off than it was seven years ago… even areas that showed modest improvement came at a horrendous financial cost due (to) Martin O’Malley and Anthony Brown’s mismanagement and one-party rule in Annapolis,” it’s clear that Hogan isn’t too enamored with the last seven years.
But while Hogan strives to “get the government off our backs and out of our pockets so we can grow the private sector, put people back to work and turn our economy around,” we’re more or less supposed to take his word for it. Obviously some of these items he complains about from the outside will be ones he may well find useful when he takes over the governor’s chair. For example, he (or anyone else for that matter) will have to figure out how to backfill the pension funds, live with the increasing minimum wage (which, for all his charms, he won’t be able to get the General Assembly Democrats to rescind), and roll back taxes and fees to previous levels yet keep the budget in balance. That aspect may actually be the easiest because he would set the budget. Unfortunately, we’re stuck with Obamacare for at least the first two years of anyone’s term, and probably longer.
However, I have a prediction for you. If the budget gets smaller – or even if it’s level-funded – you will hear a howling like you’ve never heard before from the special interests, press, and Democrats (but I repeat myself) who will be out marching in the streets against the heartless Republicans. Remember why we had a Special Session a couple years ago? It was because we passed a “doomsday budget” that was “only” $700 million higher than the previous one, and despite GOP objection we ended up raising spending another $500 million. Again, that was with a budget increase! Heaven help us if we actually proposed spending less money!
So those we elect in 2014 need to be ready and be stiff of spine because those Annapolis fat cats are going to come after us. We threaten their existence on the government teat and they know it. Having a $125 million boondoggle of a health exchange isn’t helping, which is why that scandal is being swept under the rug just as fast as the broom can collect the dirt.
In this part of the state we have some opportunities to chip away at the Democrats’ overall advantage. We’ll have to wait until 2018 to win back the District 37A seat – which will be held for the time being by a woman who I predict will have the same reliably far-left voting record as her predecessor – but aside from that we can speak our piece by ejecting two members of the General Assembly who will occasionally vote the right way when they get the hall pass to do so, but can be replaced by two members who we know will stand up for our interests. We can confound the Democrats’ cynical redistricting ploys by elevating Mike McDermott to the Senate and getting the fresh new ideas of Maryland Municipal League president Carl Anderton, Jr. into the House of Delegates.
Changing the state means pulling our weight, and the Eastern Shore can do most of its part by leaving just one Democrat east of the Chesapeake for the next four years.
Yesterday I looked at how 2014 looks in Wicomico County, but much – too much, as I see it – of their decision-making is truly made in Annapolis. And with current governor Martin O’Malley attempting to burnish his credentials for a position inside Hillary Clinton’s administration – oh wait, he’s supposedly running himself, isn’t he? – it’s important to him that he establish himself with the progressive crowd.
What this means for us is that no tax increase is off the table, but it’s more likely we will see renewed efforts at green energy, gun control, and salvaging the failed Obamacare rollout in Maryland – but if worse comes to worse, it’s Anthony Brown who will be thrown under the bus. In the decision between a Maryland legacy and a White House bid, well, no lieutenant governor has succeeded his boss anyway.
Brown is probably the conventional wisdom favorite to succeed O’Malley and become Maryland’s first black governor; of course there are other main contenders on both sides. Attorney General Doug Gansler seems to be the Democrats’ backup plan but has endured a rocky start to his campaign; meanwhile Delegate Heather Mizeur seems to be the one establishing a number of truly far-left issues in the campaign – witness her idea for marijuana legalization.
On the Republican side, three top contenders seem to be out to appeal most to the conservative crowd, with a fourth joining the field in January. Harford County Executive David Craig obviously has the most well-rounded political resume, but Delegate Ron George represents a more populous area around Annapolis. Charles Lollar is running the most populist campaign, but he may receive a run for his money once the social media-savvy Larry Hogan formally enters the race next month. His Change Maryland Facebook page claims over 70,000 supporters of all political stripes – in a four-way Republican race, 70,000 votes might be enough.
There are only two other statewide races this year, since there’s no Senate race this cycle. With Attorney General Gansler abandoning his post to try for governor, there are four Democratic members of the General Assembly out to succeed him – Aisha Braveboy, Jon Cardin, Bill Frick, and Brian Frosh all seek the seat, and all but Cardin have officially filed. No one has yet filed on the GOP side, but 2012 U.S. Senate candidate Richard Douglas seems to be leaning toward a run, allowing the Republicans to avoid the ignominy of whiffing on a statewide race for the second cycle in a row.
Things are shaping up as a rematch of 2010 in the Comptroller’s race, as Republican William Campbell is again challenging incumbent Peter Franchot.
With so many members of the General Assembly attempting to move up to higher offices, it creates a cascading effect in the various General Assembly races. While the GOP is probably not going to see a General Assembly majority in the 2015-18 cycle – and has the headwind of being redistricted in such a manner to try and cut their minority – being on the wrong side of a lot of issues may make it tricky for Democrats to not lose seats. Republicans have a goal of picking up seven Senate seats, giving them 19 and allowing them to filibuster, and wouldn’t be unhappy with picking up the four House seats required to possibly bypass committee votes on key issues.
