The tax man cometh

I was perusing a LOT of e-mail today because I had a short night and long day, and among the items I found was from this Rasmussen survey:

A new Rasmussen Reports national telephone survey conducted over the past weekend finds that 75% of American Adults have filed their income taxes, while another 13% expect to do so by today’s deadline. Five percent (5%) plan to get an extension.

Since I did the taxes for both Kim and I over the weekend, I think I qualified in that 75 percent category. (Surprisingly, I didn’t get screwed but probably screwed myself by giving an interest-free loan to Uncle Sam.) But what I can’t figure out is the 8 percent who are unaccounted for – are those the people who pay estimated tax? Or, were these the people who don’t earn enough to have to file? Way back when I was in college I had that situation, only filing because I wanted the money from my backup withholding back. It may have only been $50 or $100, but it was my money. Otherwise, if 8 out of 100 aren’t filing, that seems like a whole lot of civil disobedience.

Yet while April 15 is the day of infamy when we pay our tribute to the Internal Revenue Service, the real day we’re relieved from this annual burden falls on April 28. That’s the day those of us working in the Free State since January 1 finally pay our debt to the federal and state governments, according to the Tax Foundation. (Those of you reading across the line in Delaware are relieved a little earlier, this Friday the 18th as a matter of fact. Go out and tip a 16 Mile or Dogfish Head to celebrate.) Meanwhile, the state where Anthony Brown was endorsed to lead doesn’t have Tax Freedom until May 9, so he would feel right at home there in Connecticut.

Naturally, the whole idea of filing a return is one of aligning what the government thinks you should owe (and takes out of your paycheck) with the actual amount due after all the calculations are done. They don’t really mind sending your money back – or adding a little extra to that amount if you qualify for the earned income credit – but heaven help you if you owe them more than a few hundred dollars. They’ll have the audacity to penalize you even more money then! Unfortunately, that doesn’t work both ways, but most people believe they’ve pulled one over on the feds if they get a few thousand dollars back. $5,000 looks great as a lump sum, but if people were smart they’d work it in such a way they get the extra $100 a week. (That’s not always possible, though – again, the government sets the withholding rules and I’m sure they’re not doing it for us to accrue a benefit.)

Many of us live our lives in order to avoid paying taxes one way or another. But wouldn’t be easier if the nation did what several states have already done and decided to live without an income tax? I think the FairTax is a pretty good idea myself and talk about it always peaks this time of year. While nothing can be done about until 2017, why not lay the groundwork for doing something more than talk?

Back to that three letter word: J-O-B-S

I still like picking on Joe Biden. But over the last month or so I’ve collected a lot of divergent information on policy suggestions, each of which promses to be the magic elixir to get our economy moving in the right direction again.

I think the key to this lies in two areas: manufacturing and energy. In that respect, I keep a lot of information handy to discuss in this space, with a group called the Alliance for American Manufacturing (AAM) generally representing the left-of-center, pro-union side. And while their main goal seems to be increasing the coffers of Big Labor, luckily most workers still have free will – ask the employees at the Tennessee Volkswagen plant about how much effort from the UAW can be rebuffed in a simple up-or-down vote.

Currency manipulation is one area in which the AAM has been focusing. A study they cite, by the liberal Economic Policy Institute (EPI), makes the case that:

Many of the new jobs (if the subject is addressed) would be in manufacturing, a sector devastated by rising trade deficits over the past 15 years. Rising trade deficits are to blame for most of the 5.7 million U.S. manufacturing jobs (nearly a third of manufacturing employment) lost since April 1998. Although half a million manufacturing jobs have been added since 2009, a full manufacturing recovery requires greatly increasing exports, which support domestic job creation, relative to imports, which eliminate domestic jobs.

Personally I disagree with the premise that rising trade deficits can be blamed for the job losses; instead, I think an absurdly high corporate tax rate and onerous regulations have contributed more to chasing away American manufacturing. (While many simply blame “outsourcing” for the problem, fewer understand the dynamics which led to the outsourcing.) Yet there is merit to the idea that all sides should be competing on as level of a playing field as possible when it comes to the means of exchange, and China is one of the worst offenders. (And why not? They are communists, after all, and you can’t trust communists any farther than you can throw them.)

Two of EPI’s findings are quite interesting: first, should the EPI model come to its fruition, the oil and gas industry would be the hardest hit, and second, Maryland would be among the states least impacted, with barely a 1% rise in employment.

Yet AAM president Scott Paul is quick to blame Barack Obama:

President Obama promised to hold China accountable. He hasn’t. The White House last month said President Obama would use his pen and his phone to make progress on economic issues. He could start today by signing an order to designate China as a currency manipulator.  Then, he could call the Chinese leadership to demand an end to that practice, and secure an agreement on a plan to cut this deficit in half over the next three years.

I sort of wish Mr. Paul would also figure out the other problems, but he is correct to be concerned about our Chinese policy. Job creation has become more important than deficit reduction in the minds of Americans, both in the AAM poll I cited above and a Pew Research Poll cited by the American Petroleum Institute (API).

And the industry which benefits from API’s efforts represents another piece of the puzzle which we can take advantage of: our abundant energy supplies. While America uses 26 trillion cubic feet of natural gas per year, there is the possibility of as much as 10,000 trillion cubic feet within our land mass. That’s nearly 4 centuries worth, so I don’t think we will run out anytime soon. (Estimates have continued on an upward path as new technology makes previously unworkable plays economically viable.) As I keep saying, it’s too bad we don’t have a nice shale play under our little sandbar. Not only that, but the infrastructure we will need to take advantage of all that (and help curtail spot shortages like the ones we’re having this chilly winter) would be a guaranteed job creator – one which derives its basis from the private sector. New pipelines aren’t just for export facilities like Cove Point, but could benefit this area and perhaps bring more natural gas service to our region.

Unfortunately, Maryland isn’t poised to take advatange of either the manufacturing or energy booms at present, thanks to back-breaking economic policy and a foolhardy go-slow approach on fracking. It takes a strident opponent of the latter to suggest yet another approach which will do damage to the former, but gubernatorial candidate Heather Mizeur accomplishes this with the tired old combined reporting proposal. Hers comes with a twist, though, which she announced last Monday:

In the morning, Mizeur will host several Maryland business owners for a Small Business Roundtable. They will discuss her legislation to provide tax relief to small business owners, as well as other highlights from the campaign’s ten-point plan for jobs and the economy, which was released last fall. She will also hear from the business owners on a range of other concerns.

(snip)

At 1:00 pm, several business owners will join Mizeur in front of Ways and Means to testify on behalf of legislation that would enact combined reporting and distribute the estimated $197 million to small businesses for personal property tax rebates.

It’s the liberal way of picking winners and losers. And according to a 2008 study by the Council on State Taxation – admittedly, an opponent of the practice:

Combined reporting has uncertain effects on a state’s revenues, making it very difficult to predict the revenue effect of adopting combined reporting.

Even proponents don’t address that aspect, instead emphasizing how it would “level the playing field between multistate corporations and locally based companies.” But since Mizeur’s idea is one which would subsidize some businesses under a certain employment plateau, the uncertainty would likely be just another reason to avoid Maryland.

