Tag Archives: Maryland

Pension Investing: Goldilocks vs. Chicken Little

By Barry Rascovar

Aug. 14, 2017–Separating fact from fiction, headline-screaming hype from on-the-ground reality isn’t easy in this 24/7/365 media-frenzied world, especially when it comes to reporting on government and politics.

Take, for example, the world of state pension fund performance. Returns on these investments have been pretty meager in recent years and the nation’s governors and legislatures have resisted pumping hundreds of billions of dollars to achieve “full funding” for these pension accounts.

In Maryland, it has become an annual rite of August for critics to lambast state pension trustees when they fall short on their investments. The biggest lament is the state’s huge “unfunded liability,” which stands a bit below $20 billion.MD Pension System: Goldilocks vs. Chicken Little

Wow. That’s a mighty hefty number. Is the pension program for 387,000 state workers, teachers and retirees going broke as doom-and-gloomers insist?

Or are we being fed “fake news” in which the “sky-is-falling” screams are based on a false premise?

It’s more the latter than the former. The $20 billion number is based on a scenario that will never happen. It assumes every eligible state worker and teacher retires tomorrow. In other words, government virtually shuts down and everyone starts collecting retirement benefits.

Future Gap in Payouts

It is true the state’s retirement agency pays out more in benefits each year than it takes in from employee contributions and state and local governments. In good years, that gap is closed by investment income. In bad years, the agency withdraws funds from its $49 billion in assets.

This past fiscal year was a very good one for Maryland’s retirement fund. Investments yielded a 10% return – a $3.6 billion increase in net assets. Over the past 10 years assets have grown by $10 billion.

Still, critics assert Maryland’s pension trustees should be far more aggressive. Instead of middle-of-the-road investing compared to other states, they also insist the trustees could make billions more by shifting investments into static index funds.

That would achieve two things. Management fees would be markedly lower, since index funds require very little work for fund managers once they are set up. Second, index funds perform exceptionally well in flush economic times since they reflect overall stock market booms.

Maryland pension officials have resisted this shift and here’s why. In bad times, index funds are hit much harder than actively managed funds.

State officials have been cautious over the years in an attempt to reduce extreme highs and lows by diversifying their portfolio. Only half the agency’s money is tied up in equity funds. The rest goes into much safer, and thus lower paying, investments such as government bonds, real estate and cash.

Over the past 30 years that approach has returned an 8% return per year.

To Index or Not to Index?

Still, critics are pounding the retirement agency for not fully indexing its accounts to lower management fees.

Those critics are ignoring worrisome storm clouds many economists see on the horizon. T. Rowe Price, for the first time in 17 years, is pulling back on its stock investments and increasing investments in bonds – a sign the company sees a downturn coming our way.

T. Rowe Price actively manages its funds so that if the economy starts to tank, it can shift out of stocks and increase its cash reserves. That shelters shareholders from the worst of bad times.

But if you are fully invested in index funds, there’s no way of avoiding a direct hit when the stock market plunges 20% or more.

Comptroller Peter Franchot has warned trustees against taking too many risks to achieve higher returns by buying stocks when their valuations are sky-high. His caution reflects the consensus of the retirement fund’s trustees.

At the moment, Maryland’s pension program is 70% fully funded and the board has instituted a 25-year-plan to close the remaining gap. But this liability is more an academic concern than something to lose sleep over.

Maryland state pension fund trustees continue to ignore the Chicken Littles screaming that “the sky is falling.” Instead, the trustees are following the tried-and-true Goldilocks formula: “Not too hot, not too cold, j-u-s-t right.”

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John Delaney for . . . President??

By Barry Rascovar

Donald Trump may have started an unwelcome trend. An outsider who started as a joke rather than a serious contender in the wide-open GOP presidential primaries last year, Trump pulled off America’s biggest upset. Today he’s president and now just about anyone thinks he, or she, can do the same thing.

Exhibit A is Maryland Congressman John Delaney. He thinks he should be president. He is giving up his seat in Congress to run for Trump’s job – though his odds at this point are slim and none – and Slim just left town.

Delaney’s credentials are exceptionally modest. Yes, he’s serving his third term in the House of Representatives as a Democrat from a district encompassing Western Maryland and parts of Montgomery County. That’s his only fling at public office. Previously he started, ran and then sold two financial service companies, making him super-rich.

John Delaney President??

U.S. Rep. John Delaney of Maryland

But given Trump’s even more meager political resume, Delaney apparently thinks experience no longer counts.

The difference is that Trump is an exceptional reality TV personality, a charismatic, loud-mouthed know-it-all who captivated America’s heartland with his unconventional sales pitch and aggressive, unapologetic rhetoric.

Delaney, by contrast, is more phlegmatic than charismatic. He’s been in office over five years yet still is unknown in most of Maryland.

Congressional record

He’s also got little to show for his three terms in Congress.

His claim to fame is a proposal to rebuild U.S. infrastructure by encouraging corporations to re-patriate, tax-free, billions of profits stashed overseas in exchange for buying special infrastructure bonds that support a giant public works agenda.

Great idea but that’s all it is after five-plus years. Delaney’s brainchild hasn’t matured into a viable plan of action in the Republican Congress.

All Delaney offers Democratic voters at this point is a more moderate, pro-business view of the world than any of the likely presidential candidates in the 2020 primaries.

He does have two advantages: 1) He’s the first to jump in, giving Delaney oodles of time to romance caucus delegates in Iowa and voters in New Hampshire and South Carolina – the early primary states; 2) he can self-fund the next few years of his campaign while building a fund-raising operation.

Even then, it is hard to imagine  Delaney making much headway. He has all the makings of Maryland’s last presidential wannabe, former Gov. Martin O’Malley, who performed so miserably he got just 0.6% of the Iowa caucus vote – and dropped out. It was a huge humiliation for O’Malley, an end to a once-promising political career.

Now Delaney seems headed in the same direction. With a few more terms in the House of Representatives, he might have been an influential congressman. Or he might have used his wealth to become the Democrats’ gubernatorial nominee next year.

Instead, he could end up a footnote – an also-ran in the 2020 Democratic presidential primary season.