As I noted above, though, the key issues will be revealed once O’Malley introduces his legislative package to the General Assembly in mid-January, shortly before his annual State of the State address. Last year he got his gas tax increase to build the Red Line and Purple Line, authorization for offshore wind, and his onerous gun restrictions in the wake of the Sandy Hook tragedy, so this year’s agenda will probably pivot back to measures he believes will help the state’s economy but in reality will probably redistribute even more wealth from the productive to the slothful, growing government at an even faster pace. Many of those dollars will address perceived shortcomings in education and health care.
That seems to be how O’Malley’s last package of revenue enhancements has worked, because the state once again is facing a structural deficit despite rosy predictions to the contrary. Old chestnuts like increasing the cigarette tax or combined reporting of business income will probably jostle for primary position with new initiatives like a mileage tax, additional penalties for cell phone usage, or a higher toll for being caught by speed cameras.
It’s somewhat difficult to predict the direction of the General Assembly before it begins, as items not on the radar in early January become bills introduced late in the session, some of which pass muster. The gasoline tax in its adopted form was one of those last year, since conventional wisdom predicted a straight per-gallon increase rather than the adoption of a partial sales tax which will increase regularly. Another dynamic which will affect timing is having the filing deadline for the 2014 ballot come during session – surely some will wait and see what their path to re-election looks like before introducing certain controversial bills. In previous elections the filing deadline occurred well after the session was over.
Once we get beyond the session in April, the primary campaign will ramp up immediately because of the new experience of a June primary. The Democrats tried to change this eight years ago, fearing a bruising primary fight between Doug Duncan and Martin O’Malley, but succeeded this time because of changes in federal law requiring longer lead times for overseas military voters. Instead of pushing the primary back a couple weeks to comply, though, they decided on a full 2 1/2 months.
At this point there are three main contenders on the Democratic side, and I think that number will stay the same – my thought is either Dutch Ruppersberger will pass up the race (more likely) or, if Dutch gets in, the damaged goods of Doug Gansler will drop out. Obviously there will be more than three on the ballot but some fall under the auspices of perennial candidates who I think are just working on that line in their obituary where it says so-and-so ran for governor five times.
For the GOP, the same is true. In their case, I don’t think there’s enough money out there for four main contenders and whoever raised the least in 2013 is probably the one who exits the race after Larry Hogan makes it formal. In Hogan’s 2010 gubernatorial bid he lent his campaign $325,000 so presumably Hogan has the personal wherewithal to use as seed money; perhaps the dropout will agree to be the running mate of another contender.
It’s interesting, though, that the problems Maryland faces – at least the ones not of their own making, a category in which I’d include the overregulation of local county and municipal governments – are very similar to those faced right here in Wicomico County. Maryland has the “benefit” of being the host state for thousands of federal government worker bees, but little industry to speak of. It’s notable the campaigns are now paying lip service to the concept of re-establishing a manufacturing base, but the process will take at least a couple terms of office and will certainly be at odds with the stated goals of some among the Radical Green who desire a pristine Chesapeake Bay. Development and a reasonably clean Bay can co-exist, but if you want circa-1600 conditions that won’t happen.
And because there are so many who depend on government for their livelihood as workers – or survival as dependents – the concept of “One Maryland” is laughable on its face. The needs of Baltimore City or Somerset County residents don’t often coincide with the desires of your average denizen of Takoma Park or Chevy Chase, but supposedly they are all “One Maryland.” I think there are at least four Marylands – the energy-rich areas of the state’s panhandle, the I-95/I-270 corridors stretching from Harford County on the north to the Beltway suburbs hard by the District of Columbia and back towards Frederick, the bedroom suburbs of southern Maryland which are rapidly changing in political posture, and the Eastern Shore, where agriculture and tourism coexist, but in an occasional state of hostility. One can’t even say that their needs are similar because jobs are plentiful around D.C. but tougher to come by on the Eastern Shore and in Baltimore proper.
It’s not likely one man (or woman) can unite these areas, but the question is which coalitions will hold sway. Finding the right combination will be the key to success for the state in 2014.
It (almost) all comes down to this.
Perhaps the most important – and controversial – issue in Maryland is money. How much of it will the state take from your wallet?
We’ve heard the litany for the last couple years: all the tax increases, all the new tolls, and dozens of other new ways the state parts you from your cash. I don’t know about the rest of you, but if I went out and earned it, I consider it mine until I decide what to spend it on.
So let’s see what the three candidates in the race so far have to say about the situation.
David Craig: As Governor, I will repeal, reduce or eliminate any tax or fee that is impeding job growth – rain tax, business taxes, income taxes, sales taxes, and fuel taxes for starters. I will eliminate the tax on pensions.
Under the Maryland Constitution, the Governor controls the budget. As governor, I will use this authority to make actual cuts to the budget, and I will end the practice of attempting to fool voters into thinking spending is being reduced when it’s not. Such budget games enable politicians to carry out their real agenda which is to grow their government with your money. As for taxes, fees and tolls, those that are the most damaging to individuals and our economy will be reduced or eliminated.