On the other hand, a Republican like Larry Hogan at least gets businesses together to discuss what they really want. Granted, once he gets them together he speaks in broad concepts rather than a more specific plan, but at least he’s listening to the right people. None of the others in the GOP field have specific plans, either, although Ron George probably comes the closest.

One has to ask what states which are succeeding economically are doing to attract new business. The state with the lowest unemployment rate, North Dakota, is prospering – more like crushing the rest of the field – on account of abundant energy resources, and perhaps that success is pulling surrounding states up with it. Its three neighbors (Montana, South Dakota, and Minnesota) all rest within the top 13 when it comes to low unemployment rates and other regional states like second-place Nebraska, Iowa, Wyoming, and Kansas lie within the top 10. Although the top five are right-to-work states, half the bottom 10 are as well. Nor can tax climate be seen as a dominating factor since the top 10 in unemployment vary widely in that category: Wyoming, South Dakota, Utah, and Montana are indeed excellent in that aspect, but North Dakota is decidedly more pedestrian and Iowa, Vermont, and Minnesota are among the worst.

But Maryland has the tendency to depend too much on the federal government as an economic driver. This presents a problem because bureaucrats don’t really produce anything – they skim off the top of others’ labor but don’t add value. Certainly it’s great for those who live around the Beltway, and it’s telling that all three of the Democratic candidates have a connection to the two Maryland counties which border the District of Columbia while none of the Republicans save Larry Hogan do.

In order to create jobs, I think the state needs to diversify its economy, weaning itself off the government teat and encouraging manufacturing and energy exploration. Meanwhile, there’s also a need to rightsize regulation and restore a balance between development and Chesapeake Bay cleanup – specifically by placing a five-year moratorium on new environmental restrictions while cleaning up the sediment behind the Conowingo Dam. Let’s give that which we’ve already done a chance to work and other states a chance to catch up.

The best route out of government dependence is a job. Unfortunately, when the aim of the dominant political party in the state is one of creating as many dependents as possible, a lot of good entrepreneurs will be shown the door. It’s time to welcome them in with open arms.

Disappearing dollars

Over the last few years, Delegates Susan Aumann and Kathy Szeliga have generally tag-teamed on announcements and updates for their respective districts, which makes sense because they’re representing adjacent areas of Baltimore County.

But recently they did a video which sort of represents the last seven years in Maryland.

No, it’s certainly not the most slickly produced video but I thought it got the point across relatively well – through a little here and a little there, the state is nickel-and-diming us into the poorhouse in the name of wealth redistribution. What, you thought it was government services?

But the wealth redistribution isn’t necessarily from rich to poor; instead it flows from politically incorrect to politically correct, non-connected to crony, and independent to dependent, with the sole aim on enriching the latter listed groups at the expense of former ones. Those at the bottom of the economic pile have to watch out as people fall into their group from above, because it seems like those standing at the top plateau are sawing off the ladder at a fairly low point and pulling it out of reach to the rest of us.

Government isn’t supposed to be like that. As a matter of rule people aren’t excited about paying taxes, but where they tend to object most is when the benefits seem dubious at best. The rain tax is a perfect example of this: we know property owners will pay it and supposedly it will help clean up Chesapeake Bay, but we have no clue how they’ll get from point A to point B.

That’s why this video seems to work.

Reaction to O’Malley’s last State of the State

Three of those gentlemen who would like to deliver the next State of the State address in 2015 put out remarks in reaction to the current occupant of Government House and what he had to say yesterday afternoon. These are in alphabetical order, by the way, not necessarily in order of preference.

David Craig called the O’Malley era a “sad legacy” in his brief statement, one which focused on the failure to implement the state health insurance exchange but the success he had in implementing higher taxes and fees:

The O’Malley-Brown years leave a sad legacy for those interested in basic government competence, fiscal responsibility and individual freedom.

While Governor O’Malley acknowledged the failure of his Administration and Lt. Gov. Brown to implement Obamacare, there are important facts missing among the many statistics he likes to choose. The Administration has a long way to go on providing transparency on health care including the number of how many consumers are obtaining actual coverage, the number of people dropped from private plans and the total cost.

We have heard for several years now the growing amount of money in so-called ‘cuts’ to the budget, when in fact the budget has grown $10 billion during the O’Malley and Brown terms. Over 70 tax, fee and toll increases are hurting the economy, reducing employment compared to other states in the region and is taking more money for more government.

Similarly, Delegate Ron George attacked O’Malley’s economic record, calling it a “burden on job creation”:

Never has a governor so boldly claimed budget cuts, economic growth and a shrinking executive branch in the face of such clear evidence against. Small businesses have seen their taxes rise tremendously under the O’Malley/Brown administration. Now in 2014, he is burdening job creators with the rain tax, implementation of Obamacare and a forced wage increase.

The O’Malley/Brown administration has seen the relocation of thousands of small businesses and tens of thousands of taxpayers due to a hostile state government. Our mom and pop shops, who employ the majority of our workers, are already struggling to stay open. We must focus on expanding opportunities for entrepreneurs and technical training for our unemployed to protect and grow our middle class for generations to come.

More bluntly, Larry Hogan called O’Malley’s tenure one of “nothing more than lip service” to working Marylanders:

Year after year, this governor has provided nothing more than lip service to hundreds of thousands of hard working Maryland families who look to their governor for leadership. Today was no different. We heard nothing about how the O’Malley-Brown administration plans to turn our economy around, nothing about attracting job creators to Maryland, and no apology to the tens of thousands of Marylanders who have not been able to participate in Maryland’s healthcare exchange.

Instead, what Governor O’Malley delivered today was pure fiction. The Governor continued his perennial claim of spending cuts when the simple fact is the O’Malley-Brown administration has increased spending by 33 percent: from $29.5 billion in their first year to $39.2 billion proposed in their final year.

O’Malley talked a lot about the middle class but, under this administration, the middle class has never felt more pain. The O’Malley-Brown administration paid for their excessive spending on the backs of the middle class. Forty consecutive tax and fee increases – record sales tax increases, the massive gas tax increase, and higher fees on nearly everything – have hit the middle class pocket book the hardest. Their taxes have gone up, their jobs have disappeared, and they now pay more than ever to heat their homes, commute to work, and feed their families.

Marylanders deserve better.

These themes and more were woven into the “official” Republican response, which came this year from Senate Minority Leader David Brinkley.

But all of them – with the exception of Ron George, who briefly touched on a couple ideas he had – did a great job of identifying the problem, yet didn’t pose any possible solutions. Having the longest space in the official response, Brinkley did well speaking to the issue with O’Malley’s signature initiative this year of raising the minimum wage, but what is really needed are some actual business people testifying that if the minimum wage goes up, they’ll have to reduce staff and raise prices to consumers. What’s not generally mentioned is that the process of raising the minimum is envisioned as a multi-step program, as the $10.10 per hour wouldn’t take effect until July 1, 2016. (As the bill is written, the wage would step up in 95-cent annual increments beginning July 1, 2014. However, after that point the intention is to index the minimum to inflation so it would automatically go up each year at a slightly faster pace – the bill rounds it up to the nearest penny.)

The other initiative items O’Malley touched upon in his remarks were “advancing” universal pre-kindergarten across the state and revamping domestic violence laws, both of which also happen to be key platform planks in his lieutenant governor’s campaign. My question on pre-K, though, is twofold: what sort of “investment” are we talking about and is it going to be worth it? Studies of the effects of Head Start on young students show that the advantages gained in such a classroom environment evaporate quickly, at best by the time the child reaches third grade but perhaps even after first grade. But it sure would create a lot of union jobs.

