A sea change in Maryland too?

In the midst of what’s good news about energy production in America – despite the headwinds created by an administration that believes global warming is a large problem while spending millions to prop up failing green energy companies – the question can be asked whether Maryland has achieved its share. I want to quote writer Mark Green from the Energy Tomorrow blog, who writes that based on Energy Information Administration data that:

This is a snapshot of America’s energy revolution – the fundamental shift from energy scarcity to abundance that would have been unthinkable less than a decade ago. The shift is the result of surging oil and natural gas production using advanced hydraulic fracturing and horizontal drilling, harnessing oil and gas reserves in shale and other tight-rock formations. Safe, responsible energy development has made the United States the world’s No. 1 natural gas producer, and the U.S. could become the world’s top producer of crude oil related liquids before the year is out.

Larry Hogan has acknowledged that western Maryland has an “enormous” amount of natural gas and that he favors an “all of the above” energy policy. On the other hand, Anthony Brown is studying the issue to death. At the other end of the state and scale, Brown backs his boss’s offshore wind boondoggle while Hogan mentions that “proponents (of wind power) rarely mention the actual costs which include billions in state and federal subsidies.” In a separate statement, he also decries the potential for offshore wind’s “crony capitalism” under a Brown administration.

You know, there’s no question that the key issue in this gubernatorial race is the economy. Maryland is a state lagging behind its peers, and more and more people speak about pulling up stakes and relocating somewhere else: Delaware, Florida, Virginia, the Carolinas, Tennessee – name a state south of the Mason-Dixon Line and it’s likely someone you knew in Maryland moved there.

But one piece of the puzzle is energy, and those who toil in the oil and gas industry understand what the potential is. In his piece, Green closes by quoting American Petroleum Institute president and CEO Jack Gerard:

We need leaders who reject the outdated political ideology of the professional environmental fringe and the political dilettantes who advance the irresponsible and unrealistic “off fossil fuel” agenda. Because if we get our energy policy right today, we can be the generation that erases what for decades has been our country’s most potent and intractable economic vulnerability: dependence on energy resources from less stable regions and countries hostile to our goals, ideals and way of life.

Writer Rob Port at the Say Anything Blog also asks the pertinent question, and the answer on a state level can be found in Maryland.

I look at it this way. There was a governor and a majority in the General Assembly who were willing to risk over a billion dollars in ratepayer money on something which studies suggested might work but hadn’t been tried in Maryland before, offshore wind. Conversely, given the success of the Marcellus Shale formation in several surrounding states (most notably Pennsylvania), why not encourage the exploration of several other regions in the state which share many of the same characteristics? The worst that can happen is that we find these areas aren’t worthwhile for natural gas with current technology, but the rapidly evolving science of energy extraction means studies done even as recently as a few years ago may be rendered worthless.

Given the correct conditions for marketable extraction of coal and natural gas and an aggressive expansion of power plant capacity which uses those resources, it should be a goal to make Maryland self-sufficient in electricity by 2030. I don’t think offshore wind will get us there, but extracting those resources we have gives us a shot, and provides good-paying jobs for Maryland families who need them.

2014 Good Beer Festival in pictures and text

Plagued once again by poor weather on its bigger day (Saturday) nonetheless hardy beer enthusiasts from around the region gathered to sample a few swigs and generally celebrate all things beer.

Did I mention the weather was subpar? At least we salvaged one decent day, unlike last year.

Unlike last year’s effort, though, there weren’t a whole lot of new wrinkles. Coming back for another year, for example, was the home brewer’s competition and dedicated area.

Another old favorite kept around was the TV lounge, where people cheered on the Ravens and Orioles on Sunday.

Close by were the cornhole games and that maddening peg hook test of skill.

Once the skies cleared for Sunday, those in attendance could (and did) express themselves.

Those chalkboards were mounted aside the local beer garden, which had an interesting occupant.

Perhaps Backshore Brewery (from Ocean City) was here last year but I don’t recall the old VW Microbus.

They also win the monoblogue prize for the best beer name. That and $4 would have secured a pint, I guess.

Yes, I did try it and I thought it was pretty good. But their Boardwalk Blonde Ale was one of my two favorites along with the Shotgun Betty Ale from Lonerider Brewing, which I think came from North Carolina.

Perhaps pale ales weren’t this guy’s style, but it’s what I prefer. I just wanted the shot of his hat, a style I saw on a couple people over the two days. I didn’t notice anyone selling them.

Another local brewer, though, was angling for donations to a different cause.

Burley Oak is doing a Kickstarter campaign to enable the canning of its beer – as it turns out, they achieved their goal. But the coasters were a nice reminder and quite useful, since that coaster is under my drink (alas, diet Pepsi) as I sit here.

Oh, did I mention I was there for political reasons?

It wasn’t quite dripping with political types as the last time we were in a local election year (the first rendition of the GBF back in 2010) but some of the local political incumbents came to cut the ribbon Saturday.