As Governor, I will support withholding funds for departments and agencies that have recurring problems uncovered in state legislative audits. (campaign website)
Harford County Executive David Craig today called on the Maryland General Assembly to repeal the so-called rain tax in the next legislative session. (press release, July 1, 2013)
monoblogue: But is there any chance we’re going to see some of that stuff rolled back if you’re elected?
Craig: I will look at all of them. But if somebody says “which tax first?” I’m going to look at all of them. There are certain taxes that probably haven’t been on the table that people said, would you ever get rid of this? If the state says that we’re going to make – we have a Public Service Commission to keep your BG&E rate as low as possible, why do we tax it? Why do we tax it? If we got rid of that, it gets rid of $5 on your BG&E bill every – well, it would save you 60 bucks. And guess what? You’re probably going to spend it somewhere else.
The gas tax – I do tell people I have to be cautious to (not) say I’m going to get rid of this tax or lower this right away because – I’ll have to use the septic tax for an example – when Ehrlich was governor the septics were all done through PAYGO, so he didn’t have capital projects. This governor turned it to bonding, so if I’m stuck with paying off a bond I’ve got to do that first before I can get rid of the tax. (monoblogue interview)
Ron George: Lower the Corporate Income Tax Rate by 2% to 6.25% in 2015 and lower it .25% in 2016 and 2017 until it rests at 5.75 percent, creating an incentive for businesses to come and to stay in Maryland.
An across the board 10% income tax cut. This puts more money in the pockets of working families and helps many small businesses to grow the economy.
Encourage Baltimore City in the reducing of their property tax rates.
Repeal the Gas Tax and the Rain Tax, challenging the EPA in court if necessary.
Allow Maryland residents to receive a 20% sale tax credit on all individual items bought for over $100.00 in Maryland when they file for their tax returns and supply a proof of purchase, thus creating an incentive for Marylanders to buy Maryland goods. (campaign site)
George advocated tax cuts over tax credits, claiming that the latter is the Democrats’ way “to make you dependent.”
“You play their game, and you get a tax credit,” George said. “They’re picking winners and losers.” (Southern Maryland News, June 26, 2013)
The photo to the left is him beaming after signing the Taxpayer Protection Pledge, a document put out as a vow between the candidate and the taxpayer, through Americans for Tax Reform. (monoblogue, June 21, 2013)
“I agree with Comptroller Franchot that we cannot afford more bond lending,” George remarked. “O’Malley is shifting today’s debt onto our children. He cannot fund the budget with existing revenue so he has backfilled the budget with bond bills.”
Del. George also noted that it was the O’Malley/Brown administration who extended our debt service from 5 years to 15 years thus creating ever increasing future structural deficits. (press release, September 26, 2013)
Charles Lollar: One solution he advocated was a taxpayer’s bill of rights (or TABOR law) like Colorado adopted some years ago. Simply put, a TABOR law means annual spending can only be increased by the sum of percentage of population growth plus the rate of inflation. (WCRC meeting, August 26, 2013)
Referring to the state of Maryland, Charles warned “we can’t afford our lifestyle,” claiming that $9.2 billion of a $35 billion state budget comes from various federal grants and stimulus money. We bring in only $26 billion of a $35 billion expense tab, said Lollar. (Wicomico County LDD, March 23, 2013)
I will immediately create an attractive business environment by proposing:
Reduction of the state sales and use tax from 6%, requested by and enacted for the O’Malley Administration, back to 5%.
Repeal the Rain Tax (the “Impervious Surfaces Tax,” requested and signed into law by Governor O’Malley), which imposes a “storm water management fee” upon Maryland landowners in ten counties to collect and treat pollutants in storm water and release it to the Chesapeake Bay or its tributaries.
EPA’s decree was imposed on New York, Pennsylvania, Virginia, West Virginia, District of Columbia and Maryland. Yet, only Maryland has instituted a levy on its property owners to meet EPA’s standards.
Repeal the new 24 cent per gallon added tax, which substantially increases the costs of transportation to all Marylanders and injures the ability of those who rely on water and land transportation to operate their businesses and employ others. The new O’Malley Administration tax has been added on top of all other gasoline taxes Marylanders must pay.
Repeal the Death Tax (the “Estate or Inheritance Tax”) which essentially “robs the dead” by stealing the fruits of one’s lifetime labor upon death by taxing once again your assets, already taxed during your lifetime through income and other taxes. State and federal death taxes have a dreadful impact upon many Marylanders and family owned business and farms, causing substantial financial pain to, and often the livelihoods of, family survivors forced to sell the family farm or business to pay these taxes. (campaign website)
“I would do something a whole lot different. We would start from where we were last year, go backwards 3 percent from there – let that be a bottom-line dollar figure – and then go right back to our state department leaders and say…show me or justify why it needs to be more than that prior to this budget going forward.”
“I don’t just want to balance the budget, gentlemen, I want to send refund checks back home to the citizens here in the state of Maryland.” (blogger interview, June 24, 2013)
“If someone with the fiscal experience that I have can step in there and write us a budget that puts us on track to a balanced budget, with no dependency on federal dollars, then I think I’ve done enough for the state of Maryland.”