Most disappointing – although I can’t say I’m surprised after seven years of this mismanagement at the state level – are the two most fundamental misunderstandings uttered by our state’s chief executive.

Here’s the first one:

We’ve lost sight of how our economy works when it is working well.

Prosperity doesn’t trickle down from the top.

It never has.

It’s built from the middle out — and from the middle up.

It was O’Malley’s Democratic fellow, President John F. Kennedy, who popularized the phrase “a rising tide lifts all boats.” Using the ocean as an analogy, O’Malley’s argument would seem to be that the ocean rises when the streams which feed it increase their inward flow. Indeed, this is true to some extent, but remember those streams are replenished by the rain which falls from above, as it also does over the ocean.

Obviously there are some people in the world who would be happy with a middle-class existence. But I haven’t seen the lottery yet which succeeded on the promise of $50,000 a year – people aspire to wealth, although obviously with the caveat of not having to do more than purchase a ticket to secure it. The odds are vastly better that someone who works hard to enact his entrepreneurial ideas will become wealthy, dragging many of those who simply aspire to be middle-class upward with him or her through being employed in the enterprise.

Unfortunately, the path to becoming middle-class seems now to be most readily available through government. I have a friend who has been an entrepreneur; unfortunately, his ventures haven’t been as successful as he would like. His new job is with a state agency – yes, the pay is decent but the problem his conscience wrestles with is one of being a taker rather than a creator. There are many fine federal, state, and local government workers out there but all of them share one thing in common: they’re paid by revenues mainly collected from the private sector. The O’Malley legacy is one of absolutely brutalizing the private sector producers, who can’t trickle anything once the state is through with them.

Here’s the second issue – stop me if you’ve heard this one before:

Seven years later, we are not just One Maryland. By many measures, we are Number One Maryland.

And by many other important measures, we are number 24 or 41 or 44 Maryland. But my contention is that the state is not One Maryland, but really at least four: the western panhandle, which combines rugged beauty with the potential to tap significant energy reserves; the I-95 corridor where most people live, a study in contrasts between rich and poor, educated and streetwise, and all shades in between; southern Maryland, which is the quickly evolving bedroom community and playground for those who work in government; and the Eastern Shore, where agriculture and tourism have to co-exist, doing so more or less peacefully. Making decisions for one region tends to adversely affect the other ones.

But I think “One Maryland” to Martin O’Malley is his code to continue the top-down, Annapolis-knows-best leadership style for which his administration has been known. We’ve had the septic bill, the rain tax, educational maintenance of effort requirements, and dozens of other instances where counties serves as little more than lines on a map because their authority is folded under the Annapolis bureaucracy.

I understand the Republicans only had a limited time to respond, but there was so much we left on the table in replying to Martin O’Malley’s message. I’m looking forward to Republicans laying out their plan for Maryland, since I’m confident conservative leadership can really move this state forward.

2014 Maryland dossier: part 10 (fiscal conservatism and taxation)

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.

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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)

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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)

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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)

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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)

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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)

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“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)

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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)

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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)

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“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)

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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)

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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)

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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.

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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.

Clearing the air and getting back to basics

Over the last couple days, a segment of the Maryland Republican Party is scratching its head over the absence of gubernatorial candidate Charles Lollar from several high-profile events: last month’s Andy Harris First District Bull Roast, the Conservative Victory PAC Ken Cuccinelli fundraiser (which was sponsored by several Maryland politicians), the Prince George’s County Lincoln Day Dinner with Lt. Col. Allen West, and most recently the state party’s Oktoberfest gathering in Timonium Saturday night. The conventional wisdom argument is that these were lost opportunities to impress the party brass.

But this may also presuppose Lollar wasn’t out meeting with “regular Joe” voters, and some say a lot of these gatherings would be time better spent knocking on doors or making phone calls. So which is it? I don’t know, but my feeling is that we all need to get back to basics and begin to compare just where each of the three major declared candidates stand on important issues facing the state.

A year and a half before the 2012 Presidential election, I began a process of grading the candidates in the race at the time on a number of issues. I think it’s time to repeat the process, with some different parameters because the issues aren’t always congruent between state and national elections – for example, I don’t have to worry about trade or the Long War but I do have concerns about agricultural issues and necessary changes to the state political system, meanwhile, some issues grow or contract in importance because of recent state developments. But I like the 100-point system so I will adapt it to suit.

So the 2014 monoblogue endorsement will be based on the following formula:

  • Election/campaign finance reform (3 points)
  • Illegal immigration (5 points)
  • Dealing with Obamacare (7 points)
  • Energy policy (8 points)
  • Education (9 points)
  • Second Amendment (11 points)
  • War on Rural Maryland (12 points)
  • Role of government (13 points)
  • Job creation and transportation (14 points)
  • Fiscal conservatism/taxation (15 points)

Once I add or subtract three points for various intangibles of my choosing, I’ll come up with the candidate who I think will best serve Maryland. Granted, my endorsement will only be worth the pixels they’re darkening but at least some thought will be put into why this candidate is the best one for Maryland. (Keep in mind that any of these three would be vastly superior to Anthony Brown, Doug Gansler, Heather Mizeur, or anyone else Democrats put up.) Otherwise, I come in with no preconceived notions with the exception that the other declared GOP candidates in the race don’t have the campaign or the presence to achieve any more than a tiny percentage of the vote so they’re not included; also, this is subject to update if/when Larry Hogan enters the race.

So now that you have the basic concepts, how about some specifics of what I’m getting at for each point? These are questions I may be able to find answers for within the candidates’ own websites, but it’s more likely I need further guidance. I have had the chance to hear all three declared candidates speak on at least two occasions apiece so I might have a decent idea where they’ll go, but it never hurts to ask. With that, here goes:

  • Election/campaign finance reform: Will you aggressively pursue the redistricting revision case in court; if we succeed can we have 141 single-member districts? Where do you stand on current reporting requirements: too tight, too loose, or just right? What about getting after local boards of elections and telling them to clean up their voter rolls?
  • Illegal immigration: Will you take the 287 (g) program used in Frederick County statewide? How about rescinding recent changes to drivers’ license laws in Maryland? And what about in-state tuition – do you revisit this issue? What about withholding a portion of state funds from sanctuary cities? Cooperation with the federal E-Verify program? What about policies allowing status checks such as those in Arizona?
  • Dealing with Obamacare: Do we eliminate the state exchange? Would you pursue a waiver for the state if one becomes available? Are you in favor of defunding or letting the law go into effect and watching it collapse? What steps would you take to encourage more insurance competition in the state? What about returning Medicaid limits to minimum levels?
  • Energy policy: When can we expect fracking to begin in Western Maryland? And what will you do with the renewable portfolio standard? Will you move to re-regulate Maryland’s electrical utilities? Can Martin O’Malley’s offshore wind scheme work? What about offshore oil drilling – is that an option for you? Will you maintain Maryland’s membership in the Regional Greenhouse Gas Initiative?
  • Education: Will Common Core be the law of the land in Maryland, or will you eschew Race to the Top funding? How about school choice, or money following the child regardless of school? How will you protect homeschooling? Instill more local control? What about promoting elected school boards in those counties still without them? Emphasis on vocational education? How do you message against the certain opposition of the teachers’ unions?
  • Second Amendment: Will you work to repeal the so-called Firearms Safety Act? What about concealed carry, and making licenses easier to get? If the federal government gets too onerous, will you fight them? What’s your interpretation of the Second Amendment?
  • War on Rural Maryland: Can we count on you to repeal the Septic Bill and tier mapping? Will nitrogen-removal systems still be required? Will the Hudson family be made whole by the state, since it was with the state’s assistance they were legally harassed? How will you assist the poultry industry in the state and keep them here? What about cleaning up behind the Conowingo Dam and fighting the mandated burden on rural counties, as well as the rain tax on urban ones?
  • Role of Government: Where do you stand on a regulation moratorium, and would you veto new mandates passed through the General Assembly? Are there any agencies you’d work to abolish? What about divestiture of surplus state land? Is a consolidation of primary state government functions in Annapolis on your agenda? Can we count on you to repeal as many laws as you create? Where do you stand on public-private partnerships? Do you support citizen-based petition to referendum for new laws (as opposed to those passed by the General Assembly)? What about the right to recall elected officials?
  • Job creation and transportation: We know you’ll lower the corporate tax rate – what about eliminating it entirely? What about reform of unemployment insurance? What other steps will you take to make it easier to do business in Maryland? As far as infrastructure goes, will you kill the Red Line and Purple Line in favor of more useful means for transporting goods, such as expanding the interstate network in Maryland and surrounding states? Will you hold the line on tolls? What about another Bay crossing – where would you put it? What non-tax code incentives would you offer for rural area job creation? What policies would you adopt from other states?
  • Fiscal conservatism/taxation: Can Marylanders expect a flatter income tax system? How about eliminating it entirely as some states have done? Or would you prefer a sales tax decrease or elimination? Would you agree to a TABOR, or at least a budget utilizing those principles? Can we get per-capita spending closer to the national norm? And how will you deal with the outcry of the press, such as the old “tax cuts for the rich” saw?
  • Intangibles: Positions on abortion, expansion of gambling and/or return to legislative control (as opposed to Constitutional amendment), protection for religious objections to gay marriage, your perception of the TEA Party and pro-liberty movement, and so forth. Mainly social issues.

Yes, that’s a hell of a lot. But somewhere, someone else is asking some of the same questions and if I’m going to make a decision I want it to be informed. And while I’d like to make these issue posts on about a weekly basis, that’s probably a quite aggressive timetable.

But I’m sure that a) people from the respective campaigns read my website, and b) they will bend over backwards for new media. (At least that’s what I’m counting on.) And it’s likely they haven’t even pondered some of these queries, so I don’t expect miracles – but I’ll take them anyhow.

Yet I’m sure that some high-dollar Beltway Republican consultant will tell their candidate that he’d be nuts to get into specifics this far out because all it would provide is fodder for the Democrats and the press (but I repeat myself) to harp upon as the campaign heats up. News flash: they will do that anyway, even if they have to make stuff up (e.g. “a fee is a tax.”) So get it out now and I’ll take those clowns on myself, even as I point out that it’s not like I don’t have a few allies in this fight.

Just let me know you have the balls to stand for something, okay?

The tax-free year?

As an opponent is wont to do, yesterday David Craig released a criticism of the state’s tax-free week program:

Anything that gives Marylanders some tax relief is better than nothing, and it’s a recognition from a stubborn political monopoly about the need to spur the economy, but the need for a so-called ‘tax free week’ raises a broader issue. Why is it just for a week, and why do politicians decide what items qualify?

State government has collected nearly $4 billion since the enactment of a 20% sales tax increase in 2007. That is a lot of back to school clothes, and handing out some extra pocket change for shoes, shirts and pants is a sorry pittance considering this regressive, harmful tax hits working people the hardest.

Considering Craig comes from a county that’s a half-hour drive from a locality which has “tax-free forseeable perpetuity” – and isn’t afraid to trumpet that fact in every advertisement bargain-hungry Marylanders see – he raises the right question. But what is the answer?

According to the state’s latest budget summary, the sales tax raises $4.3 billion a year. So even if it were a “true” tax-free week, we would only lose about $83 million in total. Given the vast limitations on what can be purchased, I would figure the state is “sacrificing” no more than $10 million to tell the voters they care. (On a side note, the sales tax is only 12% of revenue but Uncle Sam is 27 percent, supplying $9.8 billion to prop up Maryland.)

So to me Craig’s question is valid, but I would go further and make the case that the state could do without the sales tax and be just fine. It’s 1/8 of the revenue, but consider the same budget document I refer to notes the difference between FY2012 and FY2014 spending is $3.47 billion. Just cutting the budget to FY2012 levels obviates the need for 3/4 of the sales tax revenue and I’d be pretty confident increased economic activity would cover the rest. Delaware may piss and moan about lost business, but that would be their problem. They still have an easier go of adjusting their casinos to market conditions thanks to our shortsightedness, so there’s always that.

Looking at that Maryland state budget, it’s also worth mentioning that eliminating the corporate income tax entirely would “cost” the state $1.091 billion – an amount almost exactly equal to the difference between the FY2013 and FY 2014 budgets. So maybe the sales tax stays for the interim – and remember, that $4.3 billion will likely go up somewhat because gasoline is now subject to a 1% sales tax, or about 3.5 cents per gallon – but we eliminate the corporate income tax and level-fund the budget. There are all kinds of ways to make the numbers work, with the key idea being maximizing the number of dollars in Marylanders’ wallets, not Annapolis coffers.

Of course, we know the media and Democrats (but I repeat myself) would scream bloody murder; to them I say: we tried it your way, and it’s becoming clear we have an utter failure on our hands. It’s time for the adults to take over again.

50,000 strong – but where does it go?

Last week, in another story sort of buried in the runup to the Tawes event, the fine folks at Change Maryland hit the 50,000 “like” mark on Facebook. (Today it appears they have surpassed 51,000.) It bears recalling that in the spring of 2012 they were just at 12,000 – although I noted at the time their cake was much more optimistic. Perhaps by the spring convention of 2014 that extra zero will come in handy.

It seems the rule of thumb is that their membership grew in year two at a rate twice as fast as it did in Change Maryland’s first year – if this continues they would be in the 115,000 range by this time next year. But is that too optimistic of a goal?

The bread and butter of Change Maryland has been its strident opposition of Martin O’Malley’s numerous tax hikes and pointing out his incompetence at job creation, especially when compared to peer states. But having covered many of those revenue enhancements now – and knowing 2014 is an election year for his anointed successor, Lt. Gov. Anthony Brown – the process of raising taxes may come to a halt. Bear in mind as well that most of O’Malley’s increases are now occurring automatically like clockwork; for example, the sales tax charged on gasoline increases in July during both 2014 and 2015.

A second item affecting Hogan’s organization is a change in personnel. Jim Pettit, who worked with Change Maryland during its run to 50,000, recently joined the campaign of gubernatorial candidate David Craig. Perhaps this is a good time for a transition, knowing that much of the issue advocacy occurs during and immediately after the General Assembly session, but I don’t discount the experience Pettit brought to the table. He’s been replaced by Matt Proud, who has plenty of political experience for a youngster and may bring some youthful enthusiasm to the effort, but will still need a little time to transition into the task.

