By Barry Rascovar
Sept. 29, 2014– OUCH! That’s the sound coming from Anthony Brown’s campaign headquarters after hearing of a $405 million drop in expected state revenue over the next 21 months.
This is bad news for the lieutenant governor’s gubernatorial drive.
The shrinking revenue forecast not only buoys Republican Larry Hogan’s campaign, it powerfully reinforces Hogan’s central theme: Maryland’s budget is out of kilter and in need of serious overhaul.
Hogan received an unexpected boost last week from Democratic Comptroller Peter Franchot’s sharp critique of the state’s liberal Democratic spending policies.
At Wednesday’s Board of Revenue Estimates meeting, Franchot took to task the “What, me worry?” attitude being taken these days by Gov. Martin O’Malley and Brown when it comes to Maryland’s continuing revenue shortfalls.
Indeed, Franchot’s comments could be grist for future Hogan ads.
Ignoring Bad News
For example, the state comptroller took umbrage at the O’Malley-Brown administration’s Scarlett O’Hara approach (“tomorrow is another day”) toward bad economic news:
” . . . we need to accept that sluggish growth and challenging economic conditions have become our new normal. It feels like we sit at these meetings every quarter, hopeful and determined that ‘next year will be the year’ when the recovery takes hold and is felt broadly throughout the economy. Yet, another year has passed, and ordinary families and small businesses haven’t even recovered to where they were before the financial collapse. . . We need to recognize that hope is not an economic strategy.”
That’s a damning criticism aimed squarely at the governor and lieutenant governor.
Franchot laid out a few of the bleak economic numbers:
“Maryland’s 6.4 percent unemployment rate is higher than the national rate of 6.1 percent – something we’ve only experienced twice in the past three and a half decades. . . . In terms of wages – the oxygen working families need to survive – Maryland’s average wage growth was just 0.4 percent in the first quarter of 2014. . .
“Essentially, workers perceive that their take-home pay is headed in the wrong direction and the purchasing power for Maryland families is, in reality, diminishing.”
This is exactly what Hogan has been saying.
Maryland’s economy, Franchot notes, “didn’t grow at all last year – with a 0 percent GDP growth for 2013.”
That is an ominous indicator which the O’Malley-Brown team is blissfully ignoring. Why? Because it is politically unpalatable.
Hesitating to Act
Here’s the hard truth, according to Franchot:
“We simply can’t assume that we’re around the corner from returning to the way it was, and back to the decisions we could afford to make in Maryland as a result.”
Yet no one is rushing to close this new revenue gap in the state’s budget calculations and tighten up on state spending.
Brown doesn’t want to announce unpopular cutbacks during an election campaign; O’Malley would rather delay nasty decisions until he leaves office.
Brown is ignoring the reality that Maryland could face difficult budget years ahead that won’t allow for the raft of social programs he’s promising voters.
Franchot sagely put it this way:
“As state policymakers, we need to be smart in how we spend taxpayer dollars, recognizing that to invest in the things we need, we have to forego many of the things we simply want. . . “
This is what Larry Hogan has been preaching on the campaign trail, albeit in vague, superficial terms.
It is folly to assume, as Brown does, that there will be hundreds of millions, if not billions, of dollars available for his expensive campaign proposals. That list starts with a statewide pre-kindergarten program and tax breaks for veterans.
Neither may be affordable in the current economy.
Voters and Economics
But are voters listening? Do they understand that what Brown is promising them isn’t deliverable under the present sluggish economy Maryland confronts?
Do they understand that Maryland could face difficult times unless it reins in its borrowing and its overspending?
The public’s grasp of American economics isn’t very deep. Numbers tends to make people’s eyes glaze over. That’s what Brown is counting on.
Meanwhile, the Scarlett O’Hara approach to managing Maryland’s chronic structural deficit continues. Wishing that tomorrow will bring us blue skies and strong economic growth isn’t enough.
Franchot is right. Hope is not a viable economic strategy.