“…if we pass a tax payer’s bill of rights and we mandate that your state government cannot grow any faster then the cost of living and CPI (consumer price index), then if your paychecks don’t grow more than one percent, neither should your state government. If we had that law passed, we would have sent checks home to every legalized, tax paying citizen in Maryland for the past eight years.”(interview, Raging Against the Rhetoric, July 2013)
Lollar would institute a Taxpayer’s Bill of Rights, so that government spending and taxes would not outpace the inflation rate. He would amend the state constitution to require a referendum in order to increase taxes at a faster rate than inflation. (Real Clear Markets, September 3, 2013)
Lollar, who lost a 2010 race against Rep. Steny Hoyer (D-Md., 5th) and is hoping for better results with his run for governor in next year’s election, said the state budget should start out with “what you have,” not “what you want,” as he said the current governor and Democratic-controlled General Assembly has done year after year.
“That policy is terrible,” he said, adding that the state budget is growing faster than Maryland residents’ paychecks. (SoMDNews, November 1, 2013)
If you’re looking for help on the other side of the aisle, well, good luck.
One key goal of Anthony Brown’s business ideas is “enabl(ing) state and local government to adequately fund our shared priorities.” After the 70 or 80 tax increases we’ve endured over the last seven years, one would think the funding is already more than adequate.
And while Doug Gansler doesn’t address these issues directly, Heather Mizeur is looking to yet another “sin tax” by legalizing and taxing marijuana; meanwhile, she’s also itching to tax the state’s producers. While she claims the overall effect would be “revenue neutral,” we lost money the last time this was tried.
So when I look at the candidates, I have to wonder who I think would hold the line. David Craig has a realistic view of the situation, but my fear is that we will see too much of the “look at all of them” and not enough of the repeal or eliminate. The governor has the whip hand based on his control of the budget, so it should be treated that way. The thing which worries me is that the budget will go down, but there will be the real temptation to keep the taxes to build up the “rainy day fund” or some other excuse. Out of 15 points, I can give him 11.
Ron George has the right ideas, although once again the pacing is a little slower than I’d like. While I didn’t mention it in this go-round, the auditing would be a help with the budget. It would be interesting, though, to see what his budget priorities were.
But I found it odd that he talked about tax cuts over tax credits, but proposed one for the Maryland-made goods. Honestly, that’s not going to be a great incentive for business to move here or people to buy here because it’s more paperwork they have to remember. I’d rather just cut the sales tax. So for Ron it’s 12.5 of 15 points.
The best thing any of the three main candidates have come up with is the idea of a TABOR, which Charles Lollar proposed. Its appeal is basic: there would be a spending cap for the state. Priorities would have to be set, and choices made, rather than the seemingly common belief that tax dollars will endlessly be provided. Now whether he could eliminate the entirety of the $9 billion we receive from the federal government is, to be quite honest, very questionable, but certainly getting a TABOR passed would help keep spending to a point where it’s manageable.
But the financial arena is where a populist approach works best. It’s not perfect because there are still some vague areas which need to be explored further, but this is perhaps Lollar’s strongest area and he receives 14 of 15 points.
I’m not quite done yet, though. The final part will deal with some of the intangibles I found.
Yesterday the latest Maryland Poll from Gonzales Research came out (h/t Maryland Reporter), and it suggests that we have a long way to go in educating the voters of this state about the real facts at hand. But there are a few encouraging signs, I suppose.
In the nine months since a similar sampling in January, we can now determine that Barack Obama’s job approval has gone down six points in the topline, from 64% to 58%. But the difference between “strongly approve” and “strongly disapprove” has plummeted in that span: it was +19.4 in January but is now just +6.7. A 13-point swing in that demographic suggests the national economic situation of an ongoing sluggish “recovery” is taking its toll.
By the same token, the 54% job approval Martin O’Malley enjoyed in January was a mirage, too. O’Malley now finds himself in a statistical dead heat, with 48% approval and disapproval in the October poll. But that difference between “strongly approve’ and “strongly disapprove” has once again moved more than the six-point decline on the topline, going from a +0.2 in January to a (-15.1) now. That’s an even more pronounced 15-point swing not shown by a 6 point drop in the headlines. Tellingly, nearly 3 of 10 Democrats now disapprove of O’Malley.
But that doesn’t seem to reflect on Anthony Brown, who leads the first non-campaign poll by a fairly similar margin to the Garin-Hart-Yang poll released by Brown’s campaign last month. The Maryland Poll has Anthony Brown/Ken Ulman at 41%, Doug Gansler/Jolene Ivey at 21%, and Heather Mizeur at 5%. (Maybe she can have Wayne Gilchrest as a running mate. As an aside, Mizeur also got the endorsement of Salisbury City Council member Laura Mitchell.)
Unfortunately, the numbers trend the wrong way on some key issues. While 49% of Marylanders polled favored the death penalty and 44% opposed it in January, those numbers are now reversed in that 49% favor the law rescinding it and 44% said no. Then again, its support was rather soft all along because it had a strong approve/strong disapprove ratio of (-3.2) in January while the repeal now has a +5.5 ratio. In part, this is probably because of the state’s reluctance to use the death penalty and the over-sensationalized Kirk Bloodsworth case. However, I would wager that if you put a name and a victim to a case (e.g. Thomas Leggs and Sarah Foxwell) the support for rescinding the death penalty repeal declines drastically. (In that case, Leggs pled guilty to avoid the death penalty, while the family agreed because of the probability of endless appeals.)