But what does having 50,000 Facebook followers really mean? Change Maryland explains:

(Change Maryland) has built a dominating presence on social media with more people engaged online than the Maryland Democratic Party, the Maryland Republican Party and all of the potential statewide candidates of either party, added together. Change Maryland’s Facebook page has a total weekly reach of over 341,153 people. No other citizen group in the state has ever accomplished what Change Maryland has, in just over two years.

So they are influencing over 300,000 people of all political stripes with a fiscally conservative message. But will founder Larry Hogan upset the apple cart by making his own bid for Governor? Hogan was coy at Tawes, being quoted in an AP story as noting:

I just think it’s very, very early to be here in the hot, dog days of July the year before the election to be out campaigning. At some point, we might have to take a serious look at it. I don’t think we would do that for quite some time, though.

The way I interpret that is the question of whether Michael Steele jumps into the race later on. None of the others on the GOP side could reasonably be interpreted as Bob Ehrlich loyalists in the way Hogan or Steele would be.

In some respects Hogan is faced with a similar question Newt Gingrich faced in 2008: fresh off the formation of American Solutions, Newt had to decide whether to jump into the presidential race or continue to grow his group. He eventually decided to take a pass on the 2008 race, choosing to maintain his American Solutions leadership role. Conversely, once Newt decided to enter the 2012 presidential race his group withered on the vine.

If Change Maryland becomes interpreted as a campaign entity for Larry Hogan’s gubernatorial bid, its influence would wane. But if Hogan becomes a kingmaker of sorts, using his organization to promote candidates with a fiscally responsible track record in the same manner Sarah Palin lends her hand to certain conservative hopefuls on a national scale (such as Dan Bongino) he could retain his following and influence the 2014 election up and down the line.

There’s no question Maryland needs a change from the liberal philosophy dragging the state down, and Hogan’s group is succeeding in getting out the message. The next step is motivating these disciples to action, and we won’t know the success of that mission until November of 2014.

Ten Question Tuesday – June 11, 2013

As I noted in my original coverage last Wednesday, I received the opportunity to have a one-on-one interview with gubernatorial candidate David Craig after he concluded his public remarks. Rather than ask him strictly about his stump speech, I wanted to ask about some of the topics which may be more important to my fellow Eastern Shore residents.

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monoblogue: Just to ask you the first question, I know we’re the seventh stop or so on this tour…

Craig: Yes.

monoblogue: …so how’s your reception been?

Craig: It’s been very good. Started out good – a little rainy when we started out…

monoblogue: Yes.

Craig: …but good crowds everywhere we’ve been, the people who showed up have been very receptive (and) very happy about what was happening. Very impressive in Hagerstown, we got out there and did the walking tour of downtown and went in to see several businesses, went by the schools…a lot of people saw the bus, they saw me, and they started walking with us. Got a little reception afterward where people could just come in and talk about stuff.

We went to Silver Spring – how many Republicans are going to go to Montgomery County? But we drive through the neighborhoods and I think, “Why are these people voting for Democrats?” These people have their nice little homes, they obviously have nice jobs and stuff like that, paying income taxes

monoblogue: Well, the problem is they may have government jobs that depend on the government being large.

Craig: Well, they may depend on the federal government being large but not us. Anyway, it’s nice neighborhoods and things like that. The one in Prince Frederick was very good, Annapolis was Annapolis (laughs)…that was fun. So they’ve all been very interesting, you see the differences –  everybody says one Maryland, but there are slight differences.

monoblogue: Yeah, well, for example I come from a rural perspective – I grew up in a rural area – and I know you talked in your speech about the lost balance between environmentalism and that. How’s that going to affect our “outhouse” out here?

Craig: (laughs) You tell people that farmers were the first environmentalists that we ever saw. Farmers are usually pretty fiduciary – they usually don’t waste money.

monoblogue: No, they’re trying to make money.

Craig: They’re trying to make money, so they’re not going to do things that are bad. What I’ve found in doing this in Harford County is I do have an executive – I have an Agricultural Economic Advisory Board and I have an Agricultural Preservation Board that I work with, and one of my deputy chiefs of staff is the agricultural deputy chief of staff. What I’ve found is the best way is to actually listen to the farmers have to say and have them come up with solutions for what they think needs to be done, and then convince the other farmer this is the best way to go – it’s not government talking to you. (They’d say) I did this on my farm, it saved me money, it did this and saved me all these rules and regulations.

But we get all these people that are in environmental services, they have this job, they’re lawyers, they’re environmental – but they know nothing. I had a situation talking with the Maryland Department of the Environment, I said give me an example of this rain tax, I have two – or septic tax. I have two farms, tell me which one’s the worst. How will I be able to determine which one – one guy’s doing the good job, one’s a bad job? And the guy looked at me and said we can’t figure that out.

monoblogue: Well, that’s reassuring. After they passed the septic bill and they can’t tell you that? I know there was a bill – and it was one of our Delegates (Mike McDermott) put it up – to rescind that entire septic bill. Now, if it does somehow get through the General Assembly would you consider signing that bill rescinding the law?

Craig: I think there are many things that have been done over the last 20 years that ought to be rescinded, particularly when it comes – what was the one Parris Glendening did? I can’t remember, it was some kind of infectious disease thing…

monoblogue: I don’t know, it was before my time.

Craig: Anyway, they came up with all these ideas – for them it’s always about what’s the headline, what’s the media going to report in the next 90 days – after it gets done, do they ever go back and evaluate what the bill did, and whether it was effective? You know, William Donald Schaefer was the one who put the Critical Areas section in – I was the mayor, I had to adopt Critical Areas legislation in the city of Harve de Grace or no building was going to be permitted. I had to actually impose a tax, I was the first one to pay it because I was the first one to go for a building permit. And they kept saying, we need 1,000 feet from the bay to be doing this. And I would say we’re not the only ones polluting this, you think it’s just us, why are you doing this to us? And does it actually solve things? If I have someone who rebuilds something and fixes it up, isn’t that better than just letting it sit there the way it is? Let’s come up with real solutions for what needs to be done. Did the critical area and the critical area tax solve the Chesapeake Bay problem?

monoblogue: No. And the problem is they keep moving the goalposts…

Craig: Yes! And they’re made up – that’s the thing, the numbers are made up. Who came up with the idea a football field had to be 100 yards? Why couldn’t it be 120 yards, why couldn’t it be 90 yards? You know, it’s like – first they make a number up, I’ll give you this example. I was the mayor of Havre de Grace, we get hit with this issue with our sewage treatment plant that we have to do this change – $9 million it costs us to upgrade the sewage treatment plant.

A week later, the rules and regulations were changed. They came back and said, this is no longer functioning the way we need it to function, now you need to do this – $47 million. Here’s the problem, the analogy I use. Let’s say you decided to redo your kitchen – new refrigerator, new stove, new microwave, you buy new ones, you put them in there, spend $4,000 – and then you come back home, no I think we need to rip the whole kitchen out and you throw away those appliances. None of that $9 million was good enough to maintain the $47 million, so we wasted the $9 million. We’re still paying – the people of Havre de Grace are still paying…

monoblogue: Salisbury has the same problem, they’re messing around with their sewer treatment plant.