That’s insane, but holding public office, or wishing to hold public office, does strange things to an individual’s ego.

Gubernatorial Wannabes

How, for instance, does a Washington lobbyist like Maya Rockeymoore think she is qualified or has the electability skills to become Maryland’s next governor?

How does a little-known “technology policy expert,” Alec Ross, who wrote a best-selling book (“The Industries of the Future”) and advised Secretary of State Hillary Clinton on matters of technology, believe his background is sufficient to persuade voters he’s the most qualified person to fix problems bedeviling Maryland?

And how in the world does a 37-year-old former policy staffer to Michelle Obama and Hillary Clinton, Krishanti Vignarajah – with no prior experience whatsoever in Maryland – believe her modest resume (she ran Michelle Obama’s “Let Girls Learn Initiative”) proves she is capable of running a complex state government?

If Trump can pull off a miracle electoral victory, then just about anyone else can, too. That seems to be the mindset.

It’s as though relevant experience no longer counts. Some captivating sound bites, colorful ads and outrageously out-of-the-box ideas and, voila, the presidency, or the governorship, is mine.

All these contenders see is opportunity – even though they lack the background traditionally expected of elected chief executives in this country.

The last time John Delaney faced a tough electoral fight, in 2014, he won reelection (in a gerrymandered, pro-Democratic district) by a slim 2,774 votes. That’s not an encouraging sign for his uphill battles in Iowa and New Hampshire.

The other wannabes have zero prior experience in running for public office, much less any measure of success. That’s a discouraging sign for their gubernatorial hopes and dreams.

But it’s also a discouraging sign for voters, who must separate the lighter-than-air candidates from the legitimate contenders.

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Crowded Governor’s Race

By Barry Rascovar

July 24, 2017— Given Republican Gov. Larry Hogan’s widespread popularity, it is difficult to grasp why so many Democrats are jumping into the race for chief executive of Maryland.

In the past week, state Sen. Rich Madaleno of Montgomery County formally declared and in a totally unexpected move the wife of U.S. Rep. Elijah Cummings, Maya Rockeymoore, said she wants to run in the gubernatorial primary, too.

That’s in addition to technology innovator Alec Ross,  Baltimore lawyer Jim Shea, Baltimore County Executive Kevin Kamenetz, Prince George’s County Executive Rushern Baker, U.S. Rep. John Delaney, former NAACP President Ben Jealous and former Attorney General Doug Gansler.

Madaleno’s entrance into the populated race adds a solid policy wonk who is giving up a promising career in the Maryland Senate. He knows the issues cold and has worked in the legislative trenches for the past 15 years arguing for progressive legislation and often getting important bills enacted.

Rockeymoore’s curious comments came as a shock to the political system. She is a near-total unknown – except as the wife of a longtime Baltimore congressman.

She has no background in Maryland state or local government – she is a creature of Capitol Hill. She has no political base of her own and is a mystery figure to virtually every voter in the state.

‘Different Kind of Leader’

Rockeymoore, who operates her own consulting firm in Washington, says she wants to run for governor because she has “a bold vision,” though that’s what every other candidate is saying. She also asserts she will be a “different kind of leader,” though that’s what Ross, Jealous and Shea also maintain.

Crowded Governor's Race

Maya Rockeymoore

And she notes the lack of a woman in the Democratic primary race for governor, though all the other contenders are almost certain to have similar liberal views on issues affecting women’s rights.

Yet in such a large field, anything could happen.

Still, why bother?

The Republican governor has sky-high popularity numbers and he continues to outfox his Democratic critics. It will take a set of external forces centered around the rising unpopularity of President Trump to make Hogan’s chances of reelection shaky.

The June 26 Democratic primary – 11 months from now – looks like it will be so chock full of candidates that it may be impossible to predict the winner.

Splintered Votes

Baker, the leading African American candidate, could see that large segment of the Democratic vote split among himself, Jealous and Rockeymoore.

Kamenentz, hoping to become the Baltimore-area candidate, could see that strategy shattered by the candidacies of Shea, Ross and Elijah Cummings’ wife.

Madaleno’s hopes as a popular Montgomery County senator could receive a body blow from the candidacies of John Delaney and Doug Gansler, both from Madaleno’s home county.

Madaleno, Jealous, Rockeymoore and Ross are hoping to gain the lion’s share of this state’s progressive Democratic electorate, even though the far-left hero in last year’s Maryland presidential primary, Bernie Sanders (who recently endorsed Jealous), got just one-third of the party’s popular vote.

At this early stage, the top contenders appear to be Baker and Delaney.

Baker’s edge is his long political career in populous and heavily Democratic Prince George’s County. If he can hold that vote together, he will be a formidable presence in such a big field.

Delaney holds a number of high cards. He will do very well within his congressional district that includes most of Western Maryland and portions of Montgomery County. He is the only moderate-centrist in the race with a solid track record in Congress championing bi-partisan, pragmatic solutions to national problems.

Buying an Election?

Delaney’s biggest advantage is the tens of millions of dollars of personal wealth he can throw into his campaign. The Potomac congressman may not be a household word in Maryland today, but by next June his ads could be flooding the airwaves, making the man and his positions crystal clear to every Democratic voter.

Crowded Governor's Race

U.S. Rep. John Delaney

Will that be enough? We’ve never been in such a situation in the Free State and it is difficult to tell how voters will react to a super-rich, self-financed campaign for the state’s top elective post.

Delaney also can make the case he is the only Democrat positioned to match the governor’s enormous stash of campaign funds and then far surpass Hogan’s fund-raising abilities.

It is, indeed, an odd bunch of gubernatorial wannabes, some with zero elective experience, others with a wealth of government expertise, a millennial contender, three African Americans (one a woman), a gay candidate, an establishment, big-city lawyer — and possibly another unknown female candidate — Krishanti Vignarajah, a former aide to Michelle Obama whose chances are quite literally slim and none.

It is a giant puzzle that could get more complicated as the contenders choose a lieutenant governor running-mate. Plus, we haven’t even started the endless rounds of gubernatorial debates throughout the state.

So stay tuned as the political world turns in Maryland: 2018 could give voters a wild roller-coaster of a ride.