Doing the honors in this instance were four members of County Council: Bob Culver, Matt Holloway, Stevie Prettyman, and John Hall. Culver was around on both days to press the flesh for a County Executive run, but he was pretty much the only one there.

Yet the reception at our tent was quite good and I handed out a lot of items. My emphasis, particularly with out-of-town people who were interested in Larry Hogan items, was on promoting William Campbell for Comptroller and Jeffrey Pritzker for Attorney General. Those statewide downballot races are very important as well.

And despite the rain attendance held steady, described as just under 3,000. It’s good exposure and this year there wasn’t much obnoxious behavior. In short, a good time was had by all.

Oh, and about that top picture? I’m not averse to bartering advertising space for a monthly supply…just saying.

The polling continues

October 7, 2014 · Posted in Campaign 2014, Delmarva items, Maryland Politics, Politics, Polling · Comment 

On Saturday I pointed out the Gonzales Poll Larry Hogan has cited as proof he’s within striking distance in the governor’s race. The news wasn’t quite as good in a more recent Washington Post poll, but it wasn’t as bad as previous polls in that newspaper.

But again it’s a question of turnout, and the Post simply replicated the pattern of registered voters in the state. If Republicans come out to a greater extent than Democrats – many of whom aren’t excited about Brown – that cuts into the Brown lead. Considering the Post poll is of randomly selected adults, I suspect the turnout model they’re using favors Brown in the poll.

So instead of the 15 to 18 points Brown has led by in previous polls, this poll by itself drove the RCP average down from 15 to 12 points.

But the breakdown on issues is interesting. Remember, this is a sample that is probably slightly oversampling Democrats, but the key issue is taxes. Yet on a number of other issues the only ones which reflect closely the partisan breakdown are social issues and public education. It’s hard to believe that fully half prefer Brown on the issue of health care considering how he botched the state’s website, but others like gun laws, job creation, and illegal immigration lean Hogan’s way in comparison to the partisan breakdown of the sample.

Given the crosstabs, though, the best way for Hogan to cut into Brown’s lead is to chip away at the Democrats on the issues that he’s closest to moving ahead on. It’s absolutely essential for Larry to somehow get to about 25 percent of Democrats going his way, with this polling suggesting he’s at about 14 percent. If Democrats get the 62% turnout this poll suggests (with Republicans at 65% and unaffiliated at 48%) that’s the only way he can win.

Somehow the case has to be made to the low-information crowd that a third term of Martin O’Malley is too much for the state to bear. Those of us who have a lick of common sense already know this, but too many people must actually think a poor economy is a good thing.

More encouraging poll news

It goes without saying that Larry Hogan is excited about the most recent polling results and how they affect the perception of the race.

Everyone now knows this race is too close to call. This week, we told you about the Gonzales poll showing us within striking distance of Brown. Yesterday, the media validated these numbers. And today, the Cook Political Report has reclassified this race from “Solid Democrat” to “Leans Democrat”!

The Maryland governors race started as “Solid Democrat” and has moved TWO SPOTS to its current classification.

This varies from the Real Clear Politics version of the race, which hasn’t updated in the month since the YouGov poll that Hogan questioned. They still show the race as “Likely Dem” with a 15-point margin. So which is right?

In my opinion, the fact that Anthony Brown is trying to paint Larry as a TEA Party Republican by stressing the gun law and abortion rather than discussing the state’s moribund economy points to a tightening race. That seems to be the conventional wisdom of the Hogan camp and I’m inclined to agree.

Yet the tale will begin to be told with the debates that begin next week. One thing Marylanders really haven’t seen is how the two candidates perform on the stump to an audience which hasn’t been attuned to the race aside from thirty-second commercials. How will the two fare under the pressure of direct questioning and close media scrutiny? Elections aren’t won with debates, but they can be lost.

So what will be the strategies of the two participants? I would look for Brown to continue his recent line of attack on Hogan by stressing social issues and gun safety in an attempt to hold the female vote – you know, that whole thoroughly discredited War on Women meme. He’ll avoid direct questions on the lack of job creation by saying he has a plan to address it – which he does, all 17 pages of it –  but not go into the specifics of how it may affect Maryland workers.  For example, a “Blue Ribbon Commission on Tax Reform” just means at least two more years of the status quo and inaction, not addressing the issue.

On the other hand, Hogan will stress the “most incompetent man in Maryland” theme for Brown, while sticking with his bread and butter issues of jobs, the middle class, and restoring the state’s economy. It’s carried him this far, so why stop now?

That task will likely be made more difficult by the questioning, which will probably cater more to Brown’s strategy of marginalizing Hogan than tough questions on how the state of the economy got to where it is under the O’Malley/Brown team.

I’m hoping to see a couple polls come out after the debate to gauge the true state of the race. In truth, I think it’s probably closer to the margin of error than the 15-point RCP average. It doesn’t mean Hogan has it in the bag, but we could have a far closer race than 2010′s blowout.

