Champions or chumps?

Apparently the Maryland State Education Association has some worries about the prospects of two of our local candidates. Almost six months out from the elections and look what I got in the mail yesterday:

Given that, out of over 150 MSEA-endorsed candidates across the state, the body only “recommended” five Republicans (including Christopher Adams locally) one can come to the conclusion the MSEA is pretty much a shill group for liberals. Although Chris is a fine candidate, the fact that the MSEA endorsed a Wicomico Republican could perhaps be traced to the ongoing fight about disassociation by the local bargaining unit. Nor was an MSEA mailing put out on his behalf, at least not that I’m aware of.

There are a couple things I can tell from this mailer: one is that it came from Board of Election records based on the fact it has my full name like my voter registration does. And it’s bipartisan, as a number of Republicans I know have reported receiving it; most likely it went to the truly consistent voters. Something tells me that various groups are going to try and convince voters that Mathias and Conway are practically the second and third comings of Ronald Reagan, but with a softer side – that’s why the MSEA is stressing how these two are backing education. That is, though, if you consider throwing money at the issue as backing education.

For example, let’s consider that first claim about “record investments in our schools.” In Conway’s case, let’s not forget that he was a prime mover back in 2012 behind legislation to circumvent Wicomico County’s revenue cap in order to increase the county’s share of education funding. (Conway was a co-sponsor of a similar House bill.) This had the potential of leaving the county $14 million short in their FY2013 budget, and directly led to an income tax increase reluctantly passed by our County Council. Norm voted for both versions of the bill in the House. (Mathias was absent when the Senate bill was voted on.) Those “record investments” had to come from somewhere and a large share came from the pockets of those in District 38 here in Wicomico County. Overturning the will of county voters? Way to be “standing up for Wicomico County,” Norm.

And then we have the aspect of pre-kindergarten. While the state’s goal seems to be cradle-to-grave control, the bill in question only expands pre-kindergarten to those who meet certain income guidelines, at an annual cost of no less than $4.3 million. Moreover, there is no guarantee that any local children would be impacted – but it provides 160 more potential MSEA union members because the bill mandates an average 1 teacher to 10 student ratio. Of course, both Conway and Mathias voted for the bill – what’s a little $4.3 million mandate in the grand scheme of things?

While it’s an apples-to-oranges comparison to some extent, the question of the effectiveness of Head Start also leads to questioning whether a formalized school setting does much good for four-year-olds. I guess we’ll spend lots of taxpayer dollars to find out.

Scrutiny is also due regarding the “larger voice in how new curriculum is implemented,” a claim based on passage of HB1164. It doesn’t matter how loud we speak, because money is talking louder – and there’s going to be a lot of it needed to enact Common Core standards and testing. This is from the fiscal note for HB1164:

Finally, the full cost to administer PARCC is still unknown. In July 2013, PARCC announced that the summative math and reading tests would cost $29.50 per student. This is a little less than the $32 per student Maryland currently spends on assessments, but it does not reflect several other formative tests PARCC is developing that Maryland may select or the technology infrastructure required in every school to handle the capacity and network requirements to administer the computer-based assessments. Many schools do not have sufficient technology infrastructure to meet these requirements. MSDE is in the process of assessing the technology readiness of Maryland’s schools. The local school systems identified over $100 million in needed technology improvements to implement PARCC online. MSDE has contracted with Education Superhighway, a consulting firm, to evaluate the technology gap to implement PARCC online by the 2016-2017 school year. Several states, most recently Georgia and Oklahoma, have recently left the PARCC consortium over cost concerns. There are also long-term budget implications for maintenance and operational costs of assessment administration upon the termination of federal RTTT grant funds to the State and to PARCC. (Emphasis mine.)

In other words, we are once again buying a pig in a poke. Note also that the phrase “Common Core” was excised from the bill after first reading because its reputation precedes it now.

Basically what this bill did was allow Martin O’Malley (and his House and Senate minions) to designate a number of “yes men” who will invariably come to the conclusion that we need more money to throw at the problem. But in reading the bill I fail to see how we in Wicomico County will get a “larger voice,” even if one of those appointed happens to be, say, a Norm Conway or Jim Mathias. It won’t help.

The mailer urges us to call Senator Mathias and Delegate Conway to “thank them for their leadership on education issues and their work to keep our public schools #1 in the country.” It’s a way of skirting the election law since they’re not openly advocating a vote on their behalf – nothing new here, as conservatives use the same method.

