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January 29, 2007

General Assembly Journal 2007 - Volume 2

Richard B. Weldon Jr.

Like a good road map, a review of the major issues pending before the General Assembly helps determine the direction our state is headed.

So, here is my version of the big issues facing Gov. Martin O'Malley and the Maryland General Assembly in the remaining days of this session.


New governors get to put their stamp on the first days of their administration by the delivery of their first budget. The constitutional deadline for the delivery of the budget follows the governor's inauguration by a matter of days. In reality, governors - and their phalanx of advisors, consultants, and hangers-on - have the months between the election in November and mid-January to get it together. Besides, the outgoing governor prepares the budget and hands it off to the incoming executive.

Governor O'Malley's biggest surprise was his unveiling a budget that spends almost the entire Rainy Day fund salted away by former Gov. Robert L. Ehrlich, Jr. The FY 2008 O'Malley budget depends on an almost $1.2 billion one-time transfer of these funds to achieve balance.

Spending grows at 9% (less than the spending growth under Governor Ehrlich), but at the same time, revenues are only projected to grow at 4%. That 5% gap is what the budget analysts like to call the structural deficit, the process by which the state projects spending more than it takes in.

Governor O'Malley made a lot of promises to get elected. A budget surplus could be used in one of two ways. The governor could reduce his spending plans, controlling the obvious political urge in order to carry revenue forward into the really lean years ahead. Another choice is to over commit in the short term, fulfilling just enough promises to keep the special interests happy.

Our new governor has chosen the latter, and he plans to start by fully funding the Thornton education requirements, adding $400 million in school construction funding, committing to healthcare expansion, and protecting popular environmental programs.

The FY 2008 budget will be balanced, and it will be done without the trauma and frustration of the last four years. The big problem lies in the FY 2009 budget, especially with no slush find available to make the problem disappear.

That leads us to the next category:

Tax Policy

Acknowledging the problem with FY 2009, the legislative leaders and Governor O'Malley have already begun talking about "studying" the state's revenue structure. Uh oh, spaghetti-o! When legislators start studying revenue, it usually means that the study will result in the need for more money.

The problem is exacerbated here, since these same leaders have also mentioned the "fairness" of the tax collection process. It's taken a while to figure this out, but making tax collection more fair means collecting more taxes from the people who can pay.

You don't need to be a part of the study group. Here's what they'll deduce after a year of "study." Maryland needs slot machines, probably at horse racing venues. Sure, you've heard that before. Bob Ehrlich spent four years telling us that. The difference is that Governor O'Malley is something Governor Ehrlich wasn't; he's a Democrat!

Slots alone won't plow us out of the deficit spending deal. In addition to slots, the majority will also propose increasing the state sales tax from 5% to 6%, and may even throw in an expansion to cover professional services.

Since the books on raising revenue will already be opened, and transportation funding will be a problem, look for this study group to suggest a gas tax hike, too. Might not work if pump prices are high next year, but expect an argument that we have to support four major mass transit systems, buses, the airport, and the port facilities in Baltimore.

Public Education

Legislators are terrified that a huge percentage of Maryland students, currently facing mandatory passage of the standard assessment tests, will fail the tests and create a huge outcry from parents.

In spite of all of the enthusiasm for testing and measuring, look for the General Assembly to roll back or extend the implementation for these tests until local boards of education can guaranty that most kids will pass.

State Superintendent Nancy Grasmick may be running on borrowed time, as Governor O'Malley has already said that he looks forward to the day he can work with an education secretary he can trust.

The Environment

Clean cars are the key to a miracle effort to eliminate airborne pollution. A bill to require Maryland car dealers to comply with the California Emissions Standards Board will pass this session, in spite of an aggressive attempt by new car dealers to kill it.

Smokers, who enjoy a cigarette after dinner out or over a Jagermeister at the corner pub, have a lot to fear about this session. Both places may soon be off limits to smokers, as the Clean Indoor Air Act looks to be picking up steam.

The bill has been moved from the Health Committee to the Environmental Matters Committee, as the advocates for a total indoor smoking ban found more votes over there. In the end, it may not matter, since other advocacy groups are targeting an increase on cigarette sales to help pay for.

Health Care

Some form of a major healthcare access bill will pass this year. The only real question is how extensive will it be; and will smokers foot the bill for other people's health coverage. A coalition of progressive groups is arguing for a $1 per pack tax increase to pay for healthcare for the poor. They anticipate that the tax increase will cover 60,000 individuals.

The Speaker of The House of Delegates