To re-coin a phrase

It took a few days for word to filter out through the local media, but I was very pleased to see Larry Hogan borrow a phrase which has become a rallying cry to some here on this side of the Chesapeake. According to Gail Dean of the Dorchester Star:

For the past eight years in Annapolis, Hogan said, “There’s been a war on rural Maryland. There’s been a war on the Eastern Shore and there’s been a outright assault on watermen and farmers” and other small businesses.

Dean describes what Hogan said about watermen and farmers, and they were all very good points. But those only cover a few fronts on the War on Rural Maryland and its impact on the Eastern Shore.

For example, let’s start a conversation about private property rights in this state. Due to the ill-advised Senate Bill 236 of 2012 – better known as the septic bill – counties are forced to either draw restrictive tier maps or endure an even more draconian rule on subdivisions cast upon them by onerous state law. In 2013 there was an effort made by local Delegates to repeal the so-called “Sustainable Growth and Agricultural Preservation Act of 2012,” the original of which incidentally was sponsored by a Governor who was a former mayor of Baltimore and five Senators from suburban districts. What they know about either sustainable growth or agricultural preservation is probably less than the intelligence of the average farmer or waterman’s pinkie finger.

(It should also be noted that Norm Conway voted FOR Senate Bill 236 [and against farmers] and so did Jim Mathias on the original Senate third reading. He changed his vote to no on the conference bill, perhaps because he knew what the fallout would be.)

Obviously my question is whether Hogan would look to repeal that bill, or make other moves to restore county autonomy in zoning. I know Hogan is gun-shy about repealing law already in place – and yes, that phrase was intentional – but he should know downzoning isn’t popular in local farming circles. Another whisper for Hogan’s “open ear” on that same front would be a moratorium imposed on new Chesapeake Bay regulations until after the Conowingo Dam sediment cleanup is complete.

Now, as far as the War on the Eastern Shore, I think one step in assisting us would be to waive the sales tax for the nine counties on that side of the Chesapeake in order to better compete with sales-tax free Delaware. (All but one of those counties shares a border with Delaware.) If the state can have the precedents of tax-free days for school clothes and various regulations which only apply to certain counties or regions, I think this is one way of jump-starting the local economy and encouraging growth in a region which generally lags the state in employment. It’s also an idea which has been tried and failed in the General Assembly on several occasions, so perhaps it needs a gubernatorial champion. And wouldn’t it be neat to see the phrase “By Request – Administration” on some good bills for a change?

So I’m glad Hogan gets it as far as Eastern Shore matters are concerned, because we would likely never reach our potential under a third term of Martin O’Malley in the guise of Anthony Brown.

The values voters speak

Obviously I’ve been concerned about the upcoming Maryland election, and we’re probably four to six months away from the formal beginnings of the 2016 Presidential campaign on both sides of the aisle. But over the weekend, while Allen West was speaking to us, a few of his former Congressional colleagues were addressing the annual Values Voter Summit in Washington in an attempt to gain support. Ted Cruz narrowly topped the field in their annual straw poll, drawing 25% of the vote and besting fellow contenders Ben Carson (20%), Mike Huckabee (12%), and Rick Santorum (10%). Leading a second tier were Bobby Jindal and Rand Paul, both with 7% of the 901 votes cast.

Also worth talking about were the issues this group was most concerned with: protecting religious liberty topped the list, with abortion a strong second. Interestingly enough, protecting natural marriage was the top vote-getter as the number 3 issue on people’s lists, but was seventh as a choice for number one contender and a distant third as a second place issue. Whether people are begrudgingly accepting same-sex unions due to isolated votes and ill-considered judicial decisions overturning the expressed will of the people or see it more as a religious liberty issue based on the experiences of those who object is an open question, though.

The other open question is just how much this voting bloc will take in terms of being ignored. There is a bloc of the Republican Party which says that social issues are to be avoided because it alienates another, supposedly larger group of moderate voters. Needless to say, Democrats exploit this as well – the Maryland gubernatorial race is a good example.

Even the Baltimore Sun concedes that “(p)ortraying Larry Hogan as a hard-core right-wing Republican is part of Brown’s strategy.” This despite Hogan’s insistence that Maryland settled the abortion issue 22 years ago in a referendum, just as they decided same-sex unions in 2012. To believe the other side, these votes were overwhelming mandates; in the 1992 case they have a point but not so much the same-sex unions one which passed by less than 5% on the strength of a heavy Montgomery County vote (just six counties voted yes, but it was enough.)

Yet I believe the abortion balloting is open to question because attitudes about abortion have changed. According to Gallup, the early 1990s were the nadir for the pro-life movement so perhaps the question isn’t the third rail political consultants seem to believe. To be perfectly honest, while there’s no question where I stood on the more recent Question 6 regarding same-sex unions I would have likely been more neutral on the 1992 version at the time because in my younger days I leaned more to the pro-choice side. I didn’t really become pro-life until I thought through the ramification of the right to life for the unborn and how it trumped the mother’s so-called right to privacy. Exceptions for rape and incest I could buy – although I would strongly prefer the child be carried to term and given to a loving adoptive family – but not unfettered baby murder just as a method of birth control. Now I’m firmly on the pro-life side.

