Hogan’s Budget Dilemma

By Barry Rascovar

Jan. 18, 2016 – Tumbling oil prices, a bear market for stock and 401(k) investors and a sharp economic pullback in China and other developing countries could wreak havoc in Maryland as Gov. Larry Hogan, Jr. prepares to release his budget for the coming fiscal year.

Even before lawmakers get a chance to analyze what’s in Hogan’s conservative spending plan, the state’s revenue assumptions for the next 18 months could be out of date.Budget balancingBudget projections made by the state’s Board of Revenue Estimates just a month ago have been eclipsed by the worst-ever start-of-the-year results on Wall Street, historic drops in oil prices and stock market losses totaling a staggering $2.5 trillion in just two weeks.

This bad news comes at a terrible time for Hogan. His budget already has gone to the printers. It’s too late to make adjustments. His fiscal blueprint could be out of sync with January’s realities.

Indeed, if this worldwide gloom persists, the modest economic growth anticipated by Hogan might prove optimistic. The governor’s spending and tax-cut proposals might have to be drastically reduced – even with a large surplus in the bank.

Maryland’s economy is tied to what happens nationally and internationally.

A sharp slowdown in China’s trade hurts the Port of Baltimore and BWI Airport. Ditto for the laggard economic activity in Europe and in emerging countries.

Too Much Oil

The oil glut is leading to 250,000 layoffs in the energy sector, which will mean less work for contractors, subcontractors and suppliers throughout the country, including Maryland.

Maryland’s income tax receipts will be hurt by the plunge in stock prices. Alarmed consumers, already unnerved by talk of terrorist attacks, could continue to rein in their spending, which hurts sales tax collections.

Economists aren’t yet predicting that international woes will lead to a second Great Recession.

But weak growth could make it exceedingly difficult for Hogan to carry out his pledge to cut taxes.

While the Republican governor will propose over $400 million in tax cuts in his address to the Maryland General Assembly this week, Democratic lawmakers aren’t likely to support them if economic conditions make those tax cuts unsupportable.

U.S. Resurgence?

The best news for Hogan would be if the current batch of bad news is replaced by a sharp and lengthy bounce-back on Wall Street and an uptick in consumer spending. The U.S. economy, after all, is in far better shape than the rest of the world.

Still, we live in an era of instant international linkage. What happens in China or France or Iran or Russia affects the U.S. economy. As journalist Thomas Friedman famously wrote, “The world is flat.”

Hogan has little, if any, control over Maryland’s overall economic well-being. He can’t stop the panicked selling on China’s stock exchange, or Iran dumping more oil exports on an oversaturated world petroleum market or a Republican Congress ratcheting down federal aid to the states.

Lower gas prices were supposed to stimulate consumer spending as drivers fill up their vehicles far more cheaply. Yet so far no such bump has occurred.

Low or No Growth

Shaun Driscoll, who manages T. Rowe Price’s New Era Fund, predicts low gasoline prices could persist for the next six months and the oversupply of petroleum might linger for a couple of years.

The U.S. could find itself in a sustained period of low growth or no growth. For Hogan, that would make tax cuts problematic not only this year but in the immediate future, too.

“Risks abound,” the state’s Board of Revenue Estimates warned last month, noting the nation’s economic outlook was “subdued.”

Those observations came before the history-making plunge on Wall Street and disappointing economic news from China.

Volatility around the globe and at home makes it tough for elected officials to accurately predict the future. Extreme caution may become the watchword as budget deliberations begin in Annapolis.

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Barry Rascovar’s blog is www.politicalmaryland.com. He can be contacted at brascovar@hotmail.com.

Hold Off on Internet Hotel Tax

By Barry Rascovar

Jan. 12, 2016 – Vetoed bills are on the minds of all 188 members of the Maryland General Assembly as they begin their annual 90-day session in Annapolis. Indeed, it’s the first order of business on Wednesday.

Among the most controversial is a vetoed bill concerning a dispute between large hotel operators, like Bethesda-based Marriott and Rockville-based Choice Hotels, and internet travel companies. The fight is over tax payments to the state by those internet companies when they book in-state hotel rooms.

The vote to override Hogan’s veto puts three “swing” Democrats with centrist records on the hot seat — Sen. Jim Mathias of the Eastern Shore and Sens. Kathy Klausmeier and Jim Brochin of Baltimore County.

All three Democrats come from districts where anger over high taxes led to large Hogan victories in 2014 with margins topping 60 percent for the Republican governor.

Now Democratic leaders want the three senators to go against Hogan on the internet hotel tax bill. For them, that may not be the wisest political move, especially on a piece of legislation viewed by many constituents as a tax increase.

Travelocity

The big hotel operators want travel companies to pay taxes on the fees they charge customers when travelers book Maryland hotel rooms through an intermediary. (The internet sites already add the state sales tax to the negotiated rate going to the hotels.)

Gov. Larry Hogan, Jr. vetoed this bill.

He did so for the most sensible of reasons: Maryland Comptroller Peter Franchot already is suing an internet company, Travelocity, over what he claims is $6 million in unpaid taxes on those service fees between 2003 and 2011.

Hogan’s Message

“The General Assembly should respect the long-standing practice of not passing legislation that would directly affect matters being litigated in a pending court case,” Hogan wrote in explaining his veto last May.

Why in the world would state lawmakers interfere in a court case brought by the state’s comptroller?

Why not do what nearly all prior General Assemblys have done and let legal proceedings play out before taking action?

The answer is partisan politics. Democratic leaders want to show Hogan who’s in charge by overturning the governor’s vetoes.

On this one, pragmatism and practicality should prompt lawmakers to let well enough alone until there is a definitive ruling from the Maryland Tax Court.

Hurting Ma and Pa

It’s a complicated issue. Legislative controversies usually are.

For instance, the hotel booking tax could hurt local Ma & Pa travel agents, who are having a hard time as a result of shrinking commissions from hotels and other destination sites.

The fees they charge customers are their profit margin. If those fees get taxed, it could mean staff reductions to make up the difference.

Besides, they already pay local and state income taxes on revenue derived from those fees.

The new sales tax also could have the unintended consequence of harming small businesses such as tour operators, event planners and service providers, who might be forced to pay a new tax.

Fewer Bookings?

Industry data indicates that for every percentage increase in hotel rates, there is a negative two percent drop in bookings. That could be huge in Maryland if the legislature overrides Hogan’s veto. It could easily wipe out the revenue gain, estimated at $3 million to $4 million, from taxing service fees on third-party hotel bookings at a rate of six percent.

Large hoteliers say this tax “levels the playing field.” Yet it also forces third-party booking agencies to hike their prices to consumers and thus become less competitive with the hotels’ in-house booking operations.

The biggest booster of the new tax is Marriott, which has enormous clout among legislators from Montgomery County.

Ironically, Marriott was a big beneficiary in 1999 of state tax breaks topping $58 million in exchange for keeping its headquarters in Maryland. Part of the deal called for Marriott to expand its HQ staff by 700. Instead, there’s been a major workforce reduction.

Think how much the state’s tax coffers would have benefitted if Marriott had followed through on its 1999 commitment.

Consumers Pay More

Those opposing this bill say this amounts to a new tax, which it definitely is for third-party hotel booking services. You can rest assured most of this tax increase would be passed along to customers booking lodging in Maryland through them.

As noted, this is not a cut and dried issue.

Should all services fees be subject to the state sales tax, or just fees charged by internet hotel booking companies? Should local travel agents and travel-related companies be exempt from the tax?

The legislature is acting prematurely. It should await a Tax Court decision. Then it should form a work group to study the full, wide-ranging implications, including the mixed responses to this problem in other states.

All that points to a go-slow approach.

When SB 190 comes before the Senate and House of Delegates on Wednesday, lawmakers should avoid a hasty decision. There’s no need to rush to judgment – unless bitter partisan politics overrules common sense.

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2015’s ‘Dumb & Dumber Award’

By Barry Rascovar

Before we get too far into the New Year, let’s dispense with the Maryland political maneuver deemed as the low point of 2015: Civil rights advocacy groups waited till the very end of the year to file the worst and most counter-productive legal complaint that’s been filed in a long, long time.

The groups, including the NAACP Legal Defense and Education Fund and the American Civil Liberties Union, are essentially suing Gov. Larry Hogan administratively for daring to kill the $2.9 billion Red Line rapid rail route through Baltimore. Their reasoning: Hogan made a racially discriminatory decision that harms African Americans in Baltimore City.Red Line logoNot only is the complaint historically inaccurate, it is pointless and damaging to their cause. For this publicity-seeking waste of time and energy, the groups’ complaint richly deserves 2015’s “Dumb and Dumber Award.”

Leap of Logic

Republican Hogan has been heavily criticized for cancelling the Red Line project, but racial bigotry isn’t one of the charges that sticks.

Not only is it a stretch to make that wild accusation, there’s no evidence to back up the charge.

Did Hogan sit in his office plotting the death knell of the Red Line so he could keep African Americans “in their place”? Did he divert most of the Red Line money to rural and suburban highway projects as a discriminatory move against blacks?

The accusation is preposterous on its face.

Protesters even claim the Red Line was a vital piece of the state’s plan to remedy racial disparities, and that rejecting the Red Line was part of an historic pattern of racially imbedded transportation decisions by state governors.

Pure hogwash.

Red Line History

Never once in all the years I have reported and commented on the Red Line project have I heard such a distorted argument.

Never once did the Democratic O’Malley administration or the Republican Ehrlich administration make the argument that they wanted to proceed with the Red Line because of its civil rights implications.

Never once did the Hogan administration even hint at a racial motive for stopping the Red Line in its tracks.

The civil rights groups are far, far off-base.

Yes, cancelling the Red Line, and the $900 million in federal funds, ranks as the most boneheaded decision of the century (so far) in Maryland.

Yes, it will harm African Americans in Baltimore – but also whites, Hispanics and Asian-Americans in both Baltimore City and Baltimore County.

But Hogan’s move was largely a political decision. Racial discrimination didn’t enter into the discussion.

Not Worth the Cost

He did it because he’s a rigidly conservative Republican who hates big government spending projects that primarily benefit Democratic strongholds. He didn’t feel this controversial construction undertaking was worth the huge outlay of state funds.

He wrongly called the Red Line a “boondoggle” because in his mind any oversized project that won’t help his voter base in rural and suburban Maryland isn’t a priority.

He called the Red Line “unaffordable” even though it clearly could have been downsized and revamped to make it more cost-efficient and make it fit into the state’s long-term transportation budget.

Nixing the Red Line was decided by Hogan long before he took office.

He promised during the 2014 campaign to kill the Red Line. Race had nothing to do with it; conservative ideology had everything to do with his decision.

The civil rights groups also make the argument Maryland has a long history of racially discriminatory transportation and housing decisions.

Excuse me, but how did housing get into this argument over building the Red Line?

Not in My Neighborhood

There’s no doubt housing discrimination was at play in the Baltimore region over the past 100 years. My former colleague at The Baltimore Sun, Antero Pietila, brilliantly presents the case against the federal, state and city governments for their racially biased housing policies in his book, “Not in My Neighborhood.”

But the issue here is transportation, not housing.

Where did the civil rights groups get the idea that building Baltimore’s Central Light-Rail Line and the region’s Metro Line were purposely designed to discriminate against blacks?

That’s buncombe. It rewrites history to fit the groups’ distorted, conspiratorial world view.

Marvin Mandel built the Red Line not to serve white Marylanders but because there was a right-of-way available from the old Western Maryland Railroad that ran through Northwest Baltimore City and Baltimore County.

Today, Baltimore’s first mass-transit rail line well serves areas that are both black and white, as well as Hispanic.  Even the line’s county stations serve a very large and growing African American community.

Key Right-of-Way

William Donald Schaefer built the Central Light-Rail Line because there was an abandoned right-of-way available — the former Northern Central Railroad route. It was a cost-and-efficiency engineering decision. The goal, then as now, was to make public transportation to jobs, stores and entertainment easier for EVERYONE – especially those living in Baltimore City.

Neither Mandel nor Schaefer posed as George Wallace seeking to deny blacks better public transportation. Quite the opposite. Race was never a factor in their decisions to build those routes, plain and simple. It did not enter into discussions.

There’s no question Baltimore lacks quality public transportation. There’s no question the city and the state should have done a better job anticipating the need for a comprehensive, coherent and connected mass-transit system that gets low-income adults to job sites.

It’s been a huge failure by state and local officials.

You can blame it on politics, both in Annapolis and in Washington. But you cannot blame Baltimore’s sorry transportation situation on racial discrimination.

Civil rights groups are wasting time and money on this canard. There are important civil rights issues confronting Baltimore at this time, but not the Red Line’s demise.

Fait accompli

The civil rights groups’ complaint to Washington bureaucrats contains another huge leap of illogic: It’s too late to undo what’s been done.

Hogan killed the Red Line. It’s a fait accompli. The federal government is redistributing that $900 million to other cities that weren’t stupid enough to turn their backs on such a huge federal gift.

You can’t revise history to satisfy your wishes. The Red Line money from Washington is gone. A civil rights complaint, even if upheld, won’t make that money reappear.

Besides, who’s to say the Red Line would have solved Baltimore’s discrimination woes? Since when did these civil rights groups become experts in the most advantageous public transportation modes for Baltimore residents of color?

How do they view Hogan’s decision to spend $135 million on improving Baltimore’s sub-par bus system? That’s a whopping amount of money for such an undertaking that will primarily benefit the city’s lower-income workers and residents.

Is that part of the discrimination conspiracy, too?

What a distraction.

These civil rights groups should be ashamed. Demonizing Larry Hogan for unfounded civil rights affronts is a terrible mistake that politicizes the legitimate work of those groups. It polarizes the situation and needlessly antagonizes the one person who holds the purse strings for future transportation projects.

The complaint hurts, rather that helps, Baltimore City in its appeals to Annapolis at a time when the city needs all the help it can get.

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O’Malley’s Reality Check

By Barry Rascovar

Jan. 6, 2016 – If you’re running for any elective office, you’d better have thick enough skin to accept occasional humiliation.

That’s especially true for those in the presidential primaries.

It may be the most important job in the world but those in the running have to expect moments of embarrassment that for ordinary folks would be ego-shattering.

O'Malley's Reality Check

Former MD Gov. Martin O’Malley’s Iowa campaign stop yielded one undecided voter named Kenneth

Martin O’Malley has had his share of deflating moments recently.

The former Maryland governor continues running in the low single digits (except for one Iowa poll). He’s not being taken seriously as a true challenger to Hillary Clinton.

Right after Christmas, O’Malley beat his rivals into the field in Iowa, addressing 100 people at the Des Moines Social Club, nearly all of them undecided voters, not O’Malley supporters.

The next day, O’Malley braved a snowstorm to meet with five undecideds in Webster City, 12 in Iowa Falls and an undecided, bearded voter named Kenneth in Tama (population 2,800).

Positive Spin

O’Malley tried to make light of these tepid turnouts. It did, at least, get him much-needed publicity, though it was not at all positive.

The ex-governor tried another approach by asking Sen. Bernie Sanders, who does have a legitimate shot at winning the nomination, to ignore the Democratic National Committee and stage a two-man debate that would garner more media attention.

But Sanders declined. He’s not about to give O’Malley a chance to strip away some of his liberal support. Chalk up another stumble for the O’Malley campaign.

Then came bad news from Ohio, a pivotal election state. O’Malley’s troops botched the petition drive needed to get on that state’s primary ballot.

He only needed 1,000 signatures of qualified Ohio voters. He managed to sign up just 772 legitimate voters – out of some 11.5 million in the state.

Now that’s humiliating.

No wonder O’Malley isn’t being taken seriously.

Low on Cash

As of Oct. 1 he had just $805,000 in his campaign account – versus $27 million for Sanders and $33 million for Clinton. The two front-runners raised another $71 million combined through year’s end.

Even with limited resources, O’Malley can muddle through Iowa and New Hampshire with a bare-bones, retail campaign. It will keep his name alive, at least.

But sometime after Feb. 9, if O’Malley receives the expected drubbing in those two states, he should fold his camping tent. The outlook is even bleaker in the next two states, Nevada on Feb. 20 and South Carolina on Feb. 27, where O’Malley is scoring close to zero (1 percent in Nevada and 2 percent in S.C.).

O’Malley must decide when to gracefully withdraw and when to endorse the eventual winner, most likely Hillary Clinton.

If he persists in sticking it out and fails miserably in Nevada and South Carolina, does he damage his future political aspirations? Does he become a figure of mockery, a hopeless presidential wannabe along the lines of ex-governors Mike Huckabee and George Pataki?

It shouldn’t be a tough call.

Limping Along

O’Malley has served his purpose with his determined campaign in the first two early primary states. He’s set out his liberal agenda for Democrats to see.

But he will need a political platform to keep his presidential hopes alive in four or eight years. That might happen if he wraps up his campaign in another month or so and then spends the rest of 2016 as a Clinton surrogate making speeches around the country.

Martin O’Malley thought he could catch fire as the Democrats’ liberal alterative to the more moderate Clinton. But Bernie Sanders stole his thunder and made O’Malley an also-ran.

The “O Say Can You See” campaign will continue to limp along gamely for another month. But O’Malley could face the inevitable in five or six weeks and make a pragmatic decision to call it quits.

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Dump Those Hateful Lyrics

By Barry Rascovar

Jan. 4, 2016 – I strongly disagree with “politically correct” crowds that frequently seek to re-write history for their own present-day purposes. But when it comes to the hateful lyrics of Maryland’s official state song, I say quite emphatically, “Dump them.”

The words to “Maryland, My Maryland,” composed by an emotionally wrought Rebel sympathizer, James Ryder Randall, are despicable.

Dump Those Hateful Lyrics

James Ryder Randall

Abraham Lincoln is called a despot. Those supporting the United States rather than the Confederacy are called “Northern scum.”

The poem is a blatant call for Maryland to separate from the U.S. and join the Confederacy.

It’s a blood-thirsty state anthem, written in New Orleans by the 22-year-old Randall following the first casualties of the Civil War during Baltimore’s Pratt Street riot of April 1861.

Rebel Call to Arms

Thus the words:

“Avenge the patriotic gore

That flecked the streets of Baltimore,

And be the battle queen of yore, Maryland! My Maryland!”

Randall, who spent most of his adult life far from Maryland in Augusta, Georgia and other Southern outposts as an editorial writer, quickly became a hero among Southern separatists.

His words, set to a catchy German college tune that we know today as “O Tanenbaum” or “O Christmas Tree,” caught on with Rebel soldiers and supporters.

Why such mean-spirited, blood-curdling words would come to represent the state of Maryland – whose citizens were decidedly mixed in their views of the Civil War – remains cloaked in mystery.

Adopting a State Song

Republican Gov. Harry Whinna Nice vetoed a bill making Randall’s lyrics the state song in 1935. He felt the words were inappropriate. Nice was on the mark.

But the next governor, conservative Democrat Herbert R. O’Conor, went along with legislators, especially those from rural parts of Maryland with Southern sympathies. O’Conor signed the bill making “Maryland, My Maryland” the state song in 1939.

Big mistake.

Other states have dumped offensive lyrics in their state songs. Florida did it twice (“Swanee”), Kentucky did it (“My Old Kentucky Home”) and so did Virginia (“Carry Me Back to Old Virginny”).

Yet for 20 years, Maryland legislators have refused to get rid of lyrics that don’t come close to representing the state’s citizens. The words are hateful, viciously un-American and written to encourage Maryland to secede from the United States.

It is past time to reverse that dreadful decision by the 1939 General Assembly and Governor O’Conor.

Correcting a Mistake

This is not, as Gov. Larry Hogan, Jr. put it recently, “political correctness run amok.”

He needs to re-think his position. Randall’s lyrics never should have been allowed to represent Maryland’s citizens. Does he really want school children singing those words?

Hogan’s right that the “PC Crowd” frequently careens out of control trying to revise history to further their own current-day ideological goals.

Taken to an extreme, this would mean tearing down the Washington Monument and re-naming the District of Columbia because George Washington owned hundreds of slaves, frequently ordered severe whippings and refused to liberate them until after his death.

It would mean tearing down the Jefferson Memorial and removing Thomas Jefferson’s face from American currency because he, too, owned hundreds of slaves and conceived children with them.

It would mean melting down the austere statue of Roger Brooke Taney on the grounds of the Annapolis State House because of his refusal as Chief Justice of the Supreme Court to abolish slavery. Taney’s other sensible and forward-thinking Supreme Court opinions, and his extremely important work in Andrew Jackson’s Cabinet, would be ground into dust.

Byrd Stadium No Longer

The PC Crowd already had its way at the University of Maryland, College Park, where the name of Harry C. Byrd was erased from its football stadium – even though Byrd, who tried vigorously to keep Negroes out of University of Maryland colleges, arguably did more to turn UM into a first-rate state university than any of his successors.

“You can’t change history, and we’re not going to be able to rewrite history,” Hogan said. That’s true. The past is water under the bridge, it is time that already has ticked off the clock.

We can, though, learn from mistakes of the past. We can glean a greater understanding of the flawed decisions of former leaders and why those mistakes happened – so that we, in the present, don’t make similar mistakes.

As philosopher George Santayana wrote in 1924, “Those who cannot remember the past are condemned to repeat it.”

Lessons from Yesterday

Hogan should learn from Governor O’Conor’s mistake in 1939. He should review and learn from Governor Nice’s courageous veto in 1935.

There’s nothing sacred about a state song, especially one that fiercely and savagely promotes secession.

It makes sense to follow the suggestion of an advisory panel to replace Randall’s odious lyrics with words that better represent Maryland’s history and its citizens’ good intentions.

Overturning a legislative and gubernatorial mistake made 77 years ago isn’t a matter of political correctness.

It’s common sense that ought to be supported on a bipartisan basis in the State House.

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Barry Rascovar’s blog is www.politicalmaryland.com. He can be reached at brascovar@hotmail.com

Hogan’s Happy Holidays

By Barry Rascovar

(From The Community Times (a publication of the Carroll County Times)

Dec. 23, 2015

What a whirlwind year this has been for Gov. Larry Hogan, Jr. He’s seen phenomenal highs and
lows.

The year’s emotional peak came with his swearing-in as Maryland’s 62nd governor. The low point came when Hogan announced he had been diagnosed with advanced non-lymphoma Hodgkin’s disease that required prolonged and extensive chemotherapy.

As we near the end of 2015, Hogan has every reason to celebrate the holidays with joy and optimism.

Hogan's Happy Holidays

MD Gov. Larry Hogan, Jr.

Hogan’s cancer is gone, oncology specialists at the University of Maryland Medical Center have told him; his hair is slowly growing back and his future looks sunny.

On the political front, Hogan goes into the holidays with high approval ratings. For a Republican governor in a heavily Democratic state, that is heartwarming.

A note of caution is in order, though, at this time of good cheer and warm wishes.

Hogan’s high approval could be fleeting. Governors always see their ratings sink during legislative sessions when there’s controversy swirling around executive department proposals.

So Hogan can expect his numbers to drop when the General Assembly convenes next month.

No 2016 Honeymoon

This will be Hogan’s second legislative session. The first was pretty much a honeymoon for the new chief executive — except for a nasty tug-of-war over education funding. This time, Democratic leaders will be more aggressive in opposing Hogan initiatives. There won’t be an extended honeymoon.

Hogan has to keep in mind that Democrats will be far more anxious to criticize the Republican governor and block his proposals.

They don’t want to give him victories that might lead to his re-election.

So this winter could be a rocky period for the governor as Democratic leaders in the General Assembly try to gain the upper hand.

Hogan needs to remember that the most recent Republican governor also had high approval ratings through most of his term — only to lose his re-election bid.

At a similar stage of his governorship, Bob Ehrlich enjoyed very strong poll numbers, yet it wasn’t enough to win him another four years in office.

Inevitable Push-back

Next year could be a pivotal year from Hogan’s governorship. He’s had time to figure out how to run this huge ship of state. He now knows what he wants to change.

Streamlining government sounds easy in principle. Getting rid of costly and pointless regulations couldn’t be that hard, right?

Think again.

For every action Hogan takes to eliminate government rules and regulations, there will be an equal and opposite reaction from politicians and groups that fought hard to put those mandates on the books.

Similarly, if Hogan follows up on recommendations by his task force to reorganize state departments and agencies, he can expect fierce opposition.

Quarrels or Cooperation?

The governor will be tested on his ability to work cooperatively with Democrats in the legislature. Hogan got into a needless quarrel last time over education aid and then refused to compromise.

If the same things happens in 2016, there could be gridlock in Annapolis.

Hogan has a lot going for him right now. His public fight to overcome cancer won him countless admirers. He cut highway tolls — a popular move. He has avoided hot-button social issues that could stir an uprising against him.

But can he make headway on his key issues, such as reducing government spending and lowering taxes? Those will be tough to sell to Democrats, who see a need for more, not less, help from government for society’s underclass.

This year turned out to be a blessed one for Larry Hogan. Politically, though, he faces some daunting challenges in the year ahead.

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Hogan’s Spending Tightrope

By Barry Rascovar

Dec. 21, 2015 – Larry Hogan, Jr. is the ideal governor to take on the difficult task of balancing the need for stronger economic growth in Maryland while at the same time slowing government spending.

Republican Hogan is a committed conservative who gained election by pledging to cut the fat out of state government and lower taxes (eventually).

But Hogan also was elected because he is a pro-business executive intent on slashing business regulation and making Maryland more business-friendly.

The problem is that Maryland isn’t bouncing back strongly from the Great Recession. Tax receipts in Annapolis from consumer-related spending (the sales tax) are still sinking. Taxes from personal income are barely nudging forward.

It’s a sluggish state economy with slow employment growth, little wage growth and new jobs being created at a disappointing pace.

Weak Recovery

November’s unemployment report confirmed Maryland’s agonizingly slow recovery.

Since early summer, the jobless rate has come down but remains above the national average. The number of people out of work is largely unchanged over the past six months. New jobs rose just 16,000 in that period.

The situation is far better than the 7.7 percent unemployment of 2010, yet Maryland continues to lag in job-creation.

All this points to the need for a cautious approach in the next state budget. Revenue growth remains modest. Hogan’s cabinet will have to deliver on the governor’s mandate to trim the size of agencies without harming services that aid Maryland’s underclass.

Restraining government expenditures isn’t all good news, though.

Cutting out state jobs and lowering spending can boomerang and end up harming Maryland’s economic recovery.

It gets tricky for the governor.

Large Surplus Helps

He’s lucky there’s a projected $561 million surplus for next year’s budget. He isn’t likely to dip into that fund to enlarge existing programs as Democrats want him to do.

Indeed, Democratic lawmakers are calling for an expansion of state spending by nearly 5 percent, even though that could be risky.

Hogan’s budget chief assures us the governor will be well under the Democrats’ affordability limit.

But how do you hold down government spending while simultaneously pumping more dollars into jobs and economic growth?

It can be done.

Hogan needs to take one important step: Turn that $561 million surplus into capital spending to build worthwhile projects.

Jobs and Growth

By using surplus cash in this way, Hogan can create good-paying jobs in the construction trades and stimulate growth through the purchase of construction-related goods and services.

Using cash instead of state bonds serves another important purpose. It relieves pressure on Maryland’s costly capital bond program and lowers the state’s expenses not just in 2016 but for the next 15 years.

Paying cash for $500 million worth of new state buildings, rather than issuing bonds, is just what the state needs right now.

A large and continuing pay-as-you-go state construction program would eliminate a huge amount of future debt. It would trim Maryland’s long-term structural operating deficit by a substantial margin.

There’s an added bonus in a large “pay-go” construction program if it is focused on buildings that can lead to long-term economic growth.

Hogan can fortify the Baltimore area’s importance as a generator of health and technology advances (and jobs) by supporting a third health-sciences research tower at the University of Maryland, Baltimore; a life sciences building at UMBC, and a behavioral and social sciences building at Morgan State University.

Constructing a $100 million bioengineering building at the University of Maryland, College Park would do the same thing in the Washington suburbs.

Spurring Economic Growth

A cash investment of roughly $300 million in these science-related structures would be a wise use of the surplus – no interest payments or principal payments in future years.

The economic-development potential tied to such research and education-related buildings could spur job growth in key industries for years to come.

Hogan is walking a tightrope in trying to trim state government’s size and expenses while simultaneously enhancing Maryland’s economic-growth prospects.

If he uses the state’s projected surplus strategically, he can achieve equilibrium that might achieve both goals.

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Education Politics

By Barry Rascovar

Dec. 14, 2015 – He masks it well, but Gov. Larry Hogan, Jr. plays a good game of partisan politics. Behind that smile and friendly voice is a fierce Republican eager to further the conservative cause.

Education is a prime example of Hogan’s conservative partisanship trumping over sound public policy.

First, he needlessly nixed $68 million in education aid to 14 high-cost subdivisions, basing his action on the false premise that this money was needed to bolster the state’s pension fund. (The money instead sat unused in the state treasury.)

He tossed a bunch of moderate non-partisans off the Baltimore County school board and named one replacement who is an outspoken social conservative with views on public education that are far from mainstream.

Then he announced a surprise gift of $5.6 million to three Republican-voting counties to help them with their loss of state funds due to shrinking enrollment.

That announcement was bogus, too.

No Done Deal

Hogan is talking as though he can write a check to the three counties – Carroll, Garrett and Kent. He can’t.

In reality, he’s only putting a request for this appropriation in his next budget, due in January. It will be up to the Democratic General Assembly to determine if Hogan’s “gift” to three of 24 school systems is warranted.

It’s highly unlikely Hogan’s maneuver to aid just the three Republican counties will be approved as submitted.

Moreover, this funding from Hogan is only a temporary, one-year sop to the three Republican counties. It does nothing to solve their long-range education budget woes caused by too many school buildings and a dwindling number of students.

But the governor got raves from some Republican politicians and angry parents in Carroll County, who have been waging a concerted effort to keep three schools open, despite the fact that flat migration and slowing birthrates has led to a 7 percent drop in school enrollment, with more losses expected over the next five years.

Education Politics

Declining enrollment in Carroll County schools poses dilemma.

Hogan’s aid plan merely kicks the proverbial can down the road – the very same tactic Candidate Hogan railed against when attacking the O’Malley-Brown administration during last year’s campaign.

Carroll’s Conundrum

Following lengthy studies and deliberations, Carroll’s school superintendent recommended closing three under-capacity schools next fall and possibly two more later. This would save at least $5.2 million. He wants to address $14 million in unmet needs within the school system caused by the county leadership’s refusal to raise more local tax dollars for education.

Hogan is pandering to a few of Carroll’s Republican legislators, who want the state to bail them out of this education dilemma of their own making. The cold, hard reality is that maintaining a quality school system is a costly proposition for local governments.

The option they sought to avoid: Closing no-longer-needed schools, which are expensive to maintain. Such a move is intensely unpopular with those that are affected – parents and their children.

But Carroll’s school board refused to take Hogan’s bait. Members recognized they were being offered fool’s gold. They understood this would only add to the anguish and costs.

A true conservative wouldn’t play this type of political game.

Instead, a true conservative would let the downsizing (or “right-sizing”) commence so the school system spends its limited dollars more wisely and efficiently.

Isn’t the conservative approach espoused by Hogan all about eliminating wasteful government spending?

Longer-range Perspective

Rather than taking a partisan, piecemeal and temporary approach to this problem, why not examine the need to make long-range changes in Maryland’s school-aid formula?

Schools with declining enrollments shouldn’t suffer such immediate and deep aid cuts. That’s a flaw in the state’s education formula. Garrett County, impoverished and isolated, is a prime example of how this portion of the formula unfairly harms jurisdictions most in need.

At the same time, other parts of the formula need fixing. Baltimore City is being penalized because its property wealth grew last year due to waterfront developments. But that doesn’t necessarily translate into more local money for schools.

There’s an even bigger question not being discussed.

With the state likely to show a huge surplus in January, isn’t it time to take a bipartisan look at possibly raising Maryland’s per-pupil spending as the state’s economy gains momentum?

A panel is studying changes in the school-aid formula, with its final report due next fall. Republicans need to open their minds to supporting a future increase in state funding if they truly want to help schools in Republican counties.

Partisanship won’t disappear, though. We can expect a major tug of war on this issue starting in January and extending through the next gubernatorial election.

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Emily’s Mistake?

By Barry Rascovar

Dec. 7, 2015 – What in the world was Emily’ List thinking when it threw $1 million into the Maryland Senate primary race for a candidate who could be an easy mark for Republicans next November?

Why would the women’s political empowerment group try to defeat a much stronger Democratic candidate who has an unblemished pro-choice record and strong support from elected female leaders in Maryland and women’s rights advocates?Emily's Mistake

It’s a baffling call, especially in an election season where a $1 million advertising blitz could make a huge difference in a number of pivotal general election Senate races around the country involving other Democratic, pro-choice, female candidates.

Emily’s List early on endorsed Rep. Donna Edwards of Prince George’s County for the Senate seat held by Sen. Barbara Mikulski, who is retiring after next year’s election.

Edwards is running against Rep. Chris Van Hollen of Montgomery County, who has a big lead in the most recent poll, the vast majority of endorsements from elected Democratic officials and a solid corps of female supporters, including the former national board chair of NARAL, a leading pro-choice advocacy group.

Million Dollar Blitz

Yet Emily’s List insisted not only on snubbing Van Hollen’s two decades of solid pro-choice support but then decided to become an issue in the Democratic primary race with its $1 million Edwards ad campaign.

It’s an independent expenditure committee ad campaign, which by law means Emily’s List cannot coordinate its activities with the Edwards camp. But the obvious similarities of Edwards’ campaign pitch and the Emily’s List ad is striking and raises concerns.

Even more troubling is Emily’s List’s attempt to target its ad to an African-American audience, with an obvious African-American narrator proclaiming Edwards will “work for us.”

If the same language had been used in support of a white candidate, there would be hell to pay – and rightly so.

What’s so odd about Emily’s List’s love affair with Edwards is that her victory in the April 26 Democratic primary would be a gift from heaven for Republicans.

While Edwards has a legitimate shot at winning on April 26, in the general election she might not be the favorite, even in heavily Democratic Maryland.

Wider Support

That’s not the case with Van Hollen, who enjoys far broader statewide support than Edwards.

Republicans are hoping for a repeat of Larry Hogan’s upset win in the governor’s race last year. He defeated Lt. Gov. Anthony Brown, who lacked broad statewide support among Democrats, independents and elected officials.

If either of the two GOP front-runners, Del. Kathy Szeliga or Harford County Executive Barry Glassman is nominated, they could duplicate Hogan’s success if Edwards is the Senate opponent.

Both are good campaigners who want to come across as smiling, Hogan-esque figures.

Edwards, on the other hand, is a lightning rod for controversy. Her hard-edge political approach is far to the left of the Democratic center, she does not work well with her fellow politicians and she often has forgotten to tend to the services demanded by constituents.

In contrast, Van Hollen has spent two decades networking within Maryland’s political establishment. He’s popular with his colleagues and has worked relentlessly to pass meaningful legislation rather than showboat on behalf of liberal causes.

Choice Supporters

The ultimate irony is that Van Hollen and Edwards are on the same page when it comes to defending abortion rights. There’s no difference in their level of support.

That’s why Emily’s List’s $1 million worth of aid for Edwards is so puzzling.

It may not have much of an impact, though.

Far more valuable may be Van Hollen’s endorsement by a key labor union, SEIU, which redrew its prior support for Edwards in previous elections.

One SEIU official said Edwards had turned her back on the labor movement after SEIU helped get her elected in 2008.

Union Strength

SEIU brings considerable on-the-ground organizational muscle to Van Hollen’s campaign.

The labor union works hard to get out the vote for its endorsed candidates. Moreover, the core of SEIU’s 40,000 members live in areas of the state Edwards needs to win big-time: Baltimore City, Baltimore County and Prince George’s County.

That’s one reason SEIU’s endorsement of Van Hollen is so meaningful.

It’s surprising that Emily’s List didn’t look at the bigger picture, both in Maryland and nationally, before tossing $1 million into its Edwards advertising effort.

The group’s decision could turn out to be a very costly Pyrrhic victory.

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Refugee Politics

By Barry Rascovar

Nov. 30, 2015 – Playing to the public’s worst fears is the thing to do if you’re a Republican politician these days, be it Maryland Gov. Larry Hogan Jr., Donald Trump, Ben Carson, Sen. Marco Rubio or Sen. Ted Cruz. It boosts your poll ratings.

Panic-mongering is in vogue inside the GOP.

Refugee Politics

Trump approves of beating up dissenters at his events, torturing Muslim terrorists, barring all Syrian refugees from this country, making U.S. Syrians register (but no yellow badge sewn to their clothing) and closing U.S. mosques.

Carson also wants to look at closing mosques, forcing Muslims to register and carry a special ID that notes their religion. He suggests suspected Muslim bad guys deserve the same fate as “a rabid dog.”

Rubio wants to shut down any place where Muslims might conspire – mosques, cafes, diners and internet sites. No Syrian refugees would be allowed in the U.S. He even invented a new adjective to describe our dire situation: “civilizational struggle.”

Cruz wants to bar Middle Eastern Muslims, especially Syrian Muslims (97 percent of the country’s population) but he’d let the U.S. take in Christian Syrians because “Christians are being crucified right now.”

Anti-Refugee Governors

Xenophobia and Islamophobia dominate GOP rhetoric – even on the state level. Hogan joined fellow Republican governors in announcing he’d refuse to accept Syrian refugees in Maryland who are fleeing the ISIS-Assad violence for fear they’d be terrorists.

He and the other GOP governors politicized the issue by asserting the Obama administration does a slipshod job vetting these refugees.

It would have helped if Hogan first had checked his facts. The vetting process is rigorous and takes 12 to 24 months.

But Hogan and the other GOP governors don’t care about facts. They’d rather put out false allegations and keep saying they’re true.

Hogan also decided to ignore another simple fact: He has no power to stop the president from re-locating Syrian refugees in Maryland. He can’t close Maryland’s borders.

Democrats Respond

Indeed, Baltimore Mayor Stephanie Rawlings-Blake quickly announced she wants the president to bring refugees to Baltimore. Montgomery County Executive Ike Leggett and the entire County Council did the same thing. Sure, these were political slaps at Hogan, but it served to illustrate the widely divergent views on refugee politics between Democrats and Republicans.

A total of 43 Syrian refugees have previously re-settled in Baltimore. Not one has been revealed as a terrorist. They have been assimilated into the community without problems.

Should they be deported for their religious beliefs or where they come from?

Hogan needs to clarify his position and explain precisely why this new batch of refugees, most of them women and children fleeing ISIS-Assad violence, are so dangerous to the welfare of Maryland citizens.

While Hogan’s anti-refugee stance puts him in lockstep with his fellow Republican governors, it is hardly what one would expect from the husband of a Korean immigrant.

Immigrants are especially sensitive to the plight of other people fleeing violence and religious oppression who see America as a safe harbor where their children can have a better life.

Hogan would do well to read carefully a letter he received from state Del. Kirill Reznik of Montgomery County on this topic.

Fleeing Oppression

Here’s what Reznik wrote in his pre-Thanksgiving Day letter:

“In the late 1970s, my family was granted refugee status to come to the United States from the country I was born in, the Soviet Union. You might recall it was the height of the Cold War and the Soviet Union was our mortal enemy.

“History tells us that the Soviets had over 40,000 nuclear warheads pointed at the United States, a far deadlier prospect than anything [ISIS] can offer. And yet, we came. Maybe it helped that our skin was white and our religion was Judaism. Nevertheless, the suspicion leveled at us when we arrived – our motivations for coming, our loyalties to our former country – was something that even a 5-year old boy clutching his mother’s skirt as she went for job interviews at the local diner could feel.

“History also teaches us that this is not the first time that we, as Americans, have betrayed our promise to the world when we accepted the Statue of Liberty as a gift from our French friends. We told the world to ‘give me your tired, your poor, your huddled masses yearning to breathe free.’ I guess we added the asterisks later. . . .

“Since September 11, 2001, the United States has accepted over 700,000 refugees from the Middle East and South and Central Asia. Yet, the most acts of terror have come from home grown evil. People like Wade Michael Page who opened fire on a Sikh Temple in Wisconsin because he thought they were Muslim; Jim David Adkisson who shot up a Unitarian Church in Knoxville because they supported marriage equality; Joseph Stack who flew a plane into the IRS building in Austin; and, most recently, Dylann Roof who shot up an AME Church in Charleston, and on and on. Not to mention the countless terrorists who walk armed and unimpeded onto schools and university campuses on what feels like a weekly basis.

“The people running to Europe and the United States are begging for refuge, hence the term, refugees. I remember what that was like. So, as we all sit down to eat turkey and watch football in a couple of weeks, maybe we can do something truly thankful and help our global community. Since your powers as Governor do not actually include stopping refugees at the Maryland border, let’s try some compassion instead.”

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Barry Rascovar’s blog is www.politicalmaryland.com. He can be reached at brascovar@hotmail.com.