But how about calling them and asking why they really aren’t supporting Maryland’s school-aged children? Why didn’t they advocate for parent empowerment bills which didn’t even sniff a real committee vote (it was withdrawn in 2012) in three consecutive sessions this term? Ask them if money shouldn’t be following the child regardless of where a parent decides to send them to school, or teach them at home? And while Senator Mathias has been of assistance in the matter, we all should ask Norm Conway why he won’t stand up for true accountability and support the right of Wicomico County voters to select their own Board of Education?

Ask yourself: are they protecting the schools as the mailer says, or protecting the children by allowing parents to do their job? There truly is a difference.

Shocker: capital leaves a high-tax state

I would have argued for a release which wasn’t on a holiday week – a point I made to spokesman Jim Pettit – but on Tuesday Change Maryland released a fascinating study about the migration of capital from Maryland to other states; a study which also looked at the effect on each of Maryland’s 23 counties and Baltimore City.

In the release, Change Maryland Chair Larry Hogan is quoted as saying:

A growing tax base is the ultimate win/win situation in public policy. It eases the pressure to raise revenues, and conversely, a shrinking tax base often leads to a troublesome tax-and-spend downward spiral as actual revenues fail to meet estimates.

Welcome to Maryland, huh? How many gimmicks has the state tried over the last half-decade or so to address a yawning structural deficit? We were told the tax hikes in 2007 would do the trick, but if that wasn’t the case we would be rolling in dough from all the casinos we would build to keep those Free Staters wagering at home instead of traveling to Delaware or West Virginia to play those one-armed bandits. And so on, and so forth – meanwhile, the state continues to increase spending at a rapid clip, daring revenues to try and keep up in a losing race. The Change Maryland group also has a handy list of the 24 tax and fee increases we have endured since Martin O’Malley came into office inheriting a budget surplus in 2007.

So when I received a preview of this study on Monday, the first thing I naturally gravitated to was how it affected my home county of Wicomico, which has had its own budgetary struggles over the last couple years. Those of the liberal persuasion – a number which includes our County Executive, Rick Pollitt – blame a voter-imposed revenue cap for part of the problem, but a larger issue is the rapid decline of property values that, through property taxes, make up a significant portion of county revenues.

Whatever the reason, the Change Maryland numbers show a stark difference between Wicomico and neighboring counties on the lower Eastern Shore. Using the factors of those coming and leaving, our overall income tax base declined 0.77% while each of the three surrounding counties (Dorchester, Somerset, Worcester) increased at 0.47%, 0.16%, and 2.07% respectively. Worcester’s gain was the largest in the state, with Kent County on the Upper Eastern Shore second at 1.55%.

While the Change Maryland analysis focuses on larger counties, Hogan also had encouraging words for the rural parts of the state:

I’m very encouraged by how well we’re doing in the rural and outlying counties. These small economic engines are powering the state forward by attracting new residents.   Clearly where we need to see improvement is in our largest jurisdictions.  Baltimore City is losing its tax base at unacceptable levels and Montgomery County’s stagnant tax base will further tarnish its business reputation as elected officials seek more revenue to make up for budget shortfalls.

Yet there are three exceptions to that rural/urban rule, as Allegany County in the western panhandle lost quite a bit of its tax base as did Caroline County (also on the Eastern Shore.)

I think the problem can easily be addressed for Allegany County by allowing the extraction of natural gas from the Marcellus Shale which lies underneath; meanwhile, Caroline County is such a small number to almost be an anomaly. However, Caroline is a very rural (and landlocked) county lying somewhat off the beaten path and attracting jobs and residents can be difficult in those cases.

On the other hand, the obvious point Change Maryland is making about the lack of encouragement to business growth is most reinforced by the tax base declines in Baltimore City and County along with the close Washington D.C. suburbs of Montgomery and Prince George’s counties. Their tax base may be shrinking, but combined these entities make up about 60% of Maryland’s roughly 5.8 million residents.

So that leaves poor old Wicomico County, which is flailing just like the big boys. But why?

The liberal and Pollitt argument would go something like this: because our budgets were made artificially tight by the revenue cap, we couldn’t “invest” in quality-of-life aspects of government like education and recreation to attract people to live here. But the key attraction to an area to businesses is generally how receptive the location will be for the bottom line – even though Perdue is located in Wicomico County many of its workers choose to live in other areas for various reasons, whether lower property taxes, better housing or schools, or just liking a place to live enough to make the extra commute worth it.