Craig: Yeah, so they keep changing the concept of what’s going on, and they don’t really look at real solutions. And if someone comes up with a real solution that’s not what the government wanted, then they ignore it.

**********

At this point, we were interrupted by a well-wisher. When we got back to the conversation, I changed the subject.

**********

monoblogue: You also talked about the – all the tax increases we had. I love how you used all the Change Maryland numbers, that’s great. I said I could tell Jim Pettit’s on his staff now…

Craig: Well, we’ve got them for a variety of things but when Larry Hogan started Change Maryland we talked about it and said, you know, I might run, I might not run, but if I don’t run Change Maryland’s going to go with you. And I’d like to admit that Larry’s done a good job getting that information out…

monoblogue: He does.

Craig: …and persuading people. I think in the long run Larry realizes that he’s making more money (laughs) being a private worker…

monoblogue: Oh yeah.

Craig: …and I think ultimately he stays there. But he can he huge in helping us reform the state party.

monoblogue: Right. 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.

monoblogue: Well, that’s the idea. It’s where YOU want to spend it, not where the state wants to spend it.

Craig: You know, sales tax…I go back to that Calvin Coolidge thing with lowering the income tax, if you lower the sales tax more people would buy stuff here and it increases what gets sold. My wife’s not dumb – we live 17 miles from Delaware. You’re going to buy $4,000 worth of appliances times 6 – you do the math…

monoblogue: And seven miles from Delmar – if you go up 13 you’ll notice all the big-ticket items, furniture stores…

Craig: Yeah, look at the ads, look at the ads. I mean, I was looking at ads this morning on the TV when I was here and it was like – I forget what the particular issue was they were selling, and they go “in Delaware, no tax.” You know, it’s like – and how far away are you? Cecil County last month, in May, had twelve liquor stores give up their licenses…

monoblogue: Yes.

Craig: …and close. And they did it because, if you live in Elkton in five minutes you could be in (Delaware), you can buy your liquor, you can buy your gasoline, you can buy your cigarettes. All that tax is lower or non-existent and we got nothing. And so, I don’t know how many people but say each had three business people – so 36 to 40 jobs gone?

monoblogue: Right.

Craig: And all because “oh, it’s an alcohol tax, it’s okay to raise it.”

monoblogue: And the same thing is true (for cigarettes), because I go to Virginia for my job every week and driving back into Maryland the last convenience store I see – “Last Chance for Cheap Smokes.”

Craig: That’s right.

monoblogue: Because Virginia’s tax is, like, thirty cents and ours is two bucks.

Craig: And if I throw out the issue of the corporate income tax, people are like “oh, you’re only for the rich people.” All right, I’ll throw out other issues: Harford County, a lot of military people stationed there, when they get done they retire. They move to Pennsylvania because their military pension is taxed. We shouldn’t tax a military person’s pension, they already made their sacrifices. So let them live here in the state of Maryland.

monoblogue: I think they have tried to do that a few times, and the legislature just doesn’t go anywhere.

Craig: Well, they haven’t gone with it because they haven’t been told to go with it. If the governor had said go with it, they would have gone with it.

monoblogue: That’s true, it’s usually Republicans who bring it up.

Craig: Well, you know, I think if enough veterans were showing up and saying – what was this whole thing about the governor pointing out and bragging about what he was doing about creating jobs for veterans, about a month ago? Remember he was changing some policies, it was going to make it easier for them to get a job?

monoblogue: Right.

Craig: Why would they want to come here and get a job and pay a higher tax on their pension that they also get and then a higher tax on their income tax? So, we need to change the income tax…(also) the death tax is ridiculous, somebody in your family passes away, they pay taxes on that money for their entire life – why are you paying a tax to inherit it? If they were smart I guess they should sell everything and give you the money before they pass away. But people leave the state all the time, go to Florida, no tax, go to Pennsylvania, don’t have to pay that tax.

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: Right, exactly. I’m sure he’s created a few mousetraps for his successor to deal with if they want to change things. It’s going to be harder to undo this Gordian knot then most people would think.

Craig: And then they brag about, oh, we’re going to do this private-public partnership, this 3P thing, it’s like – most likely that’s not going to work. If you look at something that’s going to be a good financial thing with some private company coming in and doing something, they probably could have done it if they didn’t have to pay the minimum wage, if they didn’t have to pay the union fee, if they didn’t have to deal with the minority business stuff – you could probably lower the prices of those projects by 35 percent. Stephanie Rawlings-Blake just gets a billion dollars for school construction, well, $300 million of that is going to be wasted and she could have had it – that would have done how many more schools for her?

monoblogue: Exactly.

Craig: So which is better? Is it better to have a good school for the kid, or you created this “fake” job?

monoblogue: Right. I remember, being from Ohio, when Ohio built all its schools they actually eliminated the prevailing wage for schools just to get more bang for the buck.

Craig: Yeah, that’s what you should do. Period.

monoblogue: Speaking of education, I liked how you tied in the lack of – lack of academic achievement with our so-called “number one” ranking. Now where do you – where do you prioritize your spending to bring up the actual achievement and not necessarily worry about being “number one” in the country?

Craig: A couple things. There’s a lot of duplication that we could…a lot of duplication. Here’s the situation in Harford County. Since I’ve been County Executive, the size of the school board employees has increased by 650 employees. The school population has declined by 2,500 students. Why didn’t the size of the working staff decline?

Now, if they had had 2,300 new students move in they would have come to me and said, “we need 100 new teachers.” But when 2,000 went down they didn’t say, “well, we didn’t need 100 teachers anymore.”

monoblogue: No.

Craig: So we have that situation, and I get teachers complaining to me all the time, “well, you know, the size of the class has gone up.” If you’re a good teacher, it doesn’t matter how many kids you’re sitting in the class. The first year I taught, 39 kids in the class. Second year, 42 kids in the class. Forty-two. I didn’t even have enough desks for the kids; one of them had to sit at my desk and one of them had to sit at a table. So when they say there’s 23 kids, the fact is, studies have been shown that the change does not occur until the size of the class falls below 15. So that’s what you’re going to do, if you say we’re reducing the size, we’re going from 24 to 23 – so what? If you’re a teacher, you can’t teach 24, can’t teach 25? That’s one thing.

But there’s duplication, so much duplication, in government – county government and school board government. I have a capital projects committee, they have a capital projects committee – why do we need both? I have the same guys that do the investigations, the inspections and all that stuff, I have a procurement department. I don’t buy chalk and all that stuff, but they have a procurement department. That’s duplication. I have a lawyer, a law department, they have a law department – duplication. They have a human resource department, I have a human resource department, duplication. Now, do I get rid of all those employees? No, but at least get rid of the top person. The person who’s making $150,ooo, instead of having two of them, you only have one. And you can probably merge a lot of things together and only have office – and none of that takes place in the classroom.

monoblogue: You need to think about that at the state level, and not necessarily the county level – I mean, if a county wants to do that, that’s fine and dandy, that’s their money. At the state level is where you’ll be concentrating…

Craig: Yes.

monoblogue: …I would think we need to rightsize the state Department of Education…

Craig: I agree.

monoblogue: …because the localities should control anyway.