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Hogan vs. the Legislature: A Constitutional Clash

By Barry Rascovar

On the surface, it seems much ado about nothing – an esoteric argument most folks can safely ignore. But the dispute over whether two state Cabinet appointees can legally remain in office without Senate confirmation raises an important constitutional question that cries out for judicial resolution.

Gov. Larry Hogan precipitated this divide with some unorthodox moves that appear aimed at stripping power from the General Assembly and enlarging his ability to ignore actions of the state legislature when it comes to appointments subject to Senate confirmation.

Following hearings earlier this year, two of Hogan’s Cabinet nominees raised alarms for lawmakers. That is precisely the way the “advise and consent” section of the state Constitution is supposed to work. It’s one of the defensive mechanisms James Madison and Alexander Hamilton inserted into the federal Constitution – and embraced by most states – to place a brake on the chief executive’s power.

It provides a chance for legislators to interview Cabinet nominees, question them on the issues and pass judgment on their readiness to serve in important, decision-making state jobs.

If the appointees are found lacking, the Senate can vote down the appointments. That’s how American government works. Each branch plays a role that is independent yet interdependent. Both the chief executive and the legislative branch must give the OK.

But what happens when the governor doesn’t want to share power, when the chief executive thumbs his nose at the legislative branch?

That’s the situation Hogan and lawmakers are facing.

Schrader and Peters

Hogan’s choice for health secretary, Dennis Schrader, has good management credentials, a government background and good political contacts but no professional medical or academic health care credentials.

Constitutional Crisis

Interim Health Chief Dennis Schrader

Lawmakers on the Senate Executive Nominations Committee, after hearing from Schrader, became alarmed and delayed a vote on his confirmation. Then Hogan, surprisingly, withdrew Schrader’s nomination – even though he had assurance from the Senate president that the full Senate would eventually assent to Schrader’s appointment.

Senators had even more concerns about Hogan’s Cabinet appointment as Planning Secretary, Wendi Peters. She lacks any professional planning credentials. She worked as a paralegal and served as a Republican on the Mount Airy Town Council before losing a race for House of Delegates in 2014.

Legislators heard horror stories about Peters terrorizing Planning Department workers, firing them for little cause and creating an oppressive work environment.

That led the Senate committee to reject her nomination. But before the full Senate could finalize that move, Hogan withdrew Peters’ nomination, too.

Once legislators adjourned in April, though, Hogan re-appointed both to their jobs on an interim basis, sticking a thumb in the eyes of lawmakers.

Legislative counter-move

Assembly leaders anticipated Hogan’s move. They’ve seen how he insists on having it his way. So they inserted language in the state budget that bars Peters and Schrader from being paid after July 1 because they lack confirmation by the Senate committee.

Constitutional Crisis in MD

Interim Planning Secretary Wendi Peters

The state attorney general issued a legal opinion noting that Hogan has every right to reappoint the two Cabinet officials but the General Assembly has the right to cut off their pay checks because the two failed to gain Senate confirmation.

(Hogan’s office made the astounding statement that the elected attorney general’s opinion doesn’t count for a hill of bean but Hogan’s own, unelected staff counsel’s determination should be the last word.)

Then Democratic Comptroller Peter Franchot, who has continually shown an eagerness to side with Republican Hogan, did so again, announcing he would pay Peters and Schrader.

But the key signature on those paychecks isn’t Franchot’s but state Treasurer Nancy Kopp’s.

She read Attorney General Brian Frosh’s legal opinion. Frosh’s office is, after all, the constitutional authority for all state government agencies. As a spokeswoman for Kopp put it, “Her attorney is the attorney general” – not Hogan’s staff lawyer.

Kopp’s conclusion: She has no choice but to follow the guidance laid down by the attorney general and abide by the language added to the state budget. Thus, Schrader and Peters will not be paid until this disagreement is resolved.

Shaky Power-sharing

Since his election as governor, Hogan has inveighed against sharing power with the Democratic-controlled General Assembly. This is another example of his unwillingness to accept the limitations  laid down in the state constitution that make the two branches co-equal parts of Maryland state government.

Other governors, when faced with rejection of an executive department nominee would have moved on, recognizing that’s the right of the state senate. There are plenty of other positions Peters and Schrader could fill in Hogan’s expansive jobs orbit.

More important, there are plenty of better suited individuals who could ably fill those Cabinet slots, individuals that agree with the governor’s conservative views but are acceptable to Democratic leaders in the General Assembly.

That’s how governance is supposed to work in Maryland – and how it has worked in the past. Unfortunately, Hogan is looking for a fight rather than consensus.

This war of words could persist into the future if Hogan wants to it drag out, reappointing Peters and Schrader, then withdrawing their nominations before the full Senate votes to reject them, then re-appointing the two once next year’s session ends.

It would make a mockery of the “advise and consent” section of the Maryland Constitution. It would send a signal Hogan isn’t willing to share power.

That’s one of the reasons Hogan must take the matter to the Maryland Court of Appeals. When two co-equal branches of Maryland government disagree this strongly on the constitutional powers of the other branch, the third branch, the judiciary, is there to interpret the law and render a definitive answer.

Failure to seek a judicial decision on this constitutional issue would be playing politics instead of seeking a final judgment as to which side is right.

It’s time for Hogan to tell his minions to stop with the name-calling and angry allegations of unethical behavior and instead order his legal counsel to take the matter to court. It would be good for both feuding branches of state government. ##

 

Repeal Obamacare? Hogan’s Conundrum

By Barry Rascovar

July 10, 2017 – Though he’s a Republican, Maryland Gov. Larry Hogan must pray each night that his fellow Republicans in Congress fall flat on their faces in their concerted efforts to wipe out Obamacare and replace it with a vastly inferior health care safety net.

Hogan quietly voiced opposition to House and Senate “repeal and replace” bills in a statement he had issued in Annapolis while on an overseas trip.

He’s trying hard to avoid offending Maryland Republicans who support an immediate repeal of the Affordable Care Act. Yet he’s acutely aware of the harm, and human pain, such a move would have on hundreds of thousands of Marylanders.