If you look at the actual Wicomico County numbers, it’s interesting to see that the number of filers declined by just 45, out of a total of over 2,000 on each side – it’s not a statistically significant change. But add in the dependents and the number swells to an outflow of 215. It’s a suggestion that families with kids are leaving the area; naturally those on the Left would quickly indict the lack of spending on schools and quality of life as a culprit.

But the income difference is stark enough to suggest that it’s truly a lack of good job opportunities that is costing Wicomico County – there’s about a $5,000 income differential between those leaving and those coming in. In other words, good-paying jobs are being lost and replaced by ones which aren’t as lucrative. It’s one thing that I wish Change Maryland had included, but instead I did the simple math.

The first number in these upcoming series is the income (in thousands) per filer coming into each county and Baltimore City. The second number is the income (in thousands) shown from outgoing filers, with the third plus-or-minus number being the difference between the two:

  • Allegany: 31.48, 37.73, (-6.25)
  • Anne Arundel: 51.74, 53.22, (-1.48)
  • Baltimore City: 37.81, 43.83, (-6.02)
  • Baltimore County: 42.44, 46.28, (-3.84)
  • Calvert: 57.61, 53.71, +3.90
  • Caroline: 35.12, 31.22, +3.90
  • Carroll: 55.14, 47.76, +7.38
  • Cecil: 45.86, 45.53, +0.33
  • Charles: 48.52, 48.89, (-0.37)
  • Dorchester: 34.13, 35.40, (-1.27)
  • Frederick: 53.55, 50.64, +2.91
  • Garrett: 48.45, 32.48, +15.97
  • Harford: 52.17, 48.51, +3.66
  • Howard: 61.39, 59.05, +2.34
  • Kent: 48.79, 36.24, +12.55
  • Montgomery: 58.62, 59.00, (-0.38)
  • Prince George’s: 40.18, 40.85, (-0.67)
  • Queen Anne’s: 58.41, 49.64, +8.77
  • St. Mary’s: 50.51, 49.36, +1.15
  • Somerset: 26.74, 27.00, (-0.26)
  • Talbot: 53.00, 46.96, +6.04
  • Washington: 39.12, 38.59, +0.53
  • Wicomico: 31.44, 36.88, (-5.44)
  • Worcester: 49.67, 34.53, +15.14

Looking at the numbers through this lens, you can see that Wicomico is right there with Baltimore City and Allegany County in bleeding good-paying jobs and attracting what might be considered the working poor. Oddly enough, both Wicomico and Allegany border the two best performers on this particular comparison as both Garrett and Worcester counties are attracting new and much more affluent tax filers.

My theory on this stark differential is that these wealthier newcomers are retirees who wish to live out their years by the beach or up in the mountains, not necessarily those drawn because of good-paying jobs. A combination of retirees and people who wish to live in more rural areas, perceiving a better quality of life there, and don’t mind a long daily commute might explain the success of Eastern Shore counties like Kent, Queen Anne’s, Talbot, and perhaps even Caroline.

And then there’s the group that simply threw up their hands and moved out of the state entirely. The Change Maryland study points out Virginia was a major beneficiary of Maryland’s losses, which makes sense considering those who work in Washington D.C. can just as readily commute from Virginia as they can from Maryland. Dan Bongino – who’s familiar with working in Washington as a former Secret Service agent protecting the President –  has mentioned the fact that many considered him “crazy” for selecting Maryland over Virginia when he moved here from New York (because of the tax burden) on the campaign trail. But “I saw Maryland first and I fell in love with it,” said Dan.

Unfortunately, there are too many other pragmatic thinkers who may love Maryland but are deciding to vote with their feet and depart for greener financial pastures. It will be the job of those like Hogan and Bongino to shake up the state and place it back in a positive direction for job growth by encouraging business investment instead of considering wealthy people cash cows to milk until these producers crumple over from exhaustion.

The state takes over

Editor’s note 5/27/2022: I have brought this home from the dead pages.

Tonight the Wicomico Society of Patriots (WSOP) will hold an “emergency meeting” to discuss impending state action on the county’s budget, making the claim that “your property tax cap is dead!” One may ask why the budgetary woes of a comparatively small county on the Eastern Shore are relevant to both the functions of the state and to those reading this piece. To answer that question, a little bit of history is required.

In 2000 the Wicomico County Council, which at the time held both the legislative and executive functions of county government, enacted a huge property tax increase – a whopping 46 cents per $100 of assessed valuation – on county homeowners. Angered by the surge in both taxation and spending, county residents enacted a revenue cap later that year at the 2000 election. This cap limited the revenue from property taxes to an amount no more than 2 percent over the previous year’s take.

