Tag Archives: Gov. Martin O’Malley

Hogan’s Heroes Arrive

By Barry Rascovar

Jan. 19, 2015 – The Changing of the Guard takes place in Annapolis this week: There will be a sharp course correction with the arrival of Hogan’s Heroes.

Hogan's Heroes Leader-Larry Hogan Jr.

Gov.-elect Larry Hogan Jr.

On Wednesday, Republican Larry Hogan Jr. takes the oath of office as governor, followed by the departure of former Democratic Gov. Martin O’Malley as he starts his quixotic quest for the highest office in the land.

On Thursday, Governor Hogan unveils his sharply reduced budget, which will be a shock to the system of Maryland Democrats.

Thus, the Hogan era begins.

Democratic interest groups will have to learn some new tricks.

The old way of bludgeoning a Democratic governor and Democratic legislature into submission won’t work.

Outdated Lobbying Methods

Massing hundreds, or thousands, of protesters on the State House steps used to do the trick when O’Malley was in power.

Hogan, though, could care less if the teachers union or the state workers union or the construction unions fill Lawyers’ Mall to overflowing or flood his office with form-letter emails.

Simply demanding more pay, more benefits, more school funds, and more social services won’t be helpful, either.

The new governor is approaching his job with a firm set of ideas on how to govern Maryland that is in marked contrast to the traditional Democratic method.

No longer will the state budget balloon to satisfy special interest groups within the Democratic Party. No longer will special-interest bills designed to mollify those same power bases within the Democratic Party hold sway on the second floor of the State House.

Businessman as Governor

Hogan takes a businessman’s approach to governing. He holds definite conservative views, but Larry Hogan is far from an extremist. He’s no friend of tea party fanatics. He’s not about to take Maryland back to the Stone Age.

That could be seen clearly in many of his appointments.

Hogan chose a well-rounded group of upper-level managers and advisers, including a good number of pragmatic, moderate Democrats with legislative experience, such as former Sen. Rona Kramer from Montgomery County, former Baltimore County Councilman Joe Bartenfelder, former Delegates Steve DeBoy and Keiffer Mitchell from the Baltimore area and former Delegates Van Mitchell and George Owings from Southern Maryland.

DeBoy in particular is an important choice, since he will be engaged in lobbying lawmakers on behalf of the Hogan administration. He’s a retired cop from Catonsville who was highly respected by fellow delegates for his friendliness, common-sense and conservative pragmatism.

Understanding Hogan

Many of the appointees have strong business backgrounds. That is the key to understanding Hogan’s mindset.

People with experience in business know the crucial importance of avoiding a deficit. You spend what you take in, and no more. You don’t expand services hoping that the economy soars. That is the path to bankruptcy.

Hogan won’t have much sympathy for teacher unions demanding ever-increasing amounts of school funding. That’s not how businesses work.

Hogan is going to take a jaundiced view of state worker union demands for pay increases and benefit gains every year. He knows that’s a sure way to drive a business to the brink of insolvency.

There will be plenty of pain as Hogan squeezes budgetary excesses out of Maryland’s funding programs. Businesses do that all the time. The goal is to build a leaner yet more effective company.

Losing Bad Habits

Hogan is almost certain to tell Marylanders that state government has gotten itself into bad habits: excessive borrowing; depleting all the government’s “piggy bank” accounts to paper over revenue shortages; shifting around funds; spending far more each year on education than revenues allow, imposing new taxes to cover up bureaucratic inefficiencies.

Righting the Ship of State in Maryland won’t be easy. The last Republican governor, Bob Ehrlich, rashly thought his charisma would be enough to win over doubting Democrats in the legislature.

Hogan was part of Ehrlich’s team. He saw the gridlock and ill will that resulted. He learned some painful lessons.

Centrist Politics

The new governor is a glad-handing, commercial land-development salesman and negotiator. Those skills will come in handy. He knows that the art of the deal involves compromise – on both sides.

Governing from the center is pivotal if Hogan is to succeed.

He can’t be a conservative ideologue, tea party libertarian or doctrinaire Republican. None of that will fly with a liberal General Assembly.

Hogan already has shown us he knows how to campaign as a Republican centrist. It proved wildly popular with voters in November.

If he can repeat that recipe as governor, Larry Hogan Jr. could be living in the governor’s mansion for a considerable length of time.

###

The O’Malley Years: An Assessment

By Barry Rascovar

Jan. 12, 2015 — One of the ironies of Martin O’Malley’s eight years as Maryland governor is that a progressive, liberal Democrat spent most of his time cutting budgets and raising taxes just to keep the ship of state afloat.

Gov. Martin J. O'Malley

Maryland Gov. Martin O’Malley

Another irony is that O’Malley started his tenure in 2007 by acting too slowly to stem a predicted tide of red ink in Annapolis. Now he is ending his second term by again responding too late to a huge, looming budget deficit.

However, when the history of the O’Malley years is assessed by scholars decades from now, what will stand out is the ease with which Maryland navigated the Great Recession — the nation’s worst economic decline since the 1930s.

The credit belongs to Martin O’Malley.

He eventually bit the bullet and did what Democrats hate above all else — he cut back on government services to the middle and lower classes, especially those who need a helping hand.

He found ways, though, to temper these hammer blows — shifting large sums from flush government accounts, borrowing heavily on the bond market, converting cash payments for farmland and Chesapeake Bay preservation into 15-year bonds and raiding the transportation fund.

Turning to Taxes

When that wasn’t enough, O’Malley taxed the wealthy, raised the corporate tax, raised the sales tax, raised the tobacco and alcohol taxes and, belatedly, the gasoline tax.

These weren’t popular moves, but it meant that social services for those without much money or with disabilities still could turn to Annapolis for assistance.

It still remains a mystery why O’Malley, who had weathered a host of fiscal storms as mayor of Baltimore for eight years, hesitated to recognize the brewing recession as he took office.

Legislative analysts already were predicting a future budget hole of $1.5 billion. Yet O’Malley ignored these forecasts.