Maryland is in a unique situation when it comes to the “repeal and replace” movement. Ending Obamacare could place this state’s entire hospital system in jeopardy. Hospitals in the Free State stand to lose a staggering $2.3 billion in Medicare and Medicaid payments if Obamacare abruptly ends.

Obamacare and Hogan

Maryland Gov. Larry Hogan

Some hospitals, especially in rural parts of the state and in poor urban neighborhoods may not survive. One national study indicated up to 50% of all rural hospitals in the United States could close under an Obamacare repeal. In Louisiana, Mississippi and Texas, up to 75% of rural hospitals could be driven out of business.

Nursing homes are under the gun, too, since two-thirds of its patients are on Medicaid, which is the primary budget-cutting target of congressional Republicans.

‘Tremendous Impact’

Passage of either the House or Senate repeal bills “could have a tremendous impact on Maryland,” according to the non-partisan Department of Legislative Services. This would “require the General Assembly [and the governor] to consider significant financial and policy decisions.”

That’s something Hogan cannot afford in 2018 as he runs for re-election. Yet the governor could find himself between the proverbial rock and a hard place next year, thanks to conservative Republicans in control of the House, Senate and White House.

The price to Maryland state government of an Obamacare repeal is in the billions. Maryland government would lose $1.3 billion in federal Medicare and Medicaid funds next year, growing to a loss of $1.5 billion in federal dollars in 2022.

If the law is repealed, Hogan and Democratic legislators in Annapolis would face a monstrous and agonizing choice.

Do they jettison Obamacare’s expansion of Medicaid that now gives health insurance to 421,000 state citizens, many of them children? Do they leave 1 million Marylanders now covered through subsidized private insurance plans or the Medicaid expansion to the tender mercies of insurance companies?

Or are Hogan and lawmakers going to jump in, swallow hard and raise taxes – in an election year – by a huge amount to cover the lost $1.35 billion next year?

That’s why deep down inside, Hogan really but really wants Senate Majority Leader Mitch McConnell and House Speaker Paul Ryan to give up their insistent request to wipe out Obamacare and instead work with Democrats on a compromise plan that preserves the best parts of the ACA and fixes what’s not working.

Seeking a Magic Bullet

The odds of McConnell and Ryan finding a magical “repeal and replace” formula that satisfies the majority of Republicans are not good. It may yet happen but time isn’t on their side.

The more voters learn about specifics of the Republicans’ replacement proposals, the stronger the opposition. Over the July 4 holiday, GOP lawmakers who dared to venture out received heated criticism from constituents.

Part of the problem is that McConnell and Ryan are attempting to peddle a plan that calls for an unprecedented version of “income re-distribution.”

Obamacare re-distributed taxes collected from the rich, insurance companies, durable medical equipment companies and tanning salons. The ACA spent that money to help provide health insurance to the poor and lower-income families.

Now Republicans are calling for a reversal of this process – giving back all that tax money to wealthy Americans and profitable corporations while stripping from the poor and lower-class much of their health care benefits.

It’s “Robin Hood in Reverse,” in this case congressional Republicans want to take from the poor and give to the rich.

Had the GOP plans created an alternative health care safety net that protected the rights of the elderly, poor and near-poor, the furor today might have been averted. But in their haste to wipe out Obamacare, Republicans in Congress failed to develop a legitimate replacement program that would make things better, not worse.

Obamacare in Maryland

In Maryland, there have been good results from Obamacare. The state’s uninsured rate has dropped more than half, to an all-time low of 6.6%. This is a godsend for hospitals, which saved $311 million in just two years due to the shrinkage of uncompensated care cases.

Big problems remain in the current system. Large premium increases are pending before Al Redmer, the state insurance commissioner (and a likely Republican candidate for Baltimore County Executive next year).

If Redmer approves large rate hikes, many of those currently insured may be priced out of the market. The state’s uninsured rate could soar and hospitals could run deficits.

But if Redmer rejects those big rate hikes, private insurers may have no choice but to drop out of the Maryland marketplace, as Cigna recently did.

Regardless of what happens in Washington and what Redmer decides, Maryland’s health-care safety net is in danger of tearing apart – unless Hogan and state legislators are willing to intervene.

That’s a tough call in an election year, especially for a governor who made a no-new-taxes pledge.

But the Republican governor and Democratic leaders in the General Assembly may have no choice.

Fixing the existing system is far easier than wiping out Obamacare and starting from scratch. Either way, though, State House politicians likely will have some heavy lifting to do early next year. ##

Is Maryland like Georgia and Wisconsin?

By Barry Rascovar

June 26, 2017—Taken together, developments in Georgia (special election) and Wisconsin (redistricting lawsuit) have been read by some Maryland Republicans as positive indicators that things finally are moving in their direction in a state overwhelmingly controlled by Democrats.

Retaining a Republican House seat in Georgia indicates to this state’s GOP that there’s been no mudslide erosion of support within the party from President Trump’s erratic behavior.

Getting the Supreme Court to jump into the Wisconsin redistricting lawsuit means Maryland Republicans might get their state’s gerrymandered, Democratic-leaning congressional districts thrown out, too.

Yes, hope springs eternal, but a closer look at these two developments paints a far less rosy picture for Maryland’s minority party, outnumbered 2-1 by Free State Democrats.

Expected Victory for GOP

The Georgia special election should have not been close. This is a solidly Republican district in the growing Atlanta suburbs that hasn’t had a Democratic congressman in almost 40 years.

In 2014, Republican incumbent Tom Price won by nearly 24%. Yet this year the GOP’s winning margin plunged to 4%.

That shrinkage mirrors similar special elections in Montana and Kansas where the Republican candidates won but not by landslide margins of prior years.

The Trump factor is largely to blame. His controversial early months in office have roiled much of the electorate, even in safe GOP districts. The public’s distaste for Trump hasn’t reached the tipping point yet, which is good news for Republicans.

In Maryland, that’s especially true for Gov. Larry Hogan as he begins to chart his re-election course. The last thing Hogan needs is the Trump albatross around his neck.