Four years later, Wicomico County voted in an executive form of government and reduced County Council to a strictly legislative body. In 2006 Wicomico County voters elected Democrat Rick Pollitt as the first County Executive. Pollitt was no fan of the revenue cap, and for the first few years of his initial term created a shadow budget illustrating how he would have spent the additional revenue he would have liked to use had the cap not been in place. However, by tempering his opposition to the revenue cap and deciding it wasn’t a fight worth having during difficult economic times, Pollitt was re-elected in 2010. While several other local politicians have expressed frustration with the restrictions on property tax revenue put in place by county voters, no serious bid to change or remove the cap has occurred in the eleven years since it was enacted – at least not locally.

The bill which the WSOP is fretting about passed in the 2012 Maryland General Assembly session as Senate Bill 848, which has the innocuous title “Education – Maintenance of Effort.” Its function, however, is to allow the state to withhold general fund money from each nonconforming county and instead send it directly to a county’s Board of Education if an MOE waiver isn’t approved by the state. More importantly, the bill waives any voter-enacted revenue cap and allows county governments to increase property tax rates in excess of those limitations, provided the proceeds go to the county’s Board of Education.

The passage of this bill, essentially on a party-line vote with most Republicans voting no, placed a gun to the head of the seven counties which did not fully fund their MOE for education. By the numbers, the most significant shortage occurs in Montgomery County, which fell $127.2 million under its target number. Based on their local education budget of nearly $1.5 billion, though, Montgomery County is less than 10 percent short of its target amount. (This is according to the fiscal statement for SB848.)

But Wicomico County finds itself in a much more drastic situation, as it’s nearly $14 million short of the $50.1 million the state says the county should provide. Prior to the passage of SB848 Wicomico could have taken advantage of state law to eventually bring their MOE to a more realistic portion of a general fund budget which is just $113 million for FY2012. As a comparison, the county’s educational budget for the same period (from all sources) is just over $180 million. In the past, Annapolis-based critics of the Wicomico revenue cap have expressed their frustration with the county’s lack of willingness (or revenue) to more completely fund education, leaving the state to fill in the gaps. Delegate Norm Conway, a Democrat representing Wicomico County, was a co-sponsor of a House bill similar to SB848.

Because of the passage of SB848, though, the Wicomico County Council – which is dominated by Republicans, 6-1 – will find itself in the unpalatable position of having to pass at least one tax increase as the county’s income tax will have to rise to the state’s maximum of 3.2% in order to reduce the shortfall. They’ve also conceded the property tax rate will have to rise by the full extent allowed under the current revenue cap. 

But Wicomico’s problem is indicative of a larger intrusion, showing the lengths the state of Maryland is willing to take in butting into county affairs. In another area of government, the enactment of PlanMaryland angered local officials by taking away much of the leeway they were allowed in making planning and zoning decisions. SB848 similarly reduces the jurisdiction of county governments, with the ultimate goal of Annapolis seemingly one of making the individual counties and Baltimore City little more than lines on a map.

Obviously the state is concerned about public education, and they provide billions of dollars to the state’s 24 local jurisdictions to achieve their goal of a well-educated workforce. Yet when the state unilaterally decides that the will of the people, expressed at the ballot box, is invalid because a county isn’t providing the funding which the state’s opinion believes is necessary – that’s a frightening line for them to cross. The Wicomico Society of Patriots has ample reason to believe this is a step too far, and I plan on covering the meeting. Look for a report Thursday.

Solutions to our problems

Tonight Wicomico County Councilman Bill McCain hosted a townhall-style meeting designed to solicit solutions to the county’s present and upcoming budget woes. While yesterday’s Daily Times article pointed out that McCain was looking for suggested possible fixes, many of the nearly two dozen speakers had a single message: taxes are too high and they couldn’t afford anymore increases there. “Stay within your budget,” warned resident Kay Gibson.

A number of speakers echoed their personal economic struggles; resident Ed Nelson said it well when he noted, “times are tough for everyone.”

But Bill was blunt: “you will have serious, serious services eliminated in Wicomico County” next year – “what are you willing to give up?” He continued, “we need to do things differently…unfortunately, we have capped ourselves on the revenue side.”

McCain is in somewhat of a unique position, as the FY2011 budget will be the last he’ll have input into – he’s chosen not to seek re-election, maintaining his original plan to serve one term. But he was determined to maintain his home and business here, so it’s obvious McCain is planning to stay involved. Two other council members who would presumably maintain their positions, John Cannon and Sheree Sample-Hughes, were also in attendance.