Instead, in his first budget he hiked school construction handouts to a record $400 million, froze tuition for state college students by pouring extra funds into those institutions, and stripped the state’s Rainy Day fund of $1 billion to paper over Maryland’s financial woes until the economy improved.

Storm Clouds

Yet even as O’Malley’s initial budget was being passed, the state’s sales tax collections were declining along with other revenue sources. Loud alarms should have sounded in the governor’s suite.

Within months, O’Malley was forced to backtrack. He raised a slew of taxes, cut his initial budget requests and reversed his opposition to casino gambling.

The state’s worsening fiscal reality followed O’Malley throughout his two terms.

By the end, he was still unwilling to take proactive steps in mid-2014 to prevent what became an 18-month, $1.2 billion fiscal hole created by an agonizingly slow economic recovery and budget reductions coming from Washington.

Only in the past week did the governor seek $400 million in reductions so he could leave office with his final budget in balance.

Yet his last-minute actions did nothing to close the $800 million budget hole he bequeaths to Gov.-elect Larry Hogan, Jr.

Big Government

O’Malley’s budget hold-downs also were never meant to represent a permanent reduction in state government’s expanding role in Maryland society.

He is a strong believer in the good government can do for people. He wants to deliver more education help, more health care access, more social services for the state’s underclass and more aid to the counties and the middle class.

O’Malley’s faith in Big Government puts him on the far left of the Democratic Party’s spectrum. “Big things done well make even bigger things possible,” he said early in his first term. He still feels that way.

The governor certainly put his ideas into action.

  • He expanded health insurance in Maryland way before Washington acted.
  • He was quick to crack down on handgun and assault weapons sales in Maryland.
  • He fought vigorously to allow gay marriages in Maryland.
  • He raised the minimum wage.
  • He abolished the death penalty.
  • And he made it easier for children of immigrants to attend local colleges and universities.

Green Governor

He also won the hearts of environmentalists — another core group within the Democratic Party.

O’Malley raged against the “greed” of utility executives intent on selling Constellation Energy and demanded stiff concessions, including monetary support for wind and other alternative power sources.

He signed a super-expensive agreement to clean up the Chesapeake Bay.

He pushed through legislation providing a lucrative subsidy for off-shore wind farms.

He restricted the use of chicken manure as fertilizer on Maryland’s Eastern Shore.

He delayed approval of hydraulic fracturing of shale deposits for oil and natural gas drilling in far Western Maryland.

He promoted an aggressive “smart growth” strategy.

Low Points

Not all these steps were popular or successful.

The governor’s “rain tax” to stem excessive stormwater runoff ran into heated local opposition.

His failure to keep an eye on the terribly mismanaged Obamacare rollout remains a major black mark.

But overall, O’Malley leaves Maryland with a record of accomplishments that defines him as a progressive Democrat who largely delivered on his promises, despite governing in extraordinarily difficult economic times.

Political Powerhouse

As a politician, Martin O’Malley cobbled together a strong Democratic coalition throughout the state. He dominated political Maryland.

Yet he largely disappeared from last year’s gubernatorial campaign, refusing to defend his record. That was a huge mistake. Republican Hogan had a field day pummeling O’Malley, who was never there to rebut the charges.

Hogan’s easy victory on Nov. 4 signaled a sharp change in the state Democratic Party’s fortunes. The efficient statewide organization O’Malley had built crumbled.

The party lost much of its previous support in towns and communities beyond Baltimore City, Montgomery County and Prince George’s County. Without O’Malley, Maryland Democrats appear leaderless and in disarray.

On the National Stage

Now it is on to what O’Malley hopes will be much bigger things.

He’s actively exploring a run for president. A pipe dream? Tell that to Jimmy Carter or Bill Clinton — small-state governors who beat the odds.

O’Malley was far from an ideal governor, but he gave Maryland honest, intensely dedicated service. The state is better off than it was when he arrived in 2007 to take the oath of office.

Best of all, Marylanders of this generation will be able to tell their children and grandchildren that thanks to Martin O’Malley:

“We beat the Great Recession and lived to tell about it.”

###

State Center Questions

By Barry Rascovar

Dec. 11, 2014 — Next week, lame-duck Gov. Martin O’Malley may decide to bring the matter of the $1.5 billion State Center project before a divided Board of Public Works.

It would be a controversial move.

State Center with new building

State Center with new building

Readers responded to my previous column on this topic with some interesting thoughts. Their conclusion: There are far better ways to redevelop this space and provide decent offices for state workers in Baltimore.

University Center?

Steve, who is a Baltimore-area developer, writes:

In my opinion the universities and hospitals are the glue that holds this City together once you get away from the Inner Harbor. 

“How about they move the government uses down to the [Central Business District] as [Peter]Angelos suggests and then make the State Center parcel available to the [University of Baltimore] and/or [the Maryland Institute, College of Art] so that they can expand their campuses, while incorporating into the project some retail and other amenities that would benefit neighboring communities? 

“[A win] for the CBD, win for the universities, win for the neighboring communities.  Maybe that makes too much sense for it to happen.”

Hurting ‘Older Downtown’

Hugh, a long-time financial industry executive, writes:

“It was an ill-conceived idea from the start. There is so much B [office] space in the Central Business District available suitable for state workers at much better rates/rents.

“Additionally, [the State Center project] would take current state workers [out of] ‘older downtown.’ [This] would hurt vacancy rates even more.”

Ideal Arena Site

Owen, a longtime development pro, believes the State Center site is ideal for a new city arena.

The current plan, he writes, suffers from its “wayward scope, negative financial profile and appealing alternatives.”

Relocating the arena there makes sense, he believes:

“While the previously contemplated office project appears permanently stalled, the site adjacent to the O’Conor office building is large enough to accommodate a new arena and would certainly bring new life to the neighborhood.”

