Ambitious agenda? No, a vapid response

I was somewhat remiss last night in not mentioning the Democrat response to Larry Hogan’s State of the State address. Delivered by Delegate Anne Kaiser, I was expecting more of a robust set of disagreements but a pledge to work toward a better state in a bipartisan manner.

Then I remembered we were talking about Maryland Democrats here. Party Chair Yvette Lewis exhibited their true attitude in a pithy statement:

Today, Marylanders expected to hear from Governor Hogan a clearly stated vision for our State’s future. Instead, we got another campaign speech, even though the campaign for Governor ended almost three months ago. With cuts to education, and higher tuition being forced on our students, the Governor should look for ways to lessen the load on the middle class, instead of balancing his budget on their backs.

Governor Hogan’s campaign speech today does not reflect the actions he has taken or has told us he will take in the future. He said our students deserve a “world class education”, yet he cut $143 million from education. He said he knows that nitrogen and phosphorus run-off is the cause of the bay’s pollution, but he overturned an executive order on the Phosphorus Management tool that would decrease nitrogen and phosphorus runoff, and announced he will try to get rid of the storm water management fee. Simply put, the rhetoric doesn’t match the record.

Voters chose him to “Change Maryland”, but it looks like we, the taxpayers, are getting short changed instead.

Well, let’s see here. I would say Hogan’s vision is one of prosperity based on the tried and true approach where helping business succeed makes a state more prosperous. It’s embodied in a phrase attributed to a Democratic President, John F. Kennedy: “a rising tide lifts all the boats.” If you heard this as a campaign speech, given the opportunity Hogan wished to take in introducing himself and comparing and contrasting his agenda to the failed one of the last eight years, well, be my guest. But you’d be wrong.

Now, about those “cuts to education.” I admit I have a public school education, but I think I did pretty well in math. So when I look at the FY2016 budget and I see that the two figures under the FY2016 column for Elementary and Secondary Education and Higher Education are both larger than those same two figures under FY2015, I wonder where the “cut” is.

Expressed in millions of dollars, it’s FY2016 (7,513 + 5.954) – FY2015 (7,451 + 5,855) = 161.

I will grant it’s not a huge increase like you may think education deserves – but we were running a deficit here, Mrs. Lewis, mainly because the last governor and member of your party spent money like it was going out of style. Now the adults are in charge, so increases are more modest – if you call $161 million modest, that is – but they are paid for without raising taxes. (I know you hate that, but those of us in the hinterlands think it’s a refreshing change.)

And speaking as a person who would like a balanced approach to improving the Chesapeake Bay, why is it you wish to penalize the farmers who are doing their part while dismissing the upstream participants from responsibility? Oh, and the term is not “storm water management fee,” it’s “rain tax.” Own it, because it was your idea.

So the fact that Hogan is spending only a few hundred million dollars more this year than last is considered “short changing” Marylanders speaks volumes about the fact the other side is still in shock that the natural order of things was disturbed and a Republican became governor. In their entire responses, it was all about spending more money. Can’t Democrats come up with a solution which doesn’t involve more money out of our pockets or more government?

Democrats always claim to be the party of the working man, but too many Marylanders aren’t working and aren’t keeping ahead in this state’s moribund economy. In November, voters decided a new approach was necessary and it’s clear by their responses that Democrats haven’t been getting with the program.

The state of our state: an ambitious agenda

Now that the shoe is on the other foot for the first time in eight years, thousands were interested in how newly-inaugurated Governor Larry Hogan assessed the state of our state. And it didn’t take long for him to assess that:

But while our assets are many, and our people are strong and hopeful, their state is simply not as strong as it could be – or as it should be.

Yet in reading through the speech, I didn’t see it as a negative in any way. Instead, Hogan proposed a number of solutions which, instead of spending money or growing government, generally worked in the opposite direction. Breaking the laundry list into eleven parts, it’s easy to summarize the Hogan plan for year one:

  • Analyzing and enacting portions of the upcoming Augustine Commission report on business competitiveness. The idea here is to make Maryland more business-friendly and hopefully wean the state’s economy off a long-term dependence on federal government jobs.
  • Restructure government to be more efficient and effective, using the new faces placed at many of the Cabinet-level departments.
  • Legislation repealing the “rain tax.” This may get some serious opposition from the environmentalist groups who believe this is a fair way to pay for Bay restoration efforts, even though the fees were set by county and only affected ten of 24 county-level jurisdictions.
  • Legislation proposed to exempt military, police, fire, and other first responder pensions from state income taxes. Eventually Hogan would like this to cover all retirement income. It’s an effort to improve Maryland’s dismal standing and reputation as a place not to retire.
  • Legislation to exempt the first $10,000 of personal property from taxation, a move Hogan claims would eliminate the tax for half of Maryland businesses.
  • Legislation to repeal the automatic gasoline tax increases baked into the Transportation Infrastructure Investment Act of 2013.
  • Restoring the local share of Highway User Revenues, a sore spot among the state’s rural counties in particular.
  • On education, strengthening the charter school laws. More controversial will be the oft-tried BOAST tax credit, which gives a tax credit to those who contribute to parochial or private schools. Hogan noted previous iterations have passed the Senate only to fail in the House.
  • Hogan has already shelved the Phosphorus Management Tool, and called for farmers and environmentalists to work on a better, more equitable solution. He also promised to address the “long-ignored impact of upstream polluters,” including the problems at Conowingo Dam.
  • An executive order to deal with the heroin epidemic. Lieutenant Governor Boyd Rutherford has been tasked with this issue.
  • Reinstating the Fair Campaign Financing Act fund by bringing back the checkoff on the tax returns, and also establishing a commission to examine the state’s redistricting process via executive order. If I have the time, I’d love to serve on that one because we really do need to reform the system.