The county’s Board of Education was also a favorite whipping boy of some. Many speakers advocated the accountability an elected school board would provide.

On that note, all three Council members present were put on the spot by questioner Joe Collins, who wanted to know how they stood on an elected school board. McCain was a firm “no,” citing the “diverse” school board we presently have. Cannon and Sample-Hughes held their cards closer to their chest, with John stating a “70-30” likelihood of support and Sample-Hughes wanting to study the particulars more – she did indicate her district was relatively supportive as was she on a personal level.

While a number of speakers commented on the revenue cap and didn’t want to see it go away, a couple observers pled for “investment.” Mark Cullen, representing the county’s volunteer firefighters, pointed out that the $4 million provided by the county covers less than half of the expenses. Instead, we’re “burning our personnel out doing fundraisers.” (Surely there was no pun intended.)

County resident John Groutt blasted the “simplistic” solutions offered by the number of “TEA Partiers” in the audience and preached “we need to invest in our children.” We also needed to address the issue of sprawl. On the other hand, it was also properly pointed out that areas which tax heavily tend to have difficulty maintaining businesses and jobs.

Most of those commenting were critical of the county’s current spending, but there were a number of good ideas pitched for consideration. Among them were:

  • Hiring a full-time auditor. The problem is that the county’s charter dictates the auditor be a CPA but the salary may not be sufficient.
  • Rein in the liquor control board.
  • Make union negotiations public as they are in Calvert County.
  • Eliminate the two at-large County Council positions.
  • Eliminate the County Executive’s Public Information Officer.
  • Instead of layoffs being the “last resort” they should be the “first resort.”
  • Replace the revenue cap with a tax rate cap, with exemptions for those on fixed incomes.
  • Rescind the increase in teacher’s retirement benefits.
  • Verify that all measures called for in the 2002 Parsons study are being followed.
  • Selling off any surplus land the county owns (my idea.)
  • Perhaps collecting some sort of tax on property owned by Salisbury University (also my idea.)

It’s worthy of note that in the last decade Wicomico County went from having the fourth highest property tax rate in the state to the fourth lowest. And if you consider education, public safety, and public works as “core functions” of government, McCain said that we spend 76% of our budget dollars on those items.

There’s no question that severe cuts will be seen when County Executive Rick Pollitt releases his FY2011 budget April 8th. But the dialogue tonight seems to suggest that raising taxes is going to be out of the question for overburdened county residents who will likely see tax increases on the federal and state levels.

Ideas for the right direction

On Thursday the BrinkleyPipkin budget reduction act (in Maryland that’s SB1004, Budget Reconciliation and Balancing Act) had its hearing. When I got the release on this hearing this was the part which jumped out at me:

The Brinkley-Pipkin budget reduction act had a hearing before the Senate Budget and Tax Committee today. By taking significant steps to further reduce spending in this year’s budget process, the Brinkley-Pipkin plan buys additional time to constrain spending to the existing available revenues without the need to raise taxes.
A key feature of the plan is the elimination of built-in statutory increases in state programs. This feature and an additional $75 million in spending constraint over the next three years would allow current revenues to “catch-up” with spending, thereby bringing ongoing spending and revenues into balance.

Many lobbyists and county officials testified today against additional cuts to state spending. Representatives of unions also opposed the Brinkley-Pipkin plan of additional cutbacks including the removal prevailing wage from state projects. The majority of citizens and taxpayers who testified supported all efforts to cut back government overspending. (Emphasis mine.)

So once again we have the government and big-government interests (i.e. the lobbyists) vs. the people. The information I was provided also had a chart showing the difference between our current budget path (which will certainly lead to higher taxes) and the Brinkley-Pipkin projections.

In theory, at least, the Republicans’ proposal not only balances the budget but creates a small surplus.

Obviously the counties were there to argue that the budget would be balanced on their backs and perhaps they have a point. But this should also lead the local governments into an effort to prioritize what services they wish to deliver, with the public being involved by determining how much they want to pay. For example, it would fan the flames of the ongoing debate here in Wicomico County regarding the revenue cap the county currently employs.

Government cannot co-exist with a free society as a cure-all. Every dollar taken out of your pocket to pay for services they wish to deliver is a dollar that you cannot use as you wish, despite the fact it was freely given to you. (In more and more cases, however, that dollar was given to you by the same government who wishes to take it away.)

It’s way beyond time to consider that role government has to play and amend it accordingly. Maybe not all of the cuts in the Brinkley-Pipkin proposal are wise, but they can begin this vital discussion of the role our state government plays in our lives.