The area has lots of public transit and the Lyric and Meyerhoff performance centers. Owen adds an arena at that site would create “a more dense critical mass of entertainment related uses.” This, he feels, would lead to “more amenities for those patrons and create a rising tide for all to benefit.” 

‘No Longer Affordable’

A few days ago, Comptroller Peter Franchot chimed in as well. Not surprisingly, he’s against the amended plan, just as he opposed older versions of the State Center proposal.

Franchot says, “This is really a very questionable project. . . . When you look at the deal right now, unlike a few years ago, it’s no longer affordable. The commercial real estate market really hasn’t fully rebounded in Baltimore. We’re going to be paying a lot in rent.”

Then there’s the question of endangering Maryland’s triple-A bond rating.

State legislators are concerned State Center subsidies might put Maryland over its capital bond cap. Even if that’s not the case, the costly lease agreement will put a crimp in the state’s operating expenses for decades to come.

DLS Analysis

It’s also worth noting some of the points made in the Department of Legislative Services analysis of the revised State Center proposal.

State Center plan

State Center Plan

First, the plan now is based on the state taking an additional 115,000 square feet of office space — for a total of 515,000 square feet. That means yanking more state agencies out of the downtown business district, which already is hurting badly from high vacancy rates.

Second, these sky-high leases — $35.85 a square foot, plus a 15 percent inflation factor every five years — “would not be subject to appropriations in the State budget.” It is the only such project that is exempt from legislative oversight and review.

Third, the now-shrunken underground garage still would cost the state $28.3 million, leading to an annual debt service of $2.5 million for the state and an annual loss to the transportation trust fund of $2 million per year.

Fourth, the 500 spaces reserved for state employees will cost each of those workers $600 a year, versus the free parking on surface lots employees now use. (There are 3,500 workers in the State Center complex, meaning the new replacement building will not come close to accommodating all those who drive to work.)

Fifth, moving expenses alone will cost the state $2.4 million. Then the state will mothball the existing buildings. That adds another $5.8 million per year in expenses.

Sixth, DLS questions whether a private charter school is best situated in a state-leased office building. That’s the latest plan from the developers.

DLS also wonders if it is realistic for developers to anticipate a supermarket will open in the Firth Regiment Armory building, with its high walls and enormous heating and air-conditioning bills.

“It is unclear if any of these changes make sense,” DLS concludes.

The agency’s analysis lists four options:

  • Do nothing, which will require costly annual patch-ups to the 50-year-old structures.
  • Renovate or replace the current state buildings, at a cost of $215 million. (Given the state’s over-extended capital bond program, this is a non-starter.)
  • Sell the State Center buildings now in use and rent space elsewhere. Downtown office rents are cheap and there’s oodles of quality space available.
  • Buy out the developer and re-bid the project — but this time limit the RFP to one new privately owned office building for state workers.

DLS raises significant and substantive issues that cry out for careful scrutiny.

Changing Times

Since the State Center plan was first unveiled to great fanfare in 2005, times have certainly changed.

What is now under examination may not be economically feasible.

There may be far better uses for the site.

There are far less expensive ways to find better office space for state employees.

Perhaps most telling, the state no longer has the financial strength to give such a generous subsidy to a private developer for a project that is, at best, marginally viable.

There are plenty of reasons to take a “go-slow” approach on the State Center proposal. 

We could learn next week if O’Malley agrees.

###

 

 

State Center Boondoggle

By Barry Rascovar

Dec. 8, 2014 — As Gov. Martin O’Malley winds down his second and final term as Maryland chief executive, he owes it to his successor — and to his legacy — not to push for approval of a new plan for developing State Center in mid-town Baltimore.

It’s a boondoggle in both its current form and in its amended form.

State Center vision

State Center vision

With the state facing dire budget deficits for years to come, it makes no sense for O’Malley to saddle the next governor with an inflated lease that will cost an extra $18.5 million per year — rising by another 15 percent every five years — to house agencies already working in lease-free buildings at State Center.

The only winners in this proposal are the developers, who just happen to include a number of friends and allies of the governor.

One-Sided Deal

Going forward with this shell game of a $1.5 billion plan would seriously tarnish O’Malley’s reputation. It would be unfair to pawn such a one-sided deal off on Gov.-elect Larry Hogan and Maryland taxpayers.

The governor should do the wise thing and put the amended State Center plan on hold  until Hogan is inaugurated.

Bringing this matter before the Board of Public Works could set off needless fireworks and disputes over an ambitious development that the Department of Legislative Services has repeatedly called into question.

From the beginning, the State Center plan that O’Malley has backed made little sense.

It was an idea that emerged during boom times and depends on the largesse of the city and state governments.

Ambitious Plan

The developers want the state and Baltimore City to underwrite much of the cost for constructing a new building on state land near the existing, aging state office complex.

Then state agencies will move from the state-owned buildings to the new, privately owned office structure — with the developers charging exorbitant rent equivalent to harbor-view rates.

The developers then will gut the 15-story State Office Building and turn it into market-rate apartments. More office buildings and residential units will follow on land leased from the state — with all the profits benefiting the developers.

None of this was realistic, even during good economic times.

The site is not in an appealing location, since it abuts a crime-ridden housing project and an under-achieving hospital. The site is about a mile from the central downtown business district, overlooking a forlorn section of Howard Street.

Appealing Alternatives

It would be far cheaper for the state to move agencies into inexpensive, modern office space downtown — either permanently or temporarily while the State Office Building and Herbert R. O’Conor Building are renovated. Or the state might move the agencies into the million-square-foot former Social Security annex near Lexington Market through a private-public partnership arrangement.

State Center complex

State Office Building (right) and O’Conor Building (left)

The most expensive way to give state workers better office space would be to proceed with the private development of State Center.

Even the developers’ parking arrangement for the office building seems unrealistic.

The state would be stuck with the tab for the expensive underground garage, but there wouldn’t be enough spaces to handle all the workers’ cars — and there would be few parking spaces for people conducting business at state agencies or shopping at the building’s ground-level retail stores.