Meanwhile, those who responded to the poll must have believed the onerous gun laws passed by Martin O’Malley and Democrats would actually curb crime. When asked in January, support for an assault weapons ban in the immediate wake of Sandy Hook was 58-40 (with a +17.5 intensity of strongly support/strongly oppose), while background checks passed muster by an 88-11 figure overall. But the gun law as passed maintained its 58-40 support (with only a slightly lower +16.7 intensity.) That, my friends, is a sadly bamboozled and gullible public.
Yet when it comes to the pocketbook, people get it. When asked whether a 10 cent per gallon gasoline tax was acceptable in January, just 26% favored in with 73% opposed. The intensity of opposition was just as stiff, with a factor of (-50.8) strong approve/strong disapprove.
So now that the reality of a 21 cent per gallon increase spread out over three years has smacked Free Staters in the pocketbook, they hate it even more. 22 percent approve of the tax hike, while 76 percent oppose it. Intensity remains as strong, at a factor of (-50.7). Most telling to me is that the Democrats don’t tout it as a success.
Knowing that, where do we go from here? It appears to me that the emotional appeals of Democrats have worked on the above non-fiscal issues because those polled are probably not affected – the chances are small that someone knows a person who’s been heinously murdered by someone who would receive the death penalty, and for those who do too many are blaming the tool used for the victim’s demise.
I can sit and stare at a gun with a 30-round magazine all day, but as long as I don’t pick up the weapon and make the physical motion to fire it, the gun is inert and harmless. Thousands of Marylanders have access to a gun, most have never fired it outside the confines of a closed gun range. Those who use the tool of a handgun otherwise are more often than not breaking enough laws already that the so-called Firearm Safety Act of 2013 won’t prevent them from carrying out their mayhem. However, another person with a weapon just might.
Someone out there probably collects the rare news stories of crimes prevented by the presence of a gun, but the narrative of “if it bleeds, it leads” plays into the hands of those who would usurp our Second Amendment rights. Yet if the hapless victim of random violence had his or her own weapon, things may have played out differently. Instead, the state is placing a burden on those who simply wish to defend themselves, and I thought government was supposed to be about empowerment. That’s what liberals tell me, anyway.
Liberals like Anthony Brown, Doug Gansler, and Heather Mizeur.
And by the way, where is the Republican poll? I think the Gonzales pollsters have fallen into the same “one-party state” trap Doug Gansler did. I’d like to see something more scientific than a blog poll on that race.
Since I didn’t get a GO Friday feature this week, I added my own two cents as I told you I would. This place doesn’t go dark.
But if you want to be considered for GO Friday next week, just let me know.
Gasoline. It’s something all of us need, and if you’re reading this in Maryland last month you began paying roughly 3.5 cents more per gallon at each fillup thanks to the state expanding the sales tax to gasoline as part of a multi-year process for full adoption of our 6% sales tax to that product.
While that bad news applies to Maryland consumers, all of us may soon be seeing less bang for the buck if the EPA gets its way. They’re edging us closer and closer to widespread usage of E15 fuel, which may be a necessary method to comply with short-sighted federal law. The problem: a “blend wall” where the amount of ethanol mandated for use runs up to the limits created by actual consumption, which is down significantly from that which was predicted when the regulations were written several years ago when the economy was humming along.
Many longtime followers of my site know I use the American Petroleum Institute as a go-to resource when it comes to energy issues. Yes, they are an advocacy group but they advocate the tried-and-true solutions for our energy problems, advocating for the least-costly alternative of petroleum which, as a beneficial byproduct, is a great job creator to boot. So while the EPA believes it’s “flexible” on renewable fuel standards enacted as part of a 2005 law, API believes they’re quite inflexible. The only real change was in the category of cellulosic biofuels, which saw its mandate cut by more than half – quite handy when there’s only a negligible amount currently in production. (API has a handy guide to the pitfalls of the RFS here.)
Meanwhile ethanol apologists – like the group which lobbied for E15 in the first place – claim their product will create jobs and reduce our dependence on foreign oil without making an impact on grocery prices, Yet their solution is more government mandates and subsidies. I find it quite telling that this group formed mere days after the election of Barack Obama, who was probably – and correctly – thought of as a person who would shower even more government largess onto the ethanol industry in his quest to wipe out the coal and oil industries.
Yet Congress can act, just as it did in making the mandates in the first place nearly a decade ago – a lifetime in the oil industry, given the boom in oil exploration and fracking over the last five years. So what would happen if the ethanol mandates were scrapped?
Obviously you would have a number of winners and losers. All those who invested in ethanol plants figuring that the government subsidies and mandates would have profit rolling their way – well, they would have the biggest “L” stamped on their forehead. Farmers may take a temporary hit as corn prices drop, but they would eventually stabilize; moreover, farmers who shunned soybeans or wheat for corn to be turned into fuel could go back to those other staple items.