This explains Hogan’s unexpected decision to criticize the Senate Republican health-care bill. Polls show nearly two-thirds of Americans dislike Republican health-reform proposals and Hogan doesn’t want to be standing by Trump on the wrong side of this issue.

It’s hard to imagine that a newly elected president could become so unpopular so quickly. Trump in just five months has seen his popularity ratings drop into in the mid-30s. Some recent polls have him in the high 20s.

At this rate, imagine what the voting public will think of the incumbent president when they go to the polls in November 2018.

So while the results of the Georgia special election on the surface look good for Republicans, the narrowness of the victory should scare GOP incumbents in marginally Republican districts, such as the Miami and Philadelphia suburbs.

It underlines Hogan’s delicate balancing act in Maryland: retain absolute loyalty from rank and file Republicans while appealing to independents and moderate Democrats.

So far, Hogan has done a magnificent job avoiding GOP erosion while not losing his broader appeal.

Still, if 2018 becomes a “message election” in which voters across the country let Trump know they don’t like his bizarre performance, Hogan could struggle to win a second term. Separating his own political persona from Trump’s is key.

Gerrymandering Meanders into Court

Meanwhile in Wisconsin, a redistricting case involving gerrymandered state Assembly districts has made it to the Supreme Court. Republicans in Maryland have their own gerrymandering case in federal court.

Would a victory over gerrymandering in the Wisconsin case mean a huge GOP win in the Maryland case?

That may not be the logical conclusion.

Maryland’s redistricting maps, while grotesque in geographic design, don’t come close to carrying out one-party gerrymandering the way the GOP did in Wisconsin.Is Maryland Like Georgia and Wisconsin?

That state is marginally Republican. Barack Obama captured the Dairy State in 2012 by 7%, but Republican Gov. Scott Walker won reelection in 2014 by 6%. Last year, Republicans won the presidential vote in Wisconsin by less than 1%.

The 2011 state legislative redistricting map Republicans enacted packed Democratic voters into a small number of districts in the state’s two urban areas – Milwaukee and Madison. That allowed the GOP to create Republican majorities in nearly two-thirds of the state’s Assembly districts –a “baked in majority” of 20 seats. In recent elections, Republicans have gained 15% more seats in the legislature—despite the almost-even split in statewide races.

A district court and an appeals court agreed this sort of gerrymandering goes too far. Now the Supreme Court will hear arguments in the fall.

Maryland’s redistricting lawsuit is quite different. Plaintiffs face an uphill battle in spite of the Wisconsin court rulings. That’s because the voter registration numbers don’t appear to support the GOP’s contention that political gerrymandering severely discriminates against Republican voters.

The GOP complains about the 6th Congressional District, which used to be represented by Republican Roscoe Bartlett until Democrats re-drew the boundaries by attaching Democratic parts of Montgomery County to Republican Western Maryland.

Suddenly a district that elected Bartlett with 59% of the vote in 2010, swung Democratic, electing John Delaney in 2012 with 59% of the vote.

Yet that large Democratic advantage didn’t hold up two years later, when Delaney won by just 1.5% of the 6th District vote.

Last year, facing a weaker Republican nominee, Delaney won with 56%.

The voter registration in that district (based on the 2010 Census) is fascinating: 43% are Democrats, 31% are Republicans and the rest, 26%, unaffiliated, Green Party or Libertarian.

It’s a competitive district. If Delaney decides at the end of July to run for governor, the race for his congressional seat could be wide open.

That’s hardly a winning court argument against gerrymandering.

The 6th District also is fairly compact, even with the addition of the Montgomery County precincts (instead of moving directly east the district turns due south).

Moreover, there’s precedent for turning Western Maryland and Montgomery County into a single congressional district: For decades, this was the case with Republicans J. Glenn Beall Jr. and Charles “Mac” Mathias from Western Maryland representing the combined areas – without a peep about unfair gerrymandering.

Republicans also complain about the 3rd Congressional District’s weird shape (like “a winged pterodactyl” according to an appeals court judge). The GOP says this illustrates Democratic efforts to dilute GOP strength, since only 25% of registered district voters are Republicans and 55% are Democrats.

The litigants have a point on the complete lack of compactness. Their argument falls apart, though, over the dilution of GOP strength. It turns out the 3rd District’s party split (55-25%) almost precisely mirrors Maryland’s party split (55-26%).

Republicans may be at a disadvantage in all but one Maryland congressional district. However, that’s due to the GOP’s 2-1 voter registration deficit statewide.

Still, it would be in the public’s best interest for the Supreme Court to get involved, once again, and clearly delineate general rules for redistricting after the 2020 Census.

There always will be political manipulation – by either party. But if the high court rules that all districts must be compact, contiguous and respectful of neighborhoods and natural boundaries, it would go a long way toward straightening out the extreme gerrymandering that plagues far too many states.

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Humpty-Dumpty and MD’s Higher Education Dilemma

By Barry Rascovar

June 26, 2017 – It could be a cringe-worry moment when U.S. District Judge Catherine Blake finally rules on the lawsuit by black state universities demanding sweeping changes in Maryland’s public higher education system that benefit only their own campuses.

In no way is Judge Blake qualified to disassemble Maryland’s well-regarded higher education network and then re-assemble the pieces in an entirely new way that miraculously makes historically black schools integrated and thriving learning institutions.

Indeed, if she tries, Blake could make a costly, destructive mess of one of the nation’s better public higher-education systems.Humpty-dumpty and MD's Higher Education DilemmaShe needs to be reminded of the children’s rhyme – “all the king’s horses and all the king’s men couldn’t put Humpty-Dumpty back together again.”

Maryland has a shameful past when it comes to integrating its public colleges and universities. But in recent decades, things have changed markedly with continuing emphasis on providing formerly all-black schools with modern buildings and a lot more funding.

(Construction projects tell part of the story. In a two-year span, fiscal years 2013 and 2014, the four historically black universities received capital funds from the state totaling $202 million; nearby integrated universities – Towson, UB, UMBC and Salisbury – received just $108 million.)

Correcting this dreadful situation – historically black institutions are middling to poor in quality while other state universities are good to excellent – isn’t something a judge trained in the law is equipped to do. Professional higher-education experts are the ones who should be handling the details.