The initial plan, devised before the Great Recession and championed by Republican Gov. Bob Ehrlich, was overly optimistic at the time. It envisioned State Center as a great transit hub (Metro, light rail and buses) that would be a natural magnet for new city residents and offices.

It hasn’t turned out that way.

Angelos Vindicated

Baltimore attorney Peter G. Angelos sued the state over the plan, claiming it would be far less costly and far better for Baltimore City if state agencies moved into  vacant space in the central downtown business district.

Angelos won his argument in circuit court but lost on appeal. Time, though, has proved Angelos right.

O’Malley shouldn’t leave office under a cloud.

Citizens owe him a huge debt of gratitude for the way he muscled Maryland through the Great Recession without massive layoffs or harmful cuts to the state’s social safety net.

It would be best if O’Malley left the State Center plan in limbo rather than foist this ill-timed proposal on Hogan.

Given the depressing economic outlook for Maryland’s state government, there’s no way the State Center project should move forward.

It’s a white elephant waiting to happen.

###

 

O’Malley Pitches, Hogan Receives, Gansler Swings

By Barry Rascovar

Nov. 19, 2014 — My, how the wheel turns — for Gov. Martin O’Malley, Gov.-elect Larry Hogan Jr. and outgoing Attorney General Doug Gansler.

O’Malley Pitches

The lame-duck governor is in fund-raising mode. He’s all but officially running for president (despite guffaws from the home folks), which takes lots of moola. So it was off to New York to impress prospective donors.

Gov. Martin O'Malley

Gov. Martin O’Malley

Thursday, O’Malley hosts a songfest with musician Steven Stills. It was originally scheduled to be held in a lounge at the Hippodrome Theatre in Baltimore, with tickets ranging up to $10,000 for the O Say Can You See Committee, the front group for O’Malley’s presidential ambitions.

It also was also conceived as a post-election celebration after the sweeping gubernatorial win of Lt. Gov. Anthony Brown.

Oops.

A funny thing happened on the  way to Victory Lane — Brown got clobbered, Republicans in Maryland staged a remarkable recovery and O’Malley drew voters’ ire for an endless string of tax increases and outsized spending.

The Stills event now has been moved to a large tent at the home of major O’Malley supporter Martin Knott.

One longtime Democratic donor was inundated with solicitations. Would he buy a $5,000 ticket? As the event drew closer, he was asked, how about a $1,000 ticket? Days later, the request came down to a $500 ticket. Finally, he was told, “Oh, what the heck. Just come. We’ll let you in.”

Roughly 100 supporters are expected to attend.

The ever-energetic O’Malley also has a fund-raiser planned Friday night at the home of federal lobbyist Terry Lierman. He will be celebrating his daughter’s election to the Maryland House of Delegates from Baltimore as well as toasting O’Malley.

Meanwhile, O’Malley is bolstering his liberal environmental record by cracking down, through tough regulations, on use of phosphorus fertilizers, especially on poultry farms. The cost could be devastating for small farmers, but O’Malley is thinking about his own political future, not the future of Eastern Shore farm families.

He’s also issuing frequent press releases from the governor’s office on such issues as climate change and the Keystone heavy-oil pipeline, siding with the environmentalists he wants to romance nationally.

As for governing Maryland, that’s less of a priority. O’Malley’s thoughts are turning to making national news all the time.

Hogan Receives

While O’Malley is struggling to draw fund-raising crowds, Governor-elect Hogan has no such problem. He held a small soiree for VIP supporters and raised $250,000 for the state GOP. He’s now a very popular guy. He’ll have no trouble wiping out the $500,000 loan he made to his own campaign.

That won’t be the case for the guy Hogan defeated, Anthony Brown. He borrowed $500,000 from a local labor union and failed to raise enough money to pay back the loan on time. Even with this last-minute loan, Brown ran short of funds and failed to keep pounding away with TV commercials in the final days of the campaign.

Now he may be pounding hard to find donors willing to help a defeated candidate pay off this giant IOU before 2018. If he doesn’t, Brown will have to repay the loan himself.

Gansler Swings

Attorney General Gansler didn’t expect to lose the gubernatorial primary to Brown, but he ran into a united front from Democratic Party big shots determined to elevate Brown. He also discovered that a third candidate, Heather Mizeur, chipped away at his liberal support.

Gansler didn’t have a backup plan. For him, failure wasn’t an option — but it happened nonetheless.

Attorney General Doug Gansler

Attorney General Doug Gansler

Faced with having to find a job as a lawyer after 16 years in public service, Gansler was flooded with enticing offers. He chose a relatively new firm that quickly has gained status in legal circles for its work helping businesses, BuckleySandler. It’s a Washington firm with offices in the Big Apple, San Francisco, Chicago and (how nice) London.

Don’t expect Gansler to disappear from the Maryland political scene, though. He’s going to wind up on a slew of non-profit boards and is continuing to work vigorously to grow his inner-city lacrosse league in Baltimore.

With no obvious front-runner among Democrats to take on Hogan in four years, Gansler may make another stab. Once you’ve been bitten by the political bug, it’s hard to let go.

#  #  #

For more columns, click on www.politicalmaryland.com

 

 

MD’s New Normal

By Barry Rascovar

Nov. 17, 2014–The outlook for the Maryland state government Larry Hogan Jr. starts running in January is grim: A sea of red ink far into the future.

Forget about major tax cuts or other campaign promises. That was a hope more than a firm commitment. Hogan said as much to voters. His first priority then and now: getting Maryland’s financial house in order.

Governor-elect Larry Hogan Jr.

Governor-elect Larry Hogan Jr.

How bad is it?

Spending is running roughly $400 million ahead of revenues this fiscal year – and the same gap is projected for next year and the following 12 months.

Maryland’s estimated structural deficit during that time is nearly $1.2 billion.

Over the next six years, the total structural deficit is projected at close to $4.3 billion.

Whiz Kid

No wonder Hogan announced that fiscal whiz Bobby Neall would be plotting a budget triage plan by year’s end. It will be a Herculean task.