Consumers would win in a number of ways. First of all, they’d get better quality gasoline that’s less expensive, which would both increase their mileage per gallon and amount of money remaining in their wallets. Secondly, the lowering of corn prices would benefit them at the grocery store, and not just in corn-based products because feed for poultry and livestock would be cheaper. And lastly, their small equipment would last longer because ethanol is poisonous to many small gasoline-powered motors.
And while the intention of these mandates was to reduce our dependence on foreign oil, new advances in exploration and extraction have placed the goal of North American energy self-sufficiency within reach. Nor is it necessarily in the form of gasoline, as companies with large automotive fleets are moving toward using natural gas as a motor fuel, building their own infrastructure along the way. (Yes, this can be done without a massive taxpayer subsidy or regulation.)
It just makes more sense to me to not grow our fuel, but our food. When you think of corn, you don’t think of a gas tank but instead think about that tasty ear cooked to perfection with some butter and pepper on it. Let’s get back to using corn for what the Good Lord meant it for, eating.
Yesterday Maryland wallets got a little bit lighter as travelers over most of Maryland’s tollways had to dig a little deeper into their wallets, and those motorists unfortunate enough to need to fill up their gas tanks chipped in another forty cents or so to the state’s coffers. (My travels take me to Delaware today – guess where I’ll fill up?) And those with property in nine of Maryland’s counties? They just saw a significant property tax increase. (The exceptions are the fourteen rural counties not yet covered by the state’s new “impervious surface fee” derisively known as the “rain tax” and those property owners in Frederick County who will pay exactly one penny per piece of property.)
Needless to say, a number of state Republicans weighed in on the topic:
State GOP Chair Diana Waterman: ”This irresponsible taxation and the reckless spending it supports offers an opportunity for those of us who believe in good government. As Republicans, we are in a great position to remind our fellow Maryland residents why 2014 must be the year we send a loud message to the Democrats that it’s time to put people first.”
Maryland Young Republican Chair Brian Griffiths: “These taxes will hurt all Marylanders and huge sections of our economy as businesses are forced to raise prices to cover the costs of these new taxes, the costs of which will invariably be passed on to the consumers. At the end of the day, just these three tax increases will likely cost each Marylander over $1,000 a year that could be better spent to stimulate our economy and create job growth.”
Several other state Republican leaders were quoted on the Maryland Politics blog, part of the Baltimore Sun. Writer Michael Dresser quoted the group as calling this a “virtual downpour” of tax increases.
Candidates for Governor weren’t missing the opportunity, either.
David Craig: ”(W)e are witnessing yet another example of how the one-party monopoly in Annapolis is working for itself and not for you. With the increase in tolls and the first of multiple increases in the gas tax, Maryland families are being forced to give more of their hard earned dollars to a failing and ineffective government.”
Craig also put together a brief video with a similar message. (Shouldn’t it have an authority line, though?)
On the rain tax, David added, “Stormwater-related costs necessary to comply with EPA mandates are projected to cost county taxpayers a staggering $6.3 billion through 2025. If you wanted to open a business with a parking lot, would you want to come to Maryland and figure out this new tax?”
Ron George: “O’Malley/Brown now are stealing from your summer vacation funds. Since they robbed and misspent what was needed for transportation, they are now grabbing your money through tolls, rain and gas. As you look at the bay bridge behind me, it is an example of what is happening around Maryland. More and more people on the Eastern Shore, which has lost manufacturing jobs, have to drive to Washington and Virginia for a job, if they have a job. Less and less people on the Western shore will drive to doctors and businesses on the Eastern Shore.”
“This is not how you build an economy.”
Charles Lollar: ”To think that just a few weeks ago, Lieutenant Governor Anthony Brown stated that Maryland had a ‘great session’ makes me wonder what great accomplishment they had. Was it the Rain Tax that punishes citizens when it rains because of how much ‘impervious surface’ they have on their property? Was it the fee increase for tolls up to $6? Or was it the gas tax increase that pretty much goes up year after year?”
Even though he’s not a candidate, it’s no surprise that Change Maryland had some reaction as well.
Larry Hogan: “Your family trip to the beach just got a lot more expensive. Today, the second round of O’Malley toll increases took effect and the gas tax increase kicked in at the same time. While you are sitting in traffic at the Bay Bridge for the 4th of July weekend you can thank Governor O’Malley and the monopoly in Annapolis for the 140% increase in tolls, and for giving us the most expensive gas in the region.”
“Governor O’Malley says he’s ‘Moving Maryland Forward’. But if that’s moving Maryland forward, I say maybe next year, we’ll just have to take Maryland back!”
Needless to say, our governor didn’t look at it this way, placing a splashy graphic on his Facebook page:
These, of course, are numbers coming from the same guy who has “cut” billions in state spending yet whose budget has increased by 30% since taking office in 2007. At 9,500 jobs a year, he’s barely making a dent in Maryland’s chronic unemployment, nor is he accounting for the potential of job losses in various industries dependent on people having extra money, such as tourism. Just as a real-world example, it would take just over 22 years for O’Malley to get to full employment gaining 9,500 jobs a year (based on the Bureau of Labor Statistics unemployment estimate of 210,800 unemployed Maryland workers in May.) Obviously that doesn’t account for population growth, either.