So when Larry Hogan makes these statements about how certain items are off-limits because at some past point voters have spoken doesn’t make those who have faith-based core beliefs overly confident in a Hogan administration as an alternative to Anthony Brown. They may hold their nose and vote for Hogan, but they won’t be the people who are necessary cogs in a campaign as volunteers and financial contributors.

On the other hand, there is a better possibility we could see action on these fronts with the federal government, even if it’s only in terms of selecting a Supreme Court that overturns Roe v. Wade (placing the matter with the states where it belongs) and understands there is a legitimate religious objection to same-sex nuptials and funding abortions via health insurance as mandated by Obamacare.

We’ve been told for years that conservatives can’t win if they stress social issues. But on the federal level I’ve noticed that even when Republicans haven’t been addressing the social side we have lost, so why not motivate a set of voters which serves as the backbone of America?

The exodus – will it increase?

It’s funny – I was at a bit of a loss to find something to write about today when Kim and I received a letter in the mail from a friend of hers. In it was the note which said “Miss you but I love Florida!” The friend in question moved down there a year ago to take a job in her industry.

Admittedly, there is a lot to love about Florida in terms of weather. The one year I spent Christmas down there I was sitting on my parents’ porch in shorts because it was 80 degrees out. That was somewhat of an anomaly for the season, but the fact is the Sunshine State doesn’t see a whole lot of snow and cold. Florida in 2014 is sort of like southern California in 1964, as millions moved there for the perpetually sunny and nice weather as well as the chance to create opportunity for themselves.

That got me to thinking about how many people I know have left this area, many for Florida or the Carolinas. Sometimes to me it’s a wonder that people stay around here given the broad litany of complaints people make about the region. On the surface I think it has many of the same qualities which attracted me in the first place – although last winter’s snow and cold made me think I was back in Ohio again.

But there is an economic side, and that factor has influenced the decision of many who have left the state to go to areas where taxes are lower and business opportunities more plentiful. Job creation hasn’t seemed to be job one for those in charge of the state because we’ve lost jobs while other states have picked up the pace.

Over the last few days I’ve talked quite a bit about the state’s budget shortfall, particularly in terms of what it means for the governor’s race. Sadly, I would estimate there are probably 20,000 Hogan votes that have left the state during this last cycle because they couldn’t hang on any longer or found better opportunities. On the other hand, ask yourself: if you lived in another state, what would you move to Maryland to do? About the only answer I could come up with was be in government, whether for Uncle Sam or a local branch office thereof. Even those who like the region seem to be moving to Sussex County, Delaware – it grew at a faster pace than the state of Delaware as a whole over the last three years while all nine Eastern Shore counties were short of Maryland’s (slower) overall growth rate, with three counties of the nine declining in population. A lack of local good-paying jobs is a complaint we’ve heard here for years.

I think the fear among many in my circle of friends – many of whom were raised here and care deeply about the state – is that another four to eight years under the same sort of governance will seal the state’s doom, much like the economic basket case that is California. That was a state which had all sorts of advantages in terms of attracting families but has squandered many of them away through their treatment of job creators. Like Maryland, it’s a state that seems attractive on the surface but living there is another thing, from what I’m told. (I’ve never visited the state, so it’s all second-hand knowledge on this one.)

Electing Larry Hogan could be the start of a comeback, but the problem isn’t just something which can be solved by a single chief executive. Rooting out the entirety of the issue would take a generation of conservative leadership with a General Assembly re-purposed to solving problems rather than protecting turf or enacting worthless feelgood legislation. But if nothing, not even the first step, is done this time, the exodus is sure to continue and increase.

The Hogan side of Franchot’s assessment

After yesterday’s lengthy post about Peter Franchot’s assessment of the state economy, I wondered how the Republican running for the state’s top job would react. Fortunately, I can distill his statement down to a couple short paragraphs:

(Wednesday’s) report is utterly devastating and confirms what we have been saying, that Martin O’Malley and Anthony Brown have taxed and spent our economy into the ground. Overtaxed Marylanders are earning less, small business profits are disappearing and people have less to spend on goods and services.

As governor, I’ll put partisan politics aside and work across the aisle to undo the damage of the past eight years. We’ll work together to reign in reckless spending and waste so we can roll back as many of the O’Malley and Brown’s 40 straight tax hikes as possible. It’s time for Annapolis to live within its means so people can keep more of their hard earned money.

I was fine with that until the part about “work together,” particularly with regard to an event last week with New Jersey Governor Chris Christie:

The Democrats want to tell you that Governor Christie and I are far-right extremists. Our similarities stem from the fact that we are commonsense Republicans that are prepared to reach across the aisle in order for progress and prosperity. That is why Governor Christie was overwhelmingly reelected in the blue state of New Jersey to a second term. And that is why Marylanders are ready for a Republican governor in Annapolis.