Neall has the credentials.

He sensibly downsized Anne Arundel County government as county executive. He was a strong advocate of cautious, common sense spending as a leader of the House and Senate budget committees. He’s been a voice in the wilderness on the Spending Affordability Committee crying out for far-reaching fiscal reforms – usually rejected by legislative liberals and the “progressive” O’Malley-Brown administration.

Bobby Neall

Fiscal Whiz Bobby Neall

Neall correctly pointed out last week that one of the main trouble spots is the soaring cost of debt payments. Too many state bonds were issued in recent years. The proverbial chickens are coming home to roost.

Unless something is changed, debt service will triple from two years ago — to $268 million. By 2019-2020, debt service will hit $559 million.

Even worse, there’s only one realistic way to curb that rising expense — a step Hogan definitely won’t take: Raise the state property tax rate.

Difficult Cuts

Other big spending-growth areas also will be difficult, if not impossible, to cut.

Education aid to the counties is set to rise by $304 million next year, higher education by $225 million and public safety by $175 million. Most of this is due to mandated increases.

Unexpected expenses related to the expansion of Medical Assistance under Obamacare adds a whopping $410 million next year as well.

The overall problem is easy to identify.

Too much spending by liberal Gov. Martin O’Malley; a weakened state economy that isn’t recovering as expected.

Not enough coming in; too much going out.

Welcome to the New Normal.

False Assumptions

O’Malley and other liberals always assumed that Maryland would rebound strongly from the Great Recession. It never happened.

Job creation has remained uneven. It’s been flat for the past six months. Republicans in Washington have stalled growth in the federal bureaucracy that employs so many Maryland residents. Contractors in Maryland who are dependent on the federal government are seeing a definite slowdown that will continue with the GOP taking full control of Congress.

Adapting to a smaller federal government could be painful for Maryland. Yet that is part of today’s reality.

Budget balancing

The New Normal means Maryland government will have to shrink, too. It means less money flowing back to local governments as well.

Capital spending will be affected. In the past, a small state real estate tax was sufficient to pay debt service on general obligation bonds. But property values took a sharp plunge in 2008 and have yet to recover fully. That trend may persist for the rest of the decade.

This year, O’Malley for the first time dipped into the state’s general funds to pay for debt service. With housing prices stalled, Hogan is facing far larger debt service payments coming from the general fund starting next year.

Diverting Bond Proceeds

The situation was made worse by O’Malley’s decision to pay some on-going budget expenses with proceeds from state bonds. This diversion has taken nearly $2.5 billion out of the state’s construction program and has increased debt service markedly.

It’s an ugly aspect of the New Normal.

On the campaign trail, Hogan made cutting state spending sound easy. It’s not.

For starters, 58 percent of the growth in Maryland’s budget next year is required by law or by legislative mandates enacted in 2014. This is untouchable without assent from the liberal General Assembly.

Local aid will be hard to cut, too. Eight-six percent of that money goes to schools. Touching this ever-growing pot could be next to impossible given the popularity of education among voters.

Why not slash the bureaucracy? Amazingly, the size of the state’s work force is virtually the same as it was in 2002. There might not be as much “fat” on the bone as Hogan indicated during the campaign.

Unpleasant Options

Hogan may have to settle for incremental reductions throughout government. He may have to take some distasteful steps, too, perhaps nudging up the state property tax slightly. He’ll almost surely have to lower aid to the counties – another unpleasant task that won’t win him friends in counties that supported him.

He won’t win fans by shrinking the school construction program, either. But it has to be done to restore a sense of fiscal equilibrium.

What a mess O’Malley is leaving behind. He let spending spin out of control. He ignored clear signs that growth in state revenue was slowing and that federal hiring and contracting were shrinking. These are long-term trends.

Budget issues will dominate Hogan’s first four months in the State House. He will need cooperation from Democratic legislators to get Maryland out of this fiscal bind.

Gridlock is not an option.

###

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

How Brown Blew a Sure Thing

By Barry Rascovar

Nov. 7, 2014 — Yes, Republican Larry Hogan Jr. ran a smart, tightly focused campaign that helped him pull off a surprisingly strong upset in the race for Maryland governor. But the major reason he’s the next chief executive is that Democrat Anthony Brown blew a sure thing.

Lt. Gov. Anthony Brown

Lt. Gov. Anthony Brown

Here’s how Brown turned almost certain victory into a humiliating defeat:

He Blew An 8-Year Head Start 

Brown had two terms as lieutenant governor to put down deep roots in all the right places throughout Maryland. It never happened. Instead, he traveled constantly giving written speeches and then driving off to the next staged event.

He never bothered to familiarize himself with the people of Maryland; instead he limited his circle to elected officials and receptive civic groups.

He failed to jump in and learn about what wasn’t working in the counties — and then help local leaders find a fix.

He didn’t spend his vacations walking the Ocean City boardwalk meeting and talking with common folk.

He didn’t spend his time in Western Maryland getting to understand the unique problems of this isolated, mountain region in chronic need of a helping hand from Annapolis.

He didn’t tour Baltimore City and its vast suburbs to find out what was on people’s minds. He was as alien to them on Tuesday as he was eight years ago.

He Took the Summer Off

Brown started with a huge lead and everything in his favor. He breezed to an easy primary victory. Then he disappeared for the entire summer.

That’s when he should have cemented his relationship with local Democrats, hit every carnival, parade, crab feast and bull roast in sight. Preaching at Sunday services isn’t enough. You’ve got to show your face everywhere  and press the flesh. You’ve got to work up a sweat and convince people you’d make a great next-door neighbor. That’s what Hogan did.

By delaying his campaign till the fall, Brown lost his momentum.

He should have used the summer to organize a statewide tour featuring the full Democratic team — Brian Frosh running for attorney general and Peter Franchot running for comptroller.

He also needed to turn the losing primary candidates, Doug Gansler and Heather Mizeur, into surrogate campaigners. Brown never gained the trust of Gansler and Mizeur voters because he didn’t bother to try.