But what slays me is the concept of building a “21st century transportation network” using the 19th century technology of the railroad. Granted, rail transport has its place in commerce and trade, but as currently practiced it is woefully inefficient for the needs of most commuters. (If it weren’t inefficient on an overall scale, why are such a small percentage of Maryland workers using it?) I think my concept of an improved transportation network – which could also include a widening of I-70 beyond Frederick, to avoid the usual bottleneck of merging I-270 traffic and allow smoother flow westward – is far more practical than the O’Malley/Brown vision.
The idea of a good transportation network is to get people and goods to where they need to go, not pretend that a light rail boondoggle which will cost billions is the panacea. I don’t think people would mind the additional transportation taxes and tolls as much if they were confident the money would be used to repair and improve our highways and bridges – instead, most of it seems to be earmarked for two rail lines and one toll road few will use.
Similarly, we all want a cleaner Chesapeake Bay, but the idea of a mandate from on high which affects some more than others and is to be used for a concept where fruition is a constantly-shifting set of goalposts (because it’s in the best interest for those who created the benchmarks to continue as a political entity if the problem is never solved) simply seems unfair to those saddled with paying this fee on top of their remaining tax burden.
That’s why we’re angry. But Democrats are wagering that all this will be forgotten in 17 months’ time, particularly as some of these transportation projects reach the groundbreaking stage, with its requisite photo-op.
But consider the relative lightness of your wallet when you see your local Democrat gladhanding at this photo-op. If we simply used proper prioritization for transportation funding, we wouldn’t have needed to raise the gas tax every year from here to eternity.
That’s the common sense woefully missing from state government.
If it’s not bad enough that Maryland drivers will be suffering from the first of what now promises to be annual hikes in the state’s gasoline tax, due to a combination of adding gasoline to the palette of items subject to the state’s sales tax and eventual indexing of the existing gasoline tax to inflation, a pending federal bill may allow the addition of natural gas-based ethanol as an allowed blending agent, joining the corn-based ethanol that’s currently allowed to comprise up to 10% of most available gasoline.
H.R. 1959, the Domestic Alternative Fuels Act of 2013, was introduced as an effort to provide other options for attaining the renewable fuel standard already codified into law. But a coalition of groups, led by the Competitive Enterprise Institute, recently wrote a letter to Congress urging the bill be defeated, citing the idea that renewable fuel standards should be scrapped, not enhanced:
The undersigned organizations urge you to oppose H.R. 1959, the Domestic Alternative Fuels Act of 2013. The bill would allow ethanol derived from natural gas to count toward the mandatory blending targets established by the Renewable Fuel Standard (RFS) and the EPA’s implementing regulations.
We commend Rep. Pete Olson (R-TX) and his co-sponsors for seeking to break the corn lobby’s legal monopoly on a significant and growing share of the U.S. motor fuel market. However, the solution is not to make the RFS more inclusive, so that more special interests profit at consumer expense, but to dismantle the program.
The other eleven groups signing with CEI represent a broad spectrum of conservative and free market entities: 60 Plus, American Commitment, Americans for Prosperity, American Energy Alliance, Club for Growth, Commonwealth Foundation, Freedom Action, FreedomWorks, Frontiers of Freedom, Let Freedom Ring, and the National Taxpayers Union.
On balance, the groups are correct in wishing the ethanol mandate be eliminated. Even with the abundant supplies of natural gas which weren’t in play just a few short years ago when the original RFS was cast in place, there is no need to supplement the fuel we use in our vehicles; in fact, eliminating the mandate would probably make those who own watercraft or items with small gasoline engines ecstatic since they’ll no longer have to search for ethanol-free fuel to maintain their equipment.
The EPA’s push toward allowing E15 fuel stems from the increasing amount of ethanol required to satisfy these artificially-induced mandates for usage running into a “blend wall” where it becomes physically impossible to limit the amount of ethanol in a gallon of fuel to just 10 percent and comply with the law. Writers of the RFS miscalculated the future demand for fuel, which is increasing more slowly than predicted due to a number of factors: more fuel-efficient cars and a sputtering economy most prominent among them.
Interestingly enough, Rep. Olson is also in favor of eliminating the mandates, but he obviously feels that’s politically impossible at this time:
The RFS’ singular focus on corn ethanol translates into higher food costs for working families, as well as higher feed costs for livestock producers. To be clear, my primary goal will always be the full repeal of the market distorting RFS. However, until then, we can take care of immediate problems by providing greater participation and competition under the program. Expanding the sources for ethanol will only benefit all Americans. I’m pleased this measure enjoys bipartisan and widespread support.
But this bill promises to align two key constituencies which aren’t always in the same room. It’s a point made by CEI Senior Fellow Marlo Lewis:
Enacting this bill would align the natural gas lobby with the corn lobby. Their common interest would be to increase the overall RFS blending target beyond 36 billion gallons, mandate the sale of E20 or even higher ethanol blends, and relax environmental criteria so that corn- and gas-based ethanol can fill the void created by non-existent advanced biofuels.