Cherry-picking Plan

Those representing black institutions have put forward a selfish $1 billion plan that cherry-picks from other public universities many of their best programs. Yet there’s no assurance any of the moves will make their institutions less segregated.

That’s because students cannot be forced to attend a specific university. Nor is there any guarantee professors would make the move if academic programs are transplanted to lesser-quality campuses.

Higher education is the ultimate in this nation’s free-market economy. Freedom of choice rules.

The popularity of historically black institutions has been on the wane for many decades. Students and faculty are voting with their feet.

No judge can stop that.

Ironically, the three Baltimore-area public universities under attack all are run by minority presidents (two blacks and a woman). And on all three campuses, integration of minority students is leap years ahead of historically black institutions.

Wrong Lens

Blake is viewing this issue from the wrong perspective.

Rather than perpetuate historic vestiges of segregation in public higher education, the judge should ask a panel of highly qualified educators to develop a plan that merges the weaker schools with their more successful counterparts.

The University of Baltimore, Towson University and UMBC are integrated and recognized by students and faculty as schools on the rise.

The same cannot be said for historically black institutions.

If the judge truly wants to do away with segregated classes, she should twin Morgan with UMBC; Coppin with UB; UMES with Salisbury University, and Bowie with UM’s nearby College Park campus.

At the end of the day, quality programs and quality students and faculty – black, white and tan – would be spread around all those campuses on a far more equal basis than at present. Most of the positive traditions of historically black facilities could be maintained as well.

Yes, we need to end racially segregated public universities. But that won’t happen by decimating Maryland’s integrated campuses.

Historically black schools should be honored for the positive role they played – out of necessity – for so long.

However, like the segregated era of men’s and women’s colleges, the time for maintaining and perpetuating public institutions that attract students only of one race should come to an end.

In the card game of bridge, there’s a tried and true rule: play to your strength. In Maryland’s higher education system that means strengthening the state’s best integrated and most academically successful campuses, not weakening them.

It’s a tough reality to swallow for proud alumni of the weaker institutions, but the best way to improve and integrate Maryland’s public universities is to transform the campuses that represent the state’s segregated past through mergers.

That way their historical achievements can be recognized and built upon as those beleaguered institutions become part of a more stable, inclusive and accomplished higher education universe.

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

 

 

Mission Impossible: Non-political Redistricting

 

By Barry Rascovar

June 12, 2017 – Holy mackerel! Can you believe this? Former Gov. Martin O’Malley has admitted politics played a big role in re-drawing Maryland’s congressional districts after the 2010 Census.

The state’s major newspapers and good-government groups went bananas. Editorial writers had a field day denouncing O’Malley and other Democratic leaders for this dastardly admission.

Politics determining the shape of new congressional districts?

What is this state coming to? Why it’s almost un-American!

Exactly which alternative universe are these people living in?

Politics and re-districting have been wrapped tightly together since the nation’s formative years.

Changing Legislative Boundaries

Remember Massachusetts Gov. Elbridge Gerry? (He pronounced his last name with a hard “G” but today everyone makes it sound like a “J.”)

In 1812, Gerry so badly contorted state Senate districts in the Boston area to benefit his Jeffersonian Republican-Democratic Party that the map resembled a mythological salamander. Thus, Gerry’s salamander-looking re-districting map, and today’s distorted district lines, became known as “gerrymanders.”

Mission Impossible: Non-political Redistricting

Famous redistricting map from 1812 newspaper resembling a salamander.

Political manipulation of legislative boundaries has been embedded in our history ever since – and for good reason. Once a political party seizes control, it wants to retain or enlarge that control through any legitimate means.

As New York Sen. William Marcy explained after Andrew Jackson’s 1828 victory led to massive patronage appointments by the new Democratic president, “To the victor belong the spoils” – including the ability to engage in partisan re-districting every 10 years.

Both major political parties do it.

In Maryland with its lopsided Democratic dominance that means Democratic gerrymandering.

Doing in Bartlett

Thus, Republican Congressman Roscoe Bartlett of Western Maryland found himself unable to win re-election after Democrats re-drew his rural, heavily Republican district following the 2010 Census, adding a vast swath of populous – and Democratic – Montgomery County.

In Republican states like Texas and North Carolina, GOP leaders have been even more brazen in their gerrymandering, earning rebukes from the Supreme Court for unconstitutionally discriminating against African Americans and Hispanics in re-drawing congressional and state legislative lines.

Maryland’s congressional maps may not be unconstitutional (so far) but they sure are bizarre.

Democratic Congressman John Sarbanes’ district resembles a winged, prehistoric dinosaur, according to one federal judge. Sarbanes should be embarrassed he pressed for those wildly distorted boundary lines. A number of other districts are highly unorthodox, or illogical, as well.

It wasn’t always like this in Maryland.

Ernie Kent, who drew the redistricting maps after the 1970 Census for Gov. Marvin Mandel, said the “overriding concern” in 1971 was “numerical equality” dictated by the Supreme Court’s one-man, one-vote ruling that called for equally sized districts with just 1% deviation.

Mandel’s one request of his “redistricting queen:” Protect the state’s first African-American congressman by keeping Parren Mitchell’s district totally within Baltimore City. This required juggling Congressman Paul Sarbanes’ district and swapping precincts [with] Congressman Clarence Long. “The rest was mostly determined by geography,” Kent recalls.

It helped that these incumbents were Democrats with the only Republican strongholds isolated in rural portions of the state.

Glendening’s Revenge

Kent says “the convoluted gerrymandering started with [Gov. Parris] Glendening . . . when he tried to punish Ben Cardin for having considered running against him for governor.” Cardin’s old district – coherent and compact – suddenly took on a grotesque U-shape, so much so “it became known as the ‘toilet seat.’ “

Note that Democrat Glendening’s boundary manipulation was designed to punish a Democratic congressman – intra-party gerrymandering. It failed miserably. Cardin kept winning re-election with ease in the “toilet seat.” He’s now a U.S. senator.

Kent sees no reason for Maryland to abandon the traditional method of re-districting “as long as so many other states controlled by the GOP gerrymander in their favor.”