Unfortunately in this partisan day and age, for a Republican reaching across the aisle means getting your arm bit off and used as a club to beat you with. Remember, the reason for Christie’s initial popularity was his get-tough stance with the state’s unions, and I honestly don’t see those sort of stones with Larry Hogan.

It’s obvious we have a problem in this state, as Franchot pointed out. But the problem isn’t just in the governor’s office, it’s in the bowels of the General Assembly as well.

Remember the “doomsday budget” session of a couple years ago, and the big deal many in the General Assembly made that spending “only” went up $700 million instead of the $1.2 billion they eventually received? Imagine that fight every year.

Depending on how many Democrats are returned to Annapolis, the budget that Governor Hogan would send out might only get 50 or 60 House votes, so the overriding question is what tradeoffs will we have to endure? Or will Hogan surprise me and take the bully pulpit, going over the heads of the General Assembly and the press to convince the people to demand action on a leaner budget? We know the unions wouldn’t take cuts lying down, so are those on the side of sanity going to go to Annapolis and tell Big Labor to pound sand when they mass in protest like they did a few years back? Fifty isn’t much against 5,000 and their box lunches.

(By the way, I should point out the link above was one of the posts where I lost all my pictures when Photoshop folded into Adobe Revel and rendered all my photo links obsolete. I spent a good half-hour fixing it for presentation last night because it was important to convey the sort of protest Larry Hogan can expect if he stands his ground.)

I certainly hope Larry wins and comes out with budgets which reflect sanity and not just a 4-6 percent increase each year. But be warned it won’t come without a fight. And we can live with Larry’s middle-of-the-road, reach-across-the-aisle tendencies if we can get some conservatives to Annapolis to keep him in line, with the rest of us having his back when he makes those promised cuts.

A dose of economic reality

Bear in mind the following words are written by a Democrat in Maryland. It’s an extremely long blockquote of an entire release but I thought readers deserved full context.

We convene today to write down our already cautious revenue projections for Fiscal Years 2015 and 2016 by more than $405 million. Far more important than what a $405 million shortfall means for the state budget is the painful reality that it indicates for the budgets of Maryland families and small businesses.

We’re writing down individual income tax receipts – the largest individual source of state revenue – by over $350 million, between the shortfall in individual income tax receipts carried over from Fiscal 2014 and our write down of expected revenues for Fiscal Year 2015.  Six years removed from the economic collapse, and far too many families and small businesses are still waiting for the recovery they keep hearing about.

We can classify a year or two outside the ordinary as simply abnormal. But more than a half decade later, we need to accept that sluggish growth and challenging economic conditions have become our new normal. It feels like we sit at these meetings every quarter, hopeful and determined that ‘next year will be the year’ when the recovery takes hold and is felt broadly throughout the economy. Yet, another year has passed, and ordinary families and small businesses haven’t even recovered to where they were before the financial collapse, much less made up for the wages they’ve lost over the past six years. We need to recognize that hope is not an economic strategy.

The same challenging conditions I’ve discussed in past meetings haven’t substantively improved. Wages and salaries are essentially stagnant. Local, independent businesses are struggling to meet payroll, cover their costs and turn a profit. Working families have cut back their spending because they just don’t have the money, they’re scared of losing their jobs, or, in many cases, both.

In a consumer-driven economy, it should come as no surprise that when consumers are struggling, businesses inevitably feel that pain, particularly in an environment where margins have often already been trimmed down to the bone. Add that to Maryland’s unemployment rate – traditionally a major strength – not keeping pace with improvements seen in the country as a whole.

Maryland’s 6.4 percent unemployment rate is higher than the national rate of 6.1 percent – something we’ve only experienced twice in the past three and a half decades – during the tech boom of the late 1990s and the 1980 recession. In terms of wages – the oxygen working families need to survive – Maryland’s average wage growth was just 0.4 percent in the first quarter of 2014, far below the rate of inflation for the same period.

Essentially, workers perceive that their take-home pay is headed in the wrong direction and the purchasing power for Maryland families is, in reality, diminishing. The housing market has failed to rebound in a sustained and meaningful way, particularly with Maryland second worst in the nation in home foreclosure rates.

Combined, these economic indicators led to a Maryland economy that didn’t grow at all last year – with a 0 percent GDP growth for 2013. As we know, an economy that isn’t growing is actually retracting. This all means uncertainty for families and businesses. They are unsure about their prospects and, as a result, unwilling to make the purchases and investments our consumer-driven economy needs to grow. As great a state as we are and as robust an economic system as we have, uncertainty serves as a serious deterrent to economic growth.

Whether it’s sequestration, unpredictability in the tax and regulatory environment or an inability to make long-term federal budgeting decisions, most of the uncertainty is based on political problems and decisions, as opposed to global economic conditions. While the federal government has always been and certainly remains a major economic advantage, our over reliance on the public sector carries significant risks. We can embrace our proximity to Washington as a strength without depending on it as our sole basis for economic stability.