Certainly it’s not the strongly conservative agenda some may prefer, but I would consider it a good first step. Much of the reform will have to go through the General Assembly, and perhaps the strategy is that of picking off just enough Democrats on various issues to build an ever-shifting coalition with the Republicans. The fifty Republicans in the House and 14 in the Senate would be joined by one group of Democrats who consider education reform a must, but may not agree with Hogan’s approach to cleaning up the Bay. Yet some Democrats may like that idea, but won’t budge on changing the gas tax – and so on and so forth. Just as long as Larry gets 71 votes in the House and 24 in the Senate, the means do not matter.

Because of the nature of how our state’s political process, the honeymoon for Hogan was barely existent. He had to have a budget mere hours after taking office, and some legislation he probably wouldn’t support was already being discussed in the General Assembly. Obviously Larry was working in a shadow government of sorts as he awaited inauguration, but once he took the reins that horse quickly accelerated to full gallop.

So while it’s not necessarily less government, at least Larry is working on making things more efficient and streamlined. Hopefully we can get it to such a level that it wouldn’t be missed when the reductions occur. That’s the next logical step.

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.

McDermott’s state of the state

While he is a freshman in the Maryland General Assembly, Mike McDermott has had to deal with the O’Malley administration for the last four-plus years as mayor of Pocomoke City – he used the experience to move on to his current job.

So I found his response interesting and I asked Mike if I could use it here. (I took the liberty to fix a couple minor grammatical errors in the meantime.) I told the Delegate I agreed with much of it, although I have a few more comments after his.

Today, the full body of Maryland’s General Assembly heard from Governor O’Malley about his vision for Maryland, and his interpretation of the past year. The Governor stated in his speech, “Everything has a cost…” Well, the question Marylanders are asking is, “How much?”

His proposed budget holds our deficit at $1.2 billion while actually increasing spending by over $2 billion. There are several fund raids conducted from the Transportation Trust Fund ($120 million) and the Chesapeake Bay Trust Fund ($90 million) with additional tax increases to replace the raided funds. At the same time, the governor plans to increase our debt through the issuance of bonds. This will further push our debt ceiling to the edge.

We cannot afford bonuses for all state employees ($750.00), nor the five additional paid holidays he is offering. We cannot afford to continue cutting Medicaid reimbursements while, at the same time, taking our enrollment up over a million Marylanders (20% of our population). We simply cannot afford to extend ourselves at a time when the revenues from our citizens are contracting.

Today the governor spoke about the state creating winners and losers when it comes to business and industry. If you are about “green” jobs, you’re a winner; if not, you’re a loser. When the state predicates tax incentives and government backed funding sources to favored industry, it is akin to the king extending the scepter to whomever he wishes. Wind farms may be a great idea, but they need to stand on their own as a business endeavor. When the governor talks about “investments”, he should be talking about the private sector, not tax dollars.

We heard about the governors desire to place a moratorium on septic systems in rural developments, with no regard of the chilling effect this could have on land values, private property rights, and development on the Eastern Shore. He stated that “where we eat, sleep, and live…” is affecting our environment as if this, too, is something the government should control.

The governor stated we were “moving forward”, while his budget anchors us to our indebtedness. He called us a grand “experiment in self government”, while he offers only additional regulations, fees, and taxes on the business community. He says, “It’s all about jobs”, as if the government is the one who creates those jobs. The “ghost of disconnect” continues to haunt Maryland policy.

The bottom line is the governor expressed more visible outrage over the recent power outages in Prince George’s County than he did about the dismal state of our economy, and our failure to address critical budget areas when time was of the essence.

Governor O’Malley wants us to move toward a “knowledge based” economy. Well, that begins with a wisdom based budget, and that was sorely missing from the State of the State Address I heard today.

Obviously McDermott looks at the budget mostly from the standpoint of fiscal conservatism, but the part of O’Malley’s address which stood out to me was the effort to ban the use of septic systems. Yesterday, he bleated about those devices, which:

“…by their very design are intend to leak sewage into our Bay and water tables.

You and I can turn around this damaging trend by banning the further installation of septic systems in major Maryland housing developments. This is common sense, this is urgently needed, this is timely, and for the health of the Bay we need to do what several rural counties have already had the good sense to do.”

That “good sense” is actually law mandated by the General Assembly, and passed over the objection of Delegates and Senators from both parties. In fact, such a ban would essentially halt residential development within the Bay’s watershed unless a municipality extends sewer lines to the new plat. (Of course, that’s the overarching goal of those who advocate so-called “smart growth” anyway.) The state already can’t pay for all those who have septic systems but are forced by regulation to install nitrogen reduction units, even though they promised to help.

So “investment” (read: taxpayer subsidy) in “green” jobs in other countries (where they make components for wind turbines and solar panels) are okay, but home construction jobs on the Eastern Shore are verboten. Is that the way it works, Governor?

Then again, he and the Democrats tend to believe in the “One Maryland” theory while I contend there’s actually at least three: the Eastern Shore has more in common with rural Delaware while the western end of the state has a mindset like the rest of Appalachia. It’s those along the I-95 corridor between Baltimore and Washington who are arrogant enough to believe the rest of the state should be like them – on the other hand, it’s my impression those of us on the Eastern Shore wouldn’t be all that unhappy if the Bay Bridge suddenly collapsed into the Chesapeake. Policy dictated to us from on high in Annapolis doesn’t fly well here – wonder why?

While Delegate McDermott probably already knew all he wanted to know before taking the job, he’s getting a firsthand look at the situation now.

By the way, I was hoping to get a second perspective on Mike’s remarks but haven’t received it yet. I’ll either add the remarks here or make a second post, depending on how I think they’ll work best.