All this would do is create yet another group of hogs lining up at the federal cronyism trough, trying to grow their business at the expense of competition despite having an inferior product. You may not remember the gasoline price shock of 2008, but one outgrowth of it that I noted at the time was a video campaign dubbed Nozzlerage and the formation of a group called Citizens for Energy Freedom, a subgroup of another entity called the Center for Security Policy (CSP). Their solution was to give ethanol a permanent market by mandating cars sold in the United States be flexfuel vehicles. As I said back then:
Regardless of how little it supposedly costs to convert cars to flexfuel, the truth is that the option has been available for some time and the market has proven it to be a slow seller. Thus, the soon-to-be-created CSP subgroup (Citizens for Energy Freedom – ed.) is looking to lobby for the bill’s passage and force automakers into another mandate, just like CAFE standards, air bags, catalytic converters, and many other features that were foisted upon automakers by big government. Certainly the idea has some merit but by placing the initial meeting in Des Moines, Iowa, it’s a safe bet that ethanol created from corn will take center stage and we’ve already seen the impact ethanol mandates and subsidies have had on our food prices.
Taking food out of our mouths and dumping it into our gas tanks has always been a bad idea, particularly when there is a cost-effective and inedible solution already in place. CEI and its allies make a sound point, but it will be up to someone in Congress to introduce the bill to eliminate RFS mandates. Of course, we need a President who would sign such a common sense bill and right now common sense is in short supply around the Oval Office and probably will be until at least January, 2017.
First off, I want to wish all those dads out there a happy Father’s Day. I spoke to my dad in Florida this morning, and got a call this evening from my daughter in Ohio.
And because it’s Father’s Day, the news is sort of slow – unless you want to count sniping at Barack Obama’s Father’s Day picture with his super soaker squirtgun. Yet those who would be the Republican candidate for governor in Maryland have been busy laying out their campaigns, preparing for the grunt work of getting the word out to voters.
As one example, I got these in the mail Friday from the Ron George campaign.
These are actually fairly slick palm cards, with one flap highlighting Ron’s bio and record while the other two serve as an information collector and return envelope to the campaign. Very nice and efficient.
Meanwhile, last week David Craig put out a highlight video of his June 3-5 campaign tour, although most of it focused on day 1.
But more importantly, Craig used his connection with the advocacy group Change Maryland to highlight the fact that Maryland’s spending is out of control, projected to rise at twice the national average. It allowed Craig to assess the situation: “This government taxes too much, takes too much, regulates too much and is expanding at the expense of job creators and taxpayers.”
In comparison to several other states in our region, the data suggests Maryland looks even more like a drunken sailor.
With the possible exception of the gas tax that takes effect next month, there is no tax reviled more by Maryland conservatives than the EPA-mandated “rain tax.” (In reality, it’s an impervious surface fee, but the effect is the same: money out of property owners’ pockets.)
And even though he’s not officially in the race yet, Charles Lollar had some pointed comments about this fee, with a little praise for Frederick County Commission president Blaine Young:
(T)here is a much deeper story that is not being covered and that many folks haven’t considered.
If you all remember, last year to “balance” the state’s budget, the administration pushed much of the teacher pension costs back to the counties. This move has severely hurt county budgets as they’ve had to move appropriations from certain capital projects to cover these new pension costs. The governments across our state that are the closest to the people are often our counties. Don’t worry, our counties will figure out how to make it work, but it makes it much harder for them.
So what is this rain tax really about? In my estimation, this is just the state paying the counties back for pushing pensions down to them, using the EPA mandate as an excuse. I applaud Frederick County Executive Blaine Young for only charging the residents of Frederick one penny per ERU. The law forced him to comply but he made the right choice by mocking a laughable law.
This bill is hurting non-profits like churches and could drive them out of service. It’s going to drive up costs for malls, grocery stores, and just about everything else with a large, “impervious surface.” In the end it will drive up the costs for consumers to buy products and make it even harder for people to find jobs.
I don’t know if Charles knows something we don’t or is trying to make a subliminal suggestion, but Blaine Young isn’t Frederick County Executive. There’s a chance he may be after the election as that newly-created office will be filled for the first time, but for now he’s simply their commission president.
Regardless, Lollar brings up an interesting sidebar – one for which I have a mild rebuttal. If this were true, why didn’t all 24 counties have to pay this fee? If my memory serves me correctly, my home county of Wicomico is getting a disparity grant from the state to help with assuming the cost of the teacher pensions because we’re one of the less well off counties (and state policy seems to be that of keeping us that way by choking off development.) But at some point we will have to figure out how to pay on that mandate to the tune of $1.2 billion over 10 years – bear in mind our county budget runs in the $120-130 million range.
My hope is that whoever becomes governor will stand up to the EPA – in court if necessary – and tell them to go pound sand. Certainly a clean Chesapeake Bay is desirable, but the state budget also has to address higher-priority items like public safety, infrastructure, and education. It would be great to see a Maryland governor tell the federal government “no thanks” to unfunded mandates because, even if they chip in for a year or three to defray the state’s short-term costs, we end up being stuck with the tab.
Democrats have it easy, since all they seem to know how to do is turn the screws on hard-working taxpayers as a method of amassing money and power to redistribute, showering favored group with undeserved goodies. Unfortunately, other peoples’ money always runs out so new solutions are needed.
I look forward to a spirited debate about a new paradigm.