He Gave Hogan Free Advertising

Hogan emerged from the Republican primary with little money and low name recognition. But no matter, Brown rode to the rescue by giving Hogan millions of dollars worth of free advertising.

Instead of ignoring Hogan — and letting him struggle to gain visibility — Brown spent most of his advertising budget denouncing Hogan as a “dangerous Republican.” Hogan’s face was plastered on TV ads.

When it turned out that Brown’s charges were bogus and inherently dishonest, this sleazy tactic backfired. Brown ended up wasting his ad dollars, offending voters and promoting Hogan while not telling voters anything about himself.

Negative Attacks Aren’t Enough

The first job was to tell the electorate about Anthony Brown — in his own words. Repeatedly. With emotion and real feelings.

Instead, Brown bombarded the air waves with ruthlessly hostile, negative ads — flagrantly false — about Hogan. The Republican got all the attention, not Brown, who continued to remain a mystery even to Democratic voters.

When Hogan turned out not to be Darth Vader but instead a friendly, mild-mannered Rotarian, Brown’s attack ads lost all credibility. They were unethical. This turned off Democrats and independents. It was a gigantic mistake.

Where Was Martin? 

Brown badly needed Gov. Martin O’Malley on the campaign trail from June through October. Yet Brown never capitalized on O’Malley’s magnetic personality and hands-on approach to campaigning.

Is O'Malley's presidential bid for real?

Gov. Martin O’Malley

Since Brown proved unwilling or unable to articulate what the two had achieved in eight years, what better spokesman for the O’Malley era than the governor himself?

But once again, it never happened. O’Malley was the invisible man in the campaign. Brown got hammered on O’Malley’s record yet there was no one mounting a persuasive defense.

Where Was Heather? 

The surprise of the primary election was Democrat Heather Mizeur. Young and progressive voters flocked to her ultra-liberal crusade. After she lost, she volunteered to campaign for Brown — only to receive a polite snub.

Her supporters lost interest. Many didn’t bother to vote in November. The opportunity to spark interest in the Brown campaign among young progressives was lost.

Isolation Booth Campaigning is a Dud 

Brown let his campaign gurus call the shots — even when the moves made no sense. They isolated Brown from the common folk, from the media and from any human contact that wasn’t carefully scripted.

Brown is a Harvard grad with 16 years of political experience. Yet he was muzzled and insulated from the retail side of campaigning. That’s where a candidate reveals his human side. Voters need to glimpse a candidate’s humanity.

He compounded this sin by excluding his own voice from nearly all campaign ads. He never got the chance in his ads to personally address voters with genuine, heart-felt words.

The Big 3 Isn’t Enough

Brown’s strategy was to win big in Baltimore City, Prince George’s County and Montgomery County. He largely ignored everywhere else.

Yet he needed to spend lots of time impressing Democrats and independents in all the outlier counties where Republicans dominate. When he failed to pay attention to them, they drifted over to Hogan — or didn’t vote. He lost precious support not only in rural counties but also big jurisdictions like Anne Arundel, Harford, Howard and Baltimore counties. Hogan won there by giant margins in part because Brown was a no-show in those counties.

No Coordination with Local Democrats 

Just as Brown snubbed Mizeur, he also snubbed local Democrats badly in need of help in their local campaigns.

Other politicians and Democratic supporters pleaded with Brown’s camp to set up small-scale events in their districts to generate enthusiasm and energize local voters. They, too, were rebuffed.

Brown ran a one-man campaign focused on No. 1. As a result, many local pols didn’t go the extra mile to help Brown.

Policy Does Count

To this day, we’re still not sure what Brown specifically wanted to do as governor. He spent his time attacking Hogan rather than laying out a coherent, compelling visions for the next four years.

Hogan was very clear: reduce spending, cut taxes and regulations, support business growth that creates more jobs.

Brown told voters lots of reasons — most of them fallacious — why they shouldn’t vote for Hogan but precious few reasons why they should vote for him.

Voters Saw Through Brown’s Façade

Voters know the office of Maryland lieutenant governor is a worthless job. You shouldn’t put it on your resume, but Brown did. He needed instead to give voters plausible reasons to continue the reforms O’Malley started. He needed to explain what they had accomplished rather than stress his military background and service as light guv.

Brown was content as lieutenant governor to play a figurehead role on commissions and committees (such as the health-care exchange) and relentlessly read prepared texts to safe groups around the state.

When asked during the campaign, what he’d done since 2006 to justify election as governor, Brown couldn’t give a satisfactory answer.

The Media Matters

People get much of their political insights through media outlets. Denying reporters access to a candidate is dangerously counter-productive.

Brown at times ran from reporters. When asked an unexpected question, he looked like a deer caught in headlights.

Hogan stayed behind following the three debates, joked with reporters and responded to their queries. Brown quickly headed toward his chauffeured SUV and drove off.

Like it or not, politicians must romance the media.

Reporters write nicer stories if they get to know and like the candidate. Editorial page editors write kinder opinion pieces about a candidate who is open, friendly and a frequent presence.

That describes Larry Hogan, not Anthony Brown. Guess who won?

# # # #

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

‘Where’s Martin?’ Not in MD

By Barry Rascovar

Oct. 30, 2014 – It’s a puzzle that would captivate devotees of the “Where’s Waldo?” illustrations. Only in this case, the question is, “Where’s Martin?” (O’Malley, that is, Maryland’s two-term governor).

'Where's Martin? --'Where's Waldo?' illustration

Since late spring, the state’s chief executive has been largely MIA – missing in action. He’s done an early fade-out so that Lt. Gov. Anthony Brown can capture the media limelight.

This serves dual purposes.

It allows Brown to escape from O’Malley’s shadow after eight years and promote himself as a legitimate co-owner of the O’Malley-Brown administration’s accomplishments.

There’s no dueling press conferences or conflicting media events. Uncharacteristically for the governor, he has limited his in-state public appearances and no longer dominates the local news.