Craig: Yes they should. Yes they should. And it has grown exponentially. And if you look at higher education, when I was in the House I was always assigned the higher education budget and you look at a college that’s got nine vice-Presidents – why? We only have one Vice-President in the country, yet nine in a college? Come on! And are they teaching? No. You know, all these different people, you have all these professors that are teaching one class, maybe two classes. I had someone, when I was doing a debate one time, who said “what are you going to do about the cost of higher – you know, how much my education’s going to cost?” We need to reduce it on our size – on our side, for one thing. We’re forced to spend this money on that, it doesn’t need to be spent.

So there’s a lot of duplication in both higher ed and elementary through high school at the state level that I agree we could change.

monoblogue: Okay, I appreciate it.

Craig: Thank you.

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Ideally, I wanted to come in about 15 minutes and with the interruption that’s about where I ended up. Hopefully this establishes some of where David Craig stands on various issues.

Craig 2014 announcement tour reaches Salisbury

It wasn’t exactly by Pony Express, but the third of three days of current Harford County Executive David Craig traveling the state and making his 2014 plans official began this morning in Salisbury at the Government Office Building. His announcement drew about 40 onlookers and various members of the media, as you’ll soon see.

Following Monday stops in Havre de Grace, Dundalk, and Hagerstown, and an itinerary yesterday which included Silver Spring, Prince Frederick, and Annapolis, the final day was opened with some pleasant weather and welcoming remarks by Wicomico County Councilman Joe Holloway.

Holloway’s welcome served as a means to introduce many of the local elected officials who were there to back this Republican effort; a group which included Central Committee members from Worcester, Somerset, and Wicomico counties as well as his fellow County Council members Bob Culver and Gail Bartkovich, Wicomico County State’s Attorney Matt Maciarello, and Delegates Addie Eckardt and Charles Otto.

Holloway then introduced Gail Bartkovich, who had the honor of introducing our esteemed guest.

Gail opened up her warm welcome by noting that our state government seems to think that problems are solved in just two ways: taxes and spending. “Annapolis has forgotten that Maryland government works for us,” said Bartkovich. “We deserve a choice.”

Gail went on to point out that David is unique as a man who has headed up both the Maryland Municipal League and the Maryland Association of Counties as mayor of Havre de Grace and Harford County Executive, respectively. She touted a number of fiscal accomplishments David has achieved as county executive, including leadership in agricultural preservation and a “buy local” campaign. Obviously in a rural county like Wicomico this was seen as appealing.

But the key points Gail wanted to bring up were Craig’s experience as a county leader and the idea David could be a credible alternative to the current policies in Annapolis which I feel only seem to enrich those who are connected. In that, she accomplished her goal and set the stage for the man who would be governor.

The audience seemed quite receptive to his message as well.

In his 16-minute statement, Craig touched on a number of key points.

Coming from a long line of Marylanders, Craig praised the state he grew up in. “I’ve been blessed to grow up in Maryland, to live here, to raise a family here, to have a career here, and to live with my grandparents and – now – our grandchildren,” he beamed.

Comparing his hometown to Salisbury and other small towns in Maryland, Craig reiterated his “faith” in the state, noting, “we can get off the mat, we don’t have to be counted out and don’t have to give in.” But our leaders were focused on the next election, not the next generation, said David.

“When they focus on their political power for too long, we see our faith starting to erode,” warned Craig. He then blasted the incumbent, stating that “politicians…seem to be more concerned about being rockstars and celebrities and (with the) headlines than they are about doing what they’re supposed to do.”

All the while, Maryland is being “outflanked” by its neighboring states. Yet, in the areas adjacent to our surrounding states, said Craig, “we are the forgotten Marylanders.” Government isn’t working for us, he continued – the “political monopoly” in Annapolis is working for itself.

David turned to the taxing legacy of Martin O’Malley, pointing out that the 40 tax increases enacted by the O’Malley/Brown administration have cost working Maryland families $3.1 billion. Yet he warned, “if we don’t offer an opportunity or a choice in 2014, by 2018 that number will be $20 billion.”

If government continues to act as it pleases, added Craig, we will continue the trend which has seen 6,500 small businesses leave the state – second worst on the East Coast – and 31,000 taxpayers who fled the state for more tax-friendly confines like Florida. As an aside, David added “it would have been better to get rid of the death tax than the death penalty,” a line which drew applause from those present.

Turning to education, David reminded the audience which had been fed the line about Maryland’s top-ranked education system that the assessment had come from a trade publication. “That has no connection with student achievement,” said David. “It’s all about how much money you spend in education, not about how well the children do and what happens with them afterward.”

Craig was also critical of the state’s transportation plans, chastising the waste and conflicts of interest in awarding contracts, along with “falsely” balancing the state budget with $1 billion from the Transportation Trust Fund.

David asked about how we “lost our balance” between the environment and agriculture, steering away from sound science principles and instead “looking at what the headlines will be” in the quest for a cleaner environment. Eventually this imbalance will force succeeding generations to leave the state.

“This is what an unbalanced government looks like,” added Craig. He then extolled his achievements in 32 years in government, including setting a financial plan for his successor as mayor of Havre de Grace which has enabled the lowering of the city’s tax rate seven years in a row. (If only Salisbury could say the same.)

But his biggest selling point may have been lost, buried in a paragraph of other remarks. “We have more jobs in Harford County now than we did before the recession started,” said David.

“I’m just a regular Maryland guy,” he continued. “I refuse to accept we are going to continue to be a one-party state…we need to give people a true choice.” And with a track record of confounding the naysayers, Craig was confident in victory. “I’m not going to be counted out,” concluded David.

He then talked to his supporters before turning his attention to the media.

There was a good bit of local media there, with a camera crew and reporter from WMDT-TV patiently watching the affair before getting their interview in, while next in line was Jennifer Shutt of the Daily Times.

As I noted in my post from early this morning, newly-minted District 38C candidate Mary Beth Carozza was also there and introduced herself to the would-be governor. I also received a little insight about her campaign as I was awaiting my chance to speak with David.

That interview I had with David Craig will be published next Tuesday as I polish off the TQT series for a day. I was the only local blogger there so you’ll get his insight on some local issues.

Yet David didn’t just jump on the bus and leave after finishing with me. Instead he investigated another local business.

Today was the final day of the Craig announcement tour, which came just as fellow Republican Ron George will formally kick off his 2014 gubernatorial campaign this evening in Annapolis and rumblings from former Lieutenant Governor and RNC Chairman Michael Steele about throwing his hat into the ring later this year. (Sounds like a former governor I know, feeling entitled to win without a campaign.)

But Craig seems to have established his place as the man to beat thus far, and it’s certain that he’ll see a lot of Salisbury in the coming months as he seeks the nomination.

If you’re in for the penny, you’re in for the pound

A week or so back I referred to one of Delegate Michael McDermott’s summaries of the 2013 General Assembly session, and he’s come back with another installment today. In this one, he laments the economic effects of those “few pennies” we’ll be paying every day to the state in additional taxes and fees by reminding us that businesses will be paying them, too. McDermott concludes that:

As the government draws more money out of the economy through these new taxes and fees, taxpayers (and) consumers find themselves with fewer discretionary dollars. This always results in fewer dollars being put back into our local economy and every point of commerce suffers. When business slows, expansion is put on hold. When business suffers loss, people lose jobs.