Mission Impossible: Non-political Redistricting

Maryland’s Current Congressional Districts

In other words, “politics ain’t beanbag,” as the late U.S. House Speaker Tip O’Neill repeatedly said. (The original quotation comes from writer Finley Peter Dunne in an 1895 newspaper column, mouthed by his fictitious character, “Mr. Dooley”: “ ’Tis a man’s game, an’ women, childer, cripple an’ prhybitionists ‘d do well to keep out iv it.”).

Politics is a hardball profession in which the two parties engage in mano a mano contests for power. Unless both sides agree to support a nationwide, non-partisan redistricting system, there’s little chance for the kind of reform championed by idealists.

Republicans in Maryland are trying to persuade the federal courts that the gerrymandered Bartlett district amounts to unconstitutional discrimination against them.

There’s no question one political party is trying to disadvantage the other. But that’s the underlying basis of this nation’s two-party system.

A Supreme Court ruling to the contrary opens a Pandora’s box of unsolvable conundrums for the justices.

“Discriminated minority political parties” – Libertarians, the Green Party, the Constitution Party, the Americans Elect Party, the Independent Party and unaffiliated voters – all would demand that same recognition in re-drawing Maryland’s political boundaries.

If Maryland’s re-districting maps are unconstitutional because one political party gained a huge edge over other parties in re-drawing the lines, ipso facto, nearly every state in the union would find itself in the same boat. Sheer chaos.

Nine Supreme Court justices wouldn’t be enough to determine the new rules of the road for every congressional seat, every state legislative seat and every county council, city council and town council seat in all the states.

Far better for the high court to reverse its ill-considered determination to withdraw from redistricting disputes, except in cases of extreme discrimination against minority African American and Hispanic populations.

The Supreme Court could simply restore its earlier redistricting rules, which Maryland placed in its constitution for state legislative races in 1972: “Each legislative district shall consist of adjoining territory, be compact in form, and of substantially equal population. Due regard shall be given to natural boundaries and the boundaries of political subdivisions.”

Then everyone would know the perimeters for re-districting – compact, adjoining areas of equal population size that make every effort to respect natural and subdivision demarcations.

Asking for non-partisan panels to draw the boundary lines just isn’t going to happen in Maryland, Texas, North Carolina or most other states.

If there is to be a fairer system of re-drafting political boundaries, the high court needs to apply the same, basic guidelines it foolishly abandoned. That’s the best way to restore a semblance of fairness to what is inherently a political process.

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

Maryland’s Mixed Economic Messages

By Barry Rascovar

May 22, 2017 – Talk about sending mixed messages, the latest jobs report for Maryland can be read as good news or the precursor of bad economic news.

Maryland added 3,500 jobs in April. That’s good, right?

Well, yes, but remember in March Maryland lost 7,900 jobs.

Want another mixed message?

Maryland’s unemployment rate rose slightly to 4.3%. That’s a disturbing sign, small though it may be.

It indicates more people who had dropped out of even trying to find a job are once again seeking work. A larger pool of job-seekers could keep the unemployment rate in Maryland on an upward path.

Yet it’s a good sign that Maryland’s jobless rate remains a notch below the national unemployment rate of 4.4%.

Conflicting Federal Signals

If you want to see an even bigger mixed economic message for the Free State, look at what’s about to happen in dysfunctional Washington.

President Trump will be releasing his first budget this week for the fiscal year that starts Oct. 1. Early indicators point to a fiscal blueprint that slashes domestic programs especially for the poor and the environment but is exceedingly generous to the military.

How do you rate that package, good or bad?

Here’s one more: Trump trumpeted his “great day” in Saudi Arabia over the weekend, where a series of tentative agreements were announced.

Maryland's Mixed Economic Signals

President Trump and King Salman of Saudi Arabia

The White House claimed these still-evolving deals could be worth $110 billion, much of it in military equipment, plus a still-murky $40 billion joint infrastructure investment fund.

Good for the U.S. economy, right?

But these are merely “understandings” between the two governments. Nothing is written in stone.

First, these purchases may take a long time, if ever, to materialize. Tough and lengthy negotiations lie ahead.

Moreover, the Saudi government is demanding that a vast amount of the spending take place outside the U.S. – in the Arabian kingdom.

Lockheed Martin is trying to lock down $28 billion worth of military contracts with the Saudis, including air-missile defense systems and aircraft.

How much of this work will end up in Maryland remains unclear.

Signed contracts could be a long way off.

And the Saudi government is insisting much of this work be done in their own country. It’s part of the push by the deputy crown prince to move the Saudi economy away from its current over-dependence on petroleum production.

There’s also a sense of urgency in the kingdom to bring down the high unemployment rate among young adults who are well-educated but can’t find work.

So there may be less in Trump’s Saudi agreements for the U.S. economy than at first blush.

Budget Blues

Maryland’s bigger problem lies in the soon-to-be-unveiled Trump budget proposal.

The Environmental Protection Agency budget alone is scary: Eliminating the Chesapeake Bay cleanup program, doing away with lead-abatement funding, cutting air and water quality cleanup grants by nearly half and tossing out lots and lots of environmental regulations.

There’s even $12 million set aside for buyouts and early retirement offers – part of the EPA’s determination to shrink the agency and restrict its role in state and local environmental efforts.

The good news is that Congress can disregard Trump’s draconian domestic spending agenda, though it is likely to give the military a huge budget boost. How the American public perceives this dramatic spending shift may remain uncertain until the 2018 elections.

Maryland and Virginia could be the biggest losers.

Trump can accomplish a massive government downsizing without congressional consent. While Capitol Hill may give Trump more money than he requests for domestic programs, the president need not spend that money.

This could mean more Marylanders thrown out of work. For state government, it could lead to a drop-off in tax revenue, a budget crisis in the State House and rising demands from localities for the state to step in and fund programs losing federal support.

Yes, the glass these days can be viewed as half-empty or half-full.

Yet it is hard to see how this is good news for those in Annapolis who must deal with the economic fallout stemming from Republican downsizing efforts in Washington.