We simply can’t assume that we’re around the corner from returning to the way it was, and back to the decisions we could afford to make in Maryland as a result. The fact remains that we’ll only see the economic growth we’re accustomed to when we get the private sector economy growing. We can only make that happen if we provide a sense of predictability for Maryland families and small businesses.

As state policymakers, we need to be smart in how we spend taxpayer dollars, recognizing that to invest in the things we need, we have to forego many of the things we simply want. We have to be more forward-looking about how we borrow money as a state.  We simply can’t sustain our current patterns of debt accumulation without provoking actions that could do further harm to an already fragile economy — amplifying the significant fiscal and economic challenges we already face.

As we all know, a sustained economic recovery is going to come down to jobs, both here in Maryland and throughout the nation. As long as we see continued weakness in wages and job growth, consumers will inevitably pull back, causing businesses to struggle and the economy to underperform.

We simply cannot create any unnecessary road blocks that would make employers reluctant to invest, grow and hire. But if we maintain a cautious mindset and provide a sense of predictability to Maryland families and small businesses, our economic bones are strong enough and our people are resilient enough to withstand this write down and the economic challenges it represents. (All emphasis mine.)

That’s the entirety of a press release put out by state Comptroller Peter Franchot as the Board of Revenue Estimates calculated our state would yet again be short on revenues to the tune of $405 million, or slightly over 1% of the current budget.

But let’s read between the lines, in the passages I highlighted.

(W)e need to accept that sluggish growth and challenging economic conditions have become our new normal.

No we don’t. What we need to do is realize our policy prescriptions over the last eight years or so have done little to help the local economy. States are succeeding in this country, whether it’s through ambitious exploitation of energy resources like North Dakota or smart, pro-business policy such as the sort Texas seems to use. (Heck, Rick Perry even encouraged Maryland businesses to relocate to his state.) To attain growth, it has to be encouraged and the only thing we’re encouraging the growth of in this state is government.

The same challenging conditions I’ve discussed in past meetings haven’t substantively improved. 

Peter Franchot became Comptroller in the same 2006 election we elected Martin O’Malley as governor. Perhaps that should give an indication as to why these conditions persist.

Essentially, workers perceive that their take-home pay is headed in the wrong direction and the purchasing power for Maryland families is, in reality, diminishing.

This is reflective of national conditions, since real household income has declined since reaching a peak anywhere from 7 to 15 years ago, depending on income quintile. And with wage-earners having to string together a series of part-time jobs to make ends meet thanks to the impact of Obamacare and a higher cost of living, the budgets of Maryland families are indeed stretched to the breaking point.

(M)ost of the (economic) uncertainty is based on political problems and decisions, as opposed to global economic conditions.

Families continue to wait for the other shoe to drop. Spend over $100 million on a botched website? Don’t worry, we’ll make up the shortfall by figuring out some new revenue stream. This is the state that experimented with the “tech” tax some years ago before the computer business threatened to bolt, so they decided to tax millionaires instead – and watched many move out of state. Even taxing rain to supposedly help clean up Chesapeake Bay has become a boondoggle as different counties decided on different approaches, while a select few counties (including Wicomico) figure they are next on the firing line to be stuck with the “rain tax” like 10 other Maryland counties.

While the federal government has always been and certainly remains a major economic advantage, our over reliance on the public sector carries significant risks. We can embrace our proximity to Washington as a strength without depending on it as our sole basis for economic stability.

This is a very prescient statement, but Franchot is only looking at it in terms of tax revenue from federal workers. Surely he’s less inclined to speak out about the fact that it’s actually Uncle Sam – not income tax receipts – that is the largest source of state revenue. I know the unsuccessful campaign of Charles Lollar made overtures about slaying that beast, but it’s just as bad to be dependent on the federal government for operating revenue as it is to make it as much as a significant economic driver as it tends to be for the Capital region. Meanwhile, jobs which create real value – whether it’s extracting natural gas in Garrett County, making steel in Baltimore, or growing chickens on a rural Somerset County farm – get short shrift from an administration which has tried to thwart that sort of growth at every turn.

Whether Peter Franchot wants to admit it or not, the damning economic statement made by a Comptroller who still endorsed the candidate who most represents this failed status quo in Anthony Brown makes the case that a new broom needs to sweep Maryland politics clean. If you haven’t heard about GOP candidate for Comptroller William Campbell, it’s time you did.

And Anthony Brown? I’m sure he knows that Franchot is pretty much correct in this assessment, which is why he’s trying to paint Larry Hogan as a Republican extremist (there is no such thing) and not talk about his own accomplishments or plans. “More of the same” just won’t sell for a large number of Maryland’s working families.

Another prediction of job creation

In the post I recently did about wind power, I pointed out that beginning in 2017 Maryland electric ratepayers will begin a 20-year process of chipping in $1.7 billion in subsidies to the developer of an offshore wind farm off the Ocean City or Assateague coast. Yet a new study claims that Maryland could reap far greater economic benefits over the next two decades if offshore drilling is allowed in the region, with even larger payoffs for Virginia and the Carolinas by virtue of their longer coastlines. Nearly as important are the thousands of jobs which could be created – something wind energy producers can’t match.