All this seems to be basic common sense which is lost on those who inhabit the Maryland General Assembly and vote with the majority party. It somehow never seems to seep into their consciousness that business aren’t going to pay maybe $100 a year for the so-called “rain tax” or the promised no more than $2 a month for “green” energy, nor will the effects of ever-increasing gasoline taxes be minimal for them.

The problem they have is twofold:  the Maryland economy is dynamic and the geography is static. From my house I can be in Delaware in 15 minutes and Virginia in about 40. It’s worth pointing out that just four of Maryland’s 23 counties aren’t on a state border (Anne Arundel, Calvert, Howard, and Talbot as well as Baltimore City) while several border two states and Washington County touches three. Certainly it’s not like larger states where traveling to a different jurisdiction to take advantage of their business climate involves the expenditure of several hours and a half-tank of gas.

So Maryland has to compete on a playing field which is far from level, and savvy consumers know just where to go to get the best deal. It’s no wonder that neighboring states have large shopping meccas close by Maryland’s borders.

Now this isn’t all bad news for Marylanders, as some cross state lines to work just as some who live in neighboring states make up Maryland’s too-slowly growing workforce. But as critics like McDermott and Larry Hogan of Change Maryland point out, we can do better.

And don’t think Mike isn’t seeing the political reality. Note this passage in his report:

I am not sure where the disconnect lies with legislators who see nothing wrong with this tax and spend approach at governing, but I am quite sure the public is fully able to connect the dots. I was recently at a meeting of local business owners and entrepreneurs when a senator told them that what they could “conceive…the government would help them achieve.”  Sadly this was repeated so there was little doubt where he was coming from in his thoughts regarding the purpose and scope of government.

It wouldn’t surprise me if the Senator in question isn’t the person McDermott will be facing next year.

The lesson of ‘Julius’

Remember last year when the Obama campaign came up with the idea for “Julia”, a fictional woman who was supposed to represent how Obama made life better for women everywhere? (You know, that phony, made-up ‘War on Women’ and all that.) I wrote about this about a year ago.

Well, one year later the good folks at the Competitive Enterprise Institute came up with the idea of “Julius”, a black worker affected by Big Labor and its policies and politics. It’s well worth the three minutes of your time to watch. I’ll wait.

While the account is fictional, the problems being caused by these policies are not. Yet the liberals never seem to learn – they seem to think that just one more increase in the minimum wage will do the trick, or one more revenue hike will lead to the proper “investments” of taxpayer money. And the golden goose will never stop a-layin’.

All these ideas, though, defy logic.

For example, the idea of paying just minimum wage is that of giving someone who doesn’t have a high skill level and is not all that valuable to the employer the amount which has to be given by an artificially-created law which has no relation to the actual market. If someone’s labor is worth $7.25 an hour to the company and no more, well, then that person will be a minimum wage hire. But if the minimum wage is $10 an hour – and they’ve tried to do this in Maryland on a couple of occasions – there’s no reason to hire someone who’s still only worth $7 or $8 an hour to the compamy because it would be unprofitable in the long run. That’s the point made in the video. (One thing not mentioned is that the reason unions push for minimum wage increases is because many labor contracts are pegged to maintaining a salary point a certain percentage or dollar figure above the minimum, which means automatic but unearned and non-negotiated wage increases for their workers if the minimum wage goes up.)

But if there were no minimum wage, all it would mean is that the labor market would find its level. Arguably, this is one problem which is blamed on illegal immigration and the penchant to work on a cash or “under the table” basis – they could be happy with $5 an hour if taxes aren’t taken out and there’s no need for a Social Security number.

Taken to its opposite extreme, what if there were a maximum wage and no one could work for more than, say, $20 an hour? What incentive would anyone have to succeed knowing they could only reach a certain level, and what enjoyable parts of life would we have to do without given the artificial limit of $800 a week for 40 hours of labor? That’s only $41,600 a year before taxes. To me, having a minimum wage is just as unrealistic as having a maximum one – and don’t get me started on the idiocy presented by the so-called “living wage.”

Without a minimum wage, would employers try to take advantage and pay, say, $5 an hour? (Ironically, that was my hourly wage on my first job in 1986 – one Lincoln per hour.) Some would, but in time these low-level employers would find that the labor pool willing to take that kind of wage would leave a lot to be desired, so they would have to increase their offerings to find better workers. On the other hand, in places where labor is in high demand, like the oil-rich portions of North Dakota, even workers at menial jobs get double-digit hourly pay. (Incidentally, North Dakota is a right-to-work state.) Once the employment market levels out there, that boom will slow down and wages will come back to a particular supportable level for both employers and employees, with those who work in the oil fields remaining on the top of the wage totem pole because their work is more valuable to their employer than a guy flipping burgers at the local fast food joint, as it should be.

But there is one entity which will never settle for the minimum wage, and that’s government. Living in a state which seems to be the leader in one category above all else – tax and fee increases – it always seems as though Big Labor is right behind them every time the state wants a little more out of our pockets. Perhaps this is more understandable in the case of increasing the gas tax, as those unions involved in construction moaned and complained that we hadn’t increased the tax in over two decades. (To which I replied: so?) Supposedly, the additional jobs created by building new infrastructure – even as frivolous as new light rail mass transit lines will eventually be – will assist in jump-starting the state economy.

Again, however, this is a case of gaming the market and not allowing it to seek its own level. Granted, to use the example above, we do need to improve our roads and transportation infrastructure but there were other methods of doing so and more productive ways to spend the money. Nor does this count the other tax increases we have endured over the last half-decade on income and sales taxes, additional fees, and various other methods of vacuuming our hard-earned dollars out of our greedy little fingers and into the deserving coffers of the state for “investment.” Instead of each of the six million or so Marylanders making their own decisions on where to spend, they get part of their check confiscated from them so the state can transfer wealth from flush to impoverished, taking a decent-sized cut for themselves in the process and producing nothing. Julius is the one left poorer for it.

In the video, Julius reaches what’s supposed to be his golden years without a pension because his company was driven to bankruptcy by the union he didn’t belong to. Unfortunately, the creation of promises over a generation – without the actual funding to back them up – are poised to harm both union and non-union retirees alike. Public pension funds nationwide on the aggregate have a funding gap between assets and promised benefits estimated at around $1,000,000,000,000. (That’s one trillion dollars, or about 3/10 of our annual federal budget.) While that pales next to the unfunded liabilities of Social Security and Medicare, this is still a vast sum which in all likelihood won’t be made whole without rampant inflation or a significant devaluation of the dollar.

Perhaps it’s a good plan for those under 50 to plan on a retirement – if leaving a job is even a possibility in that distant of a future – without either Social Security or Medicare because neither can survive in their present form. Simply put, they aren’t taking in as much as they are putting out. A half-century or more of promises and IOUs was never addressed because people thought the good times would last and last while the bill never arrived. That simply defies common sense, and here’s your invoice.

We don’t know what happened to “Julius” but I’m sure a lot of people can guess the rest – he dies a pauper, having done things the way he was told to do and getting no reward for it because other special interests figured out how to prime the political pump and have the system rigged in their favor. This all can be changed, but it will take a long-term concerted effort and there will be some bitter, bitter medicine to swallow in the interregnum.

As the son of a former union worker whose plant was a casualty of the recession of the early 1990s and a mom who worked for over 20 years to help support the family, I can understand just where this was coming from. My mom might not agree, but I hope she has a happy Mother’s Day nonetheless.