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Get Ready for Maryland’s Democratic Circus

By Barry Rascovar

May 1, 2017–If the election for Maryland governor were held tomorrow, Alec Ross would win: He’s the only one who officially has announced his candidacy.

Alec who?

Get ready for a circus of a gubernatorial campaign among Democrats. Ross is just the first of what could be a carload of clowns pouring out of a small VW Bug with the bumper sticker: “Dump Hogan.”

Good luck on that one.

Ross’ slick, four-minute video introducing himself is instructive. He lays out the “poor boy makes good through education” saga. The opening line of the video:

“Growing up in coal country taught Alex Ross about hard work.”

Get Ready for Maryland's Democratic Circus

Alec Ross

He stresses his days teaching sixth-graders at an inner-city Baltimore school.

Ross preaches the need for bold thinking and innovation, especially in the area of education. More than anything, he hammers at Gov. Larry Hogan “for allowing Donald Trump to bring his agenda to Maryland.”

That’s THE theme of the upcoming Democratic primary campaign. Every gubernatorial candidate will be shouting it from the hilltops.

Ross zeroes in on Hogan joining Trump’s controversial education secretary, Betsy DeVos, in a much-publicized photo-op session in a Montgomery County classroom. DeVos would love to see mass privatization of public schools – a radical but necessary solution in her eyes.

Ross attacks the education problem from the Democratic far-left rather than the Republican far-right. He’d use technology and a massive boost in schooling that prepares students for 21st century jobs. He wants to employ innovation to bolster public schools, not obliterate them.

He goes on to attack Hogan for “not standing up to Trumpism,” for failing to oppose Trump’s budget plan that would wipe out Chesapeake Bay cleanup funds.

It’s the first direct shot across Hogan’s bow in the governor’s race – but it will sound all too familiar by the June 28, 2018 primary.

Ross was a Hillary Clinton adviser on technology in the Obama administration. Innovation and looking at problem-solving differently is his thing.

But will that be enough to win an election?

Resume Gap

Ross, like many of the likely candidates, is a new face to most Marylanders. He has never been elected to political office for dog catcher or anything else. He’s taught in a classroom, written a book, held a federal job as an adviser but never been in the thick of local or state politics.

He’s lacking a key element on his resume.

That’s also the case for Jim Shea, a highly regarded Baltimore attorney who ran Maryland’s largest law firm for 22 years. Shea devoted considerable time serving on civic boards and public service commissions. His slogan: “A Fighting Voice for Maryland.”

No elected office appears on Shea’s resume.

Get Ready for Maryland's Democratic Circus

Jim Shea

His theme is similar to Ross’. On his website Shea says, “Maryland and our country are under attack by Donald Trump, a man who cares only about himself and who is hostile tour American way of life. Meanwhile, our governor sits silently, watching from the sidelines, even as the progress we have made in Maryland is threatened on a daily basis.”

This is why Shea is “laying the groundwork” to run for governor. “There is simply too much at stake.”

Making the Rounds

Funny, but that’s what all the governor wannabes are saying.

Both Baltimore County Executive Kevin Kamenetz and Prince George’s County Executive Rushern Baker have been making the political and publicity rounds for months laying their own groundwork for a gubernatorial run focusing on the Trump threat and Hogan’s “go along to get along” attitude.

Kamenetz and Baker, though, have limited appeal and are widely unknown outside their home regions.

Baker has an added problem: Another African-American, former NAACP president Ben Jealous, is talking about a run for governor. That could split this large, influential Democratic primary vote.

Get Ready for Maryland's Democratic Circus

Ben Jealous

Jealous wants to be the far-left Bernie Sanders clone in Maryland, preaching a social agenda of drastic change. That may have limited appeal in a state where Sanders lost by nearly 30% to the more moderate Clinton in Maryland’s presidential primary.

Meanwhile, three-term Rep. John Delaney is looking at a run for Government House.

He’s much more in the moderate, “blue dog Democrat” camp, touting his own innovative plan for a massive re-building of America’s infrastructure and sharply taking Trump to task for his radical proposals.

Delaney, too, is little known outside his sprawling Western Maryland/Montgomery County congressional district.

One advantage: He made a fortune (estimated net worth: $180 million) by establishing two New York Stock Exchange companies that helped small and mid-sized businesses obtain loans.

Delaney could self-finance a very expensive campaign (think former New York City Mayor Michael Bloomberg) to make himself and his ideas a household word.

Montgomery Candidates

Name recognition would not be Doug Gansler’s problem – a two-term state attorney general and a two-term state’s attorney in populous Montgomery County.

Gansler, though, is remembered for a disjointed and sometimes comical race for governor in 2014 when he received only 24% of the Democratic primary vote.

He’s  now got the advantage of being an outsider (working for a Washington, D.C. law firm) and he has a statewide network of contacts and voters who supported him in the past.

He and Delaney, however, might split the key Montgomery County vote.

Gansler’s plight could become even more perilous if another Montgomery politician jumps into the race – state Sen. Rich Madaleno, a vocal foe of Hogan’s legislative policies.

Get Ready for the Maryland Democratic Circus

State Sen. Rich Madaleno

Madaleno would capture much of the state’s gay vote (as Del. Heather Mizeur did in the 2014 primary with 22%) and would be a popular choice in his home district.

His leadership role in Annapolis on budget issues isn’t well known and could relegate Madaleno to a back seat in a statewide race.

There’s also a chance still another Montgomery County politician could be pushed into the governor’s race – Attorney General Brian Frosh.

He’s been a popular AG and has not hesitated to criticize Trump. Frosh is positioned to grab tons of headlines in the next year, thanks to legislation passed over the governor’s veto giving Frosh full power to file suit against Trump actions if he deems it appropriate.

Frosh is a quiet, often cautious, liberal Democrat who could be viewed as a bridge-building unifier within the party. 

All of these contenders will be singing from the same “Dump Trump/Hogan” hymnal. How Democrats figure out which one is best positioned to take on a hugely popular, moderate Republican governor is the big question.

Or will the Democratic primary turn into a destructive civil war in which the party’s far-left, “progressive” wing wins a Pyrrhic victory, with little or no chance against Hogan in November? 

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