There’s no doubt that these rosy scenarios presented by Dr. Timothy J. Considine of the University of Wyoming and the Interstate Policy Alliance (which includes the Maryland Public Policy Institute) were made up to encourage the loosening of restrictions on offshore drilling. Yet they also take into account the cost of environmental factors in a reasonable way, which balances the picture. It turns out that Maryland is one of the better cost/benefit performers of the six states (Delaware, Georgia, Maryland, North Carolina, South Carolina, and Virginia) included in the study.

It also goes without saying that our Senate representatives are foolishly dead-set against the idea, signing onto an August letter which claimed detrimental effects on tourism in the highly unlikely event of an oil spill. (A few Maryland House members signed a similar letter.) While tourism is a good thing and we’d like to encourage more of it, the value which could be added to our economy from oil and natural gas is far greater.

At this early stage, the next move seems to be simply testing to update decades-old mapping which suggests there’s a potential for millions of barrels of oil offshore. Any actual drilling is probably years and several court battles away, as it’s almost a guarantee that Radical Green will throw the legal kitchen sink at any attempt to drill for oil in the Atlantic. May I kindly suggest they go pound sand.

But if they insist on building wind turbines offshore, it should be noted that oil rigs and wind turbines can coexist and once the oil is tapped out the platforms can be put to good use. These uses don’t have to be mutually exclusive, but in terms of current economics it’s difficult to match the high subsidies required to get companies to even consider offshore wind when compared to the clamor of energy producers to see just what’s underneath all that Atlantic coastline. If Larry Hogan really wants the “all of the above” energy approach, he should embrace the prospect of offshore oil exploration.

Twisting in the wind

No, I’m not talking about a political figure today. Instead, I received an e-mail from the American Wind Energy Association telling me about the state of the wind industry and how its costs are falling rapidly. (This blog post at Into the Wind, the AWEA blog site, has the same information.)

If you look at points 1 through 4, they make varying amounts of sense. With the maturation of the market, it’s no stretch to assume that costs would go down just as they would for any technology. Personally, though, I disagree with the premise that additional carbon emissions are necessarily bad, particularly when the idea is to blame them for climate change. Nearly two decades of steady temperatures combined with the increasing emissions seem to me a fairly good testament that increasing emissions aren’t the problem.

It’s point number 5 that’s the payoff for me, because I knew it would be coming sooner or later.

5. Policy support is still essential for the U.S. to keep scaling up renewable energy

The Lazard study also highlights the need for clear, long-term policy support for renewable energy. While projects located at some of the best wind resources in the country are now cost-competitive, it notes that this is still not the case in most regions. The most recent expiration of the Production Tax Credit (PTC) resulted in a 92% drop in new wind projects from 2012 to 2013.

The PTC helps correct for flaws in our electricity market design that do not value wind’s benefits for protecting the environment and consumers. Wind energy creates billions of dollars in economic value by drastically reducing pollution that harms public health and the environment, but wind energy does not get paid for that even though consumers bear many of those costs.

Wind energy also protects consumers from price increases for fuel, but that is not accounted for in the highly regulated electricity market because other energy sources get to pass their fuel price increases directly on to consumers who have little choice in the matter.

Policies like the PTC correct for those market failures to reach a more efficient market outcome. The PTC has expired, however, for any project not started by the end of last year. An extension is now urgent to avoid shutting down the U.S. manufacturing base, and to ensure that more wind farms are built so that more consumers can benefit from these record low prices.

Yet what if the lack of subsidy isn’t a market failure as they describe? In the original blog post there’s a graphic which shows that every time the tax subsidy is cut, the amount of wind capacity installed plummets. Between that subsidy and the various renewable portfolio standards enacted by many states (including Maryland) it seems to me they artificially prop up the wind energy market, which can’t stand on its own otherwise. This approach is the same argument which posits a carbon tax is necessary because fossil fuel users aren’t paying for the supposed destruction of the environment and public health they create, but discounts the increased standard of living brought on by the usage of reliable sources of electricity to, among other things, improve public health.

Another thing worth pointing out about these studies and reports is that they look strictly at land-based wind turbines. While they are falling in price, researchers around the world are finding that residents nearby are complaining about a litany of health issues derived from the constant noise. Naturally, naysayers would contend that other methods of power generation, such as fracking, also have ill effects but these are anecdotal as well.

So while offshore wind would seem to be a solution, the cost is far more prohibitive. Maryland’s 2013 offshore wind bill, for example, subsidizes the effort through both an increase in the required renewable energy portfolio and $1.7 billion in direct subsidy over 20 years, parceled out as an $18 annual surcharge to residential consumers and a 1.5% hike for businesses. (A business paying $1,000 a month, such as a restaurant, would have to add $180 a year.) Naturally this doesn’t take into account the penchant for our General Assembly, once a new tax or surcharge is enacted, to declare it’s not enough and raise the tariff accordingly. I give it no more than 5 years before someone demands to raise the fee to $30 or $40 annually and hike commercial users up to a 2% or 3% a month surcharge just to keep the business in Maryland’s waters.

It would seem that wind power is a logical way to create electricity in certain locations and situations, but for general use it has the drawback of not being as strictly reliable as fossil fuels are. The fact that we have to create a renewable energy portfolio tells me that the market has otherwise spoken.

We really haven’t heard about this as an issue for the 2014 election, but I would presume the Brown administration would continue on this path as they promise to:

Expand our renewable mix with investments in (read: subsidies for) Maryland-based solar and wind, which can both create new jobs and reduce air pollution that affects the health of everyday Marylanders.

It would be my hope that Larry Hogan would revisit this effort, backing legislation to eliminate this expensive renewable energy portfolio and repealing the prospect of higher electricity rates come 2017 – at the very least, recast this scheme as an opt-in program just like consumer choice has already created with companies like Ethical Electric, which I wrote about last year. Let the market decide how much it wants to support the renewable energy boondoggle, and how many of us simply crave the reliability of knowing that when we flip the switch, the light will turn on.

Is Hogan returning to earth?

There’s some concern in Larry Hogan’s campaign about a New York Times/CBS News/YouGov Battleground Tracker Poll showing Hogan again trails Anthony Brown by double digits, particularly after a Republican pollster showed Hogan trailing by just three points last month. This outfit’s July poll of over 1,400 registered voters showed Brown on top by 13 points in July, and is computed in the Real Clear Politics average.

The Republican’s campaign contends the poll is “so flawed and so misleading that Politico hammered the New York Times for lending their name to this internet survey.” YouGov’s methods are different than most pollsters, as they conduct their surveys among an audience which opts into the poll via the internet, then weighs the results among demographics. The overall survey even solicits new customers, requesting people to “Join YouGov today to take part in surveys like these and earn money…”

Maryland’s race is also interesting because of the relative lack of responses compared to other states. Out of 35 states surveyed, Maryland only beats 12 states in terms of participation. Most of the states Maryland beats are fairly rural and sparsely populated: Alabama, Hawaii, Idaho, Kansas, Nebraska, Oklahoma, Rhode Island, South Carolina, South Dakota, Tennessee, Vermont, and Wyoming. It’s not a tremendously representative sample.

Nor is it necessarily reflective of the Maryland electorate. The unweighted sample actually has independents well over their voting strength at 29%, with Democrats comprising 45% and Republicans only 25%. (It’s actually close on the GOP.) But weighting the sample as YouGov does places the Democrats at 52%, independents at 26%, and Republicans at only 22%. In reality, according to the latest voter registration figures, Democrats have 55% share, Republicans 25.7%, and independents just 19.3%. So both major parties are undersampled by about 3% apiece.

Polling is all about turnout. While the YouGov survey claims these are “likely voters,” in reality those not affiliated with a party are the least likely to turn out for a gubernatorial election. Yet when I reset their polling numbers to a very likely turnout model (that of the 2010 election, which was a muted TEA Party wave election in the state) and distribute the “not sure” voters in the same proportion as those who have decided, I come out with this possible result:

  • Brown 57.5%, Hogan 40.2%, other 2.3%

I think the reason this turns out the way it does is that the YouGov sample has Brown winning Democrats at roughly the same rate Hogan wins GOP voters. In a lot of ways the YouGov poll is almost a worst-case scenario for Hogan, who needs to both boost turnout for his side to levels last seen in 2002, when almost 68% of Republicans and over 45% of independents came out to vote – in 2010 those numbers were about five points lower – and get far more than the 6% of Democrats the YouGov poll has voting for him. If Anthony Brown can convince Democrat voters to stay loyal to the nominee, the game is over, and that’s why Brown’s going negative.

In fact, Hogan’s campaign added that:

If the MD Democratic Party – with their two-to-one registration advantage over Republicans – honestly thought Brown was ahead, they wouldn’t need O’Malley’s Democratic Governors Association to spend $750,000 in special interest money on attack ads to bail out his campaign.

So I think the reality is somewhere between the 14 points this poll has Brown leading by and the 3 points Hogan claims he is behind. It just proves there’s a lot of work to do in explaining the real record of Anthony Brown and the damage his policies would do to Maryland if he’s elected.

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    First District - Congress

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    Bill Tilghman (D)

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    Maryland General Assembly (local)

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    Addie Eckardt (R)
    Chris Robinson (D)

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    House District 37B

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    Johnny Mautz (R)
    Rodney Benjamin (D)
    Keasha Haythe (D)

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    Mike McDermott (R)

    Jim Mathias (D)

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    Charles Otto (R)
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    Carl Anderton, Jr. (R)

    Norm Conway (D)

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    Mary Beth Carozza. (R)

    Judy Davis (D)

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    Rick Pollitt (D)

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    Laura Mitchell (D)

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    Josh Hastings (D)