By Barry Rascovar
OUCH! That’s the sound coming from Anthony Brown’s campaign headquarters after hearing of a $405 million drop in expected state revenue over the next 21 months.
This is bad news for the lieutenant governor’s gubernatorial drive.
The shrinking revenue forecast not only buoys Republican Larry Hogan’s campaign, it powerfully reinforces Hogan’s central theme: Maryland’s budget is out of kilter and in need of serious overhaul.
Hogan received an unexpected boost last week from Democratic Comptroller Peter Franchot’s sharp critique of the state’s liberal Democratic spending policies.
At Wednesday’s Board of Revenue Estimates meeting, Franchot took to task the “What, me worry?” attitude being taken these days by Gov. Martin O’Malley and Brown when it comes to Maryland’s continuing revenue shortfalls.
Indeed, Franchot’s comments could be grist for future Hogan ads.
Ignoring bad news
For example, the state comptroller took umbrage at the O’Malley-Brown administration’s Scarlett O’Hara approach (“tomorrow is another day”) toward bad economic news:
“. . . we need to accept that sluggish growth and challenging economic conditions have become our new normal. It feels like we sit at these meetings every quarter, hopeful and determined that ‘next year will be the year’ when the recovery takes hold and is felt broadly throughout the economy. Yet, another year has passed, and ordinary families and small businesses haven’t even recovered to where they were before the financial collapse. . . We need to recognize that hope is not an economic strategy.”
That’s a damning criticism aimed squarely at the governor and lieutenant governor.
Franchot laid out a few of the bleak economic numbers:
“Maryland’s 6.4 percent unemployment rate is higher than the national rate of 6.1 percent – something we’ve only experienced twice in the past three and a half decades. . . . In terms of wages – the oxygen working families need to survive – Maryland’s average wage growth was just 0.4 percent in the first quarter of 2014. . .
“Essentially, workers perceive that their take-home pay is headed in the wrong direction and the purchasing power for Maryland families is, in reality, diminishing.”
This is exactly what Hogan has been saying.
Maryland’s economy, Franchot notes, “didn’t grow at all last year – with a 0 percent GDP growth for 2013.”
That is an ominous indicator which the O’Malley-Brown team is blissfully ignoring.
Why? Because it is politically unpalatable.
Hesitating to act
Here’s the hard truth, according to Franchot:
“We simply can’t assume that we’re around the corner from returning to the way it was, and back to the decisions we could afford to make in Maryland as a result.”
Yet no one is rushing to close this new revenue gap in the state’s budget calculations and tighten up on state spending.
Brown doesn’t want to announce unpopular cutbacks during an election campaign; O’Malley would rather delay nasty decisions until he leaves office.
Brown is ignoring the reality that Maryland could face difficult budget years ahead that won’t allow for the raft of social programs he’s promising voters.
What we need, not what we want
Franchot sagely put it this way:
“As state policymakers, we need to be smart in how we spend taxpayer dollars, recognizing that to invest in the things we need, we have to forego many of the things we simply want. . . ”
That’s what Larry Hogan has been preaching on the campaign trail, albeit in vague, superficial terms.
It is folly to assume, as Brown does, that there will be hundreds of millions, if not billions, of dollars available for his expensive campaign proposals. That list starts with a statewide pre-kindergarten program and tax breaks for veterans.
Neither may be affordable in the current economy.
Are voters listening?
But are voters listening? Do they understand that what Brown is promising them isn’t deliverable under the present sluggish economy Maryland confronts?
Do they understand that Maryland could face difficult times unless it reins in its borrowing and its overspending?
The public’s grasp of American economics isn’t very deep. Numbers tends to make people’s eyes glaze over. That’s what Brown is counting on.
Meanwhile, the Scarlett O’Hara approach to managing Maryland’s chronic structural deficit continues. Wishing that tomorrow will bring us blue skies and strong economic growth isn’t enough.
Franchot is right. Hope is not a viable economic strategy.
Barry Rascovar’s blog is www.politicalmaryland.com. He can be reached at firstname.lastname@example.org
For eight years the O’Malley/Brown juggernaut has driven the car to the left side of the road and we’ve wound up in a ditch. So Mr. Hogan is the guy coming along in a tow truck whose purpose is to pull the car OUT of the ditch – and Brown says that’s going in the wrong direction?!?
Just goes to show you what kind of crooks they really are. OWEMALLEY and OWEBROWN have run this Stae far info the ground. It will take tight constraints by
the team elected this year. frankly, I see OWEBROWN running us deeper into the hole….. Time to just cut my losses and move…..
Brown keeps saying that Hogan wants to “take us back”.Well , I hope he does. I hope he takes us back to when you could actually afford to live in this state. Back before O’Malley/Brown raised taxes, fees, ant tolls a whopping 40 times. This, in a state that is already in the top ten for taxes.
With all the EXTRA money coming from the casinos and the Maryland lottery, plus the increase in tolls, gas tax, cig.tax and the other 45 taxes O’Malley and Brown have raised, not to mention their rain tax this is nuts. Somebody is either stealing a lot of money or they just don’t have a clue on what they are doing. The taxpayers put over five hundred million into the state roads fund only to have it moved to the general fund and then had their tolls raised to be taxed yet again. There is a lot of corruption going on here and both of our leaders need to be investigated.
Franchot raised some major concerns about state fiscal and budget policy and the absence of a real sustainable economic recovery since 2008, including a projected massive point four billion dollar revenue shortfall. Rascovar is entirely accurate when he points out that the Brown platform requires that NONE of the above be true– I liked the analogy to Scarlett O’Hara’s doomed worldview in Gone with the Wind.
I understand that Franchot’s views were raised in his official capacity during a public meeting of the Board of Public Works. Where can the concerned citizen find a copy or transcript of the entire remarks? Mr. Rascovar is an equal-opportunity muck-racker in the best tradition of activist journalism, but the concerns raised by Franchot are so important to Marylanders that citizens need to be able to review Franchot’s public comments directly.
The tax and squander team Brown/O’Malley are happy to hide the truth how they are destroying the ability of Maryland to recover from it’s economic disaster. The fact that we are losing businesses and people due to their ridiculous and deleterious taxes and overly constrictive rules and regulations. What disappoints me is that what Mr. Franchot contends is not front page Sun Paper. Could the Sun be in cahoots with our corrupt administration?
Franchot and Hogan are nominally correct to say the state’s budget growth rate exceeds the state’s GDP growth rate (a condition existing since before 2008.)
But they are wrong on many levels to adopt conventional wisdom that GDP growth rates are a reasonable proxy for measuring the expansion of government or its growth rate.
MD Observer please explain? The reason why GDP growth is taken as a proxy for measuring expansion of tax revenues (not necessarily expansion) is that the state collects the majority of its revenues from income and sales taxes. Since GDP represents the value of the productive economy, this seems like a pretty reasonable proxy. I am being honest – I don’t understand why it’s wrong, especially on “many levels”, and would appreciate a brief explanation.
Guess he felt he owed you no answer.. Probably Trolling for OWEBROWN AND OWEMALLEY!