National Travel Schedule

At the same time, this has given O’Malley time to work on his next career move, which involves running for national office, either next year or in the future.

Not a week goes by without his travel schedule including jaunts to Iowa, New Hampshire, South Carolina or some other state where there are early presidential primaries or Democratic candidates happy to have O’Malley campaign for them.

'Where;s martin?' -- Martin O'Malley in Iowa

Martin O’Malley in Iowa

This past Monday he was tramping through New Hampshire for Sen. Jeanne Shaheen — his fifth visit there.

This may pay off in time for the 2016 Democratic presidential face-off, especially if the presumptive winner, Hillary Clinton, opts not to run.

Otherwise, O’Malley can add to his frequent-flier mileage, develop party contacts, earn the gratitude of Democratic candidates all over the nation, and bide his time until the H. Clinton presidency nears its end in 2020 or 2024.

Flexible Timetable

He’ll still be only 59 in eight years, a prime age for a serious presidential run. By then, he may have gained substantial Washington experience — and national visibility — under the nation’s first female president.

If a Republican wins in 2016, O’Malley’s timetable can be accelerated for a presidential bid in 2020.

All this starts with solid foundation-building this year and next. O’Malley has dispatched paid operatives to key primary states and is engaging in all-out retail politicking at which he excels.

'Where's Martin?' -- O'Malley campaigning

O’Malley campaigning

Yet at home, Maryland seems at times rudderless.

O’Malley is so absent from daily developments that it is hard to remember how he dominated media attention over the past 14 years as mayor of Baltimore and Maryland governor.

Letting Brown take center stage, though, has its drawbacks.

First, Brown seems to have an aversion to O’Malley’s brand of on-the-ground campaigning, the sort of endless meet-and-greet, get-to-know-you politics people adore.

Second, Brown has become Maryland’s “bubble boy” – isolated from the general population in a tightly scripted campaign schedule that avoids unnecessary contact with ordinary folks and the media.

No Personal Connection

Instead of reveling in this opportunity to seize the moment and impress Maryland voters with his political savvy and grasp of issues, Brown has hidden behind a barrage of harsh, inaccurate attack ads and a relentless, unfair pummeling of a “nice-guy” Republican, Larry Hogan Jr.

The lieutenant governor has failed to make a convincing case for the positives of the O’Malley years and has had trouble defending the negatives — especially the botched health exchange rollout that Brown failed to supervise properly.

What’s missing in his campaign is any personal connection between Anthony Brown and voters. That’s most harmful in the Baltimore area, where Brown is pretty much a mystery figure.

O’Malley’s absence from Maryland’s political scene deprives Brown of a valuable asset – especially in Baltimore City, which is a pivotal jurisdiction in the governor’s race.

While O’Malley’s popularity numbers in polls are dropping statewide, he remains a favorite in Baltimore, where the former mayor is fondly remembered.

Baltimore also is Brown’s weak spot. He’s got scant connections there and hasn’t become involved in local issues. He’s not a household name.

Yet Baltimore is such a Democratic monolith that winning big in Charm City is paramount for Brown.

O’Malley could have helped immensely. Why wasn’t he turned turned loose in city neighborhoods with block parties and frenetic double-time door-knocking on Brown’s behalf?

Where’s the Real Anthony?

O’Malley knows how to give campaigns a human dimension; Brown doesn’t. The lieutenant governor is stiff, self-controlled and almost robotic in approaching voters.

The real Anthony Brown isn’t on display.

So Martin O‘Malley’s disappearance from Maryland’s campaign arena could well backfire on Democrats.

With his boss on the campaign sidelines locally, Brown had a golden opportunity to impress state voters.

Yet Brown hasn’t grabbed the brass ring. He seems afraid to reach for it.

#   #   #

Junk the ‘Lockbox’ Amendment

By Barry Rascovar

Oct. 21, 2015 — Marylanders are being sold a bill of goods under the guise of fiscal accountability.

Voters ought to think twice before approving a constitutional amendment giving transportation priority status over social programs when the economy turns sour.

Conservatives — especially those who are staunch advocates of road-building — want to embed in the Maryland Constitution a high wall preventing the governor from dipping into the Transportation Trust Fund when the next recession creates a budget crisis.

If this amendment passes, it would be extraordinarily difficult for a governor to draw on transportation dollars to avert recession cuts in money flowing to local governments for schools, health care and social services. State workers’ jobs, pay and pensions would be at risk.

Once the transportation “lockbox” is approved, environmentalists will demand the same iron-clad protection for an array of “green” funds.

lockbox

We’re getting our priorities confused.

Is the No. 1 goal of state government protecting highway funds, even in the midst of a damaging recession?

Is that our top priority when state tax revenues dry up and the governor desperately seeks ways to avoid layoffs and deep cuts to schools, colleges and public assistance?

During the Great Recession, Gov. Martin O’Malley repeatedly took money from the Maryland Department of Transportation to keep important social programs afloat without imposing cuts that would hurt the poor and low-middle class.

Conservatives view this as theft. They want to stop governors from draining the transportation fund when recessions lead to deep budget holes.

O’Malley’s Mistake

Part of the problem is that O’Malley went overboard in shifting hundreds of millions from transportation to support other budget priorities.

He didn’t want to repay MDOT and he continually returned to this large source to pay for non-transportation expenses.

As a result, O’Malley ended up short-changing MDOT by refusing until late in his second term to address MDOT’s unmet financing needs.

Yet the extent of this problem has been greatly magnified by road-building advocates.

30 Year Trend

Over the past 30 years, a total of $574 million has been shifted from the transportation trust fund by governors during hard times to cover more important necessities. Over $325 million of that has been re-paid, with another payment due next year.

The problem with the lockbox amendment is that it ties the hands of future governors at the precise moment financial flexibility is essential.

Lock

Putting together a $40 billion budget is like solving a massive three-dimensional puzzle. There are thousands of moving parts.

Protecting government’s core services requires enormous fiscal dexterity in bad times.

The more maneuvering room a governor has, the easier it is to develop a recession-era budget that meets essential needs without creating hardships.

Recession Options

Sometimes that might mean borrowing from MDOT or from environmental programs set up to purchase green space or preserve farmland.

Or it might mean issuing general obligation bonds to free up cash sitting in a transportation or natural resources account.

The lockbox amendment dramatically limits a governor’s ability to meet future budget crises without imposing hurtful budget cuts.

It goes like this: If the governor cannot transfer $200 million from transportation accounts in the next deep recession to balance his budget, he’s got to take unpalatable steps — cutting aid to community colleges and private universities, local health departments and local school systems, medical assistance, pension programs and environmental funds.

Or he’s got to chop tens of millions of dollars from every state agency and dozens of local programs. Or he’s got to reduce support for state universities, which likely means a big jump in tuition. Or he’s got to fire thousands of state workers and eliminate services.

Strait Jacket for Governor

If the lockbox amendment is approved by voters, the governor’s options would be dramatically reduced.

Getting legislative approval to tap into the transportation fund (it would require a “super-majority” vote) could prove near-impossible in the decades ahead.

The governor might be forced to eliminate part of Maryland’s social safety net in the next recession, or make heartbreaking cuts to education and health care that damage people’s lives.

Segregating tax revenue in separate accounts that are virtually untouchable for other uses during economic downturns is unsound public policy.

It’s also poor public policy to plant this ticking time bomb in the state constitution, where it cannot be easily or rapidly removed.

Negative Consequences

At this late stage, though, the lockbox amendment has momentum on its side.

The idea sounds sensible — until you start examining the consequences that could result during hard times.

Chief executives in the public sector — and in the private sector — need a full financial toolbox when revenues plunge and the bills come due.

Creating a transportation lockbox robs Maryland’s governor of a vital tool.

It could make matters much worse in a future recession.

###

 

 

 

 

Sharfstein’s Scarlet Letter

By Barry Rascovar

August 11, 2014 — For a 44-year-old, Josh Sharfstein has accomplished much: Baltimore City health commissioner, Maryland health secretary and chief deputy commissioner at the Federal Drug Administration.

Josh Sharfstein

MD Health Chief Joshua Sharfstein

Yet when Sharfstein leaves his state post at year’s end, his many achievements will be eclipsed by one giant failure: Maryland’s terribly botched health insurance exchange rollout.

This glitch-plagued rollout — the costliest debacle in Maryland state history — was a monumental disaster that should have been foreseen.

There were plenty of warning signs in the year leading up to the Oct. 1, 2013 enrollment opening. The exchange’s computer software immediately crashed — and remained dysfunctional for months.

Standing Tall

To his credit, Sharfstein shouldered the public blame for this immense fiasco. The other chief culprits, Gov. Martin O’Malley and Lt. Gov. Anthony Brown, deflected criticism to protect their political futures.

Even worse, they connived with legislative leaders to cover up the true story by avoiding an in-depth accounting of what went wrong until mid-2015. This intentional lack of transparency and accountability will remain an indelible blot on the O’Malley-Brown administration. It will haunt both of them in the years ahead.

Sharfstein took the fall at legislative hearings. He was the only one connected with this ill-fated project to apologize and take responsibility for a truly screwed-up rollout.

It is ironic this happened on Sharfstein’s watch because he’s known as a hands-on micro-manager who drives underlings crazy with his detail-oriented obsessions.

Loss of Control

This time, though, Sharfstein ran afoul of a bone-headed decision by O’Malley and Brown to set up the new Maryland health exchange as a separate, independent agency — instead of wrapping it neatly into Sharfstein’s health department.

That twist meant huge additional expenses — a separate set of backroom jobs had to be created and filled that could easily have been tacked onto existing services within the health department.

The biggest problem in giving the exchange its independence was loss of control.

MD Healthcare Connection

Sharfstein never gained direct authority over the health exchange because O’Malley set up the new agency outside the health secretary’s purview.

Yes, he co-chaired the oversight board with Brown, but that group served as a rubber-stamp for whatever Rebecca Pearce, the insurance executive hired to run the exchange, suggested. The panel didn’t challenge her assessments — a serious mistake.

Even worse, there were no traditional checks and balances to make sure the pivotal choice of technology contractors didn’t veer off-course (sadly, it did).

Nor were the health department’s seasoned computer experts in position to monitor the exchange’s faltering software development.

The department was left on the outside with no authority to intercede or blow the whistle on the prime contractor’s inept performance and failure to meet deadlines.

Righting the Ship

Sharfstein, a pediatrician whose entire career has been in government and public health, was ill-prepared to act as overseer of a highly complex information-technology project.

But as an experienced manager, and with a wealth of IT expertise available in his department, he probably could have avoided the computer crash that proved so costly.

To his credit, Sharfstein accepted responsibility for the disaster. He worked tirelessly to find a work-around and a fix (the first succeeded, the second didn’t). Now the old exchange system is being junked and a new one that is functioning well in Connecticut is being superimposed — at an enormous cost.

The health secretary will stay on to see if this latest stab at building a health insurance exchange works. He wants to walk away without leaving a health exchange headache on his successor’s desk.

That determination says a lot about Sharfstein’s commitment to righting the ship.

He can take pride in the fact that despite horrendous obstacles, over 400,000 people (mostly Medicaid recipients) signed up for health insurance through the exchange. If the Connecticut software system works in Maryland, that number should grow in Year Two.

Moving to Hopkins

We haven’t heard the last of Josh Sharfstein.

He’ll take up residency at Johns’ Hopkins’ Bloomberg School of Public Health as an associate dean with a full workload, but the urge to serve the public could lure him back, especially during a Hillary Clinton presidency.

If that’s the case, he’ll still have to explain what went wrong that led to Maryland’s costly health exchange snafu. It’s a scarlet letter he will wear, whether deserved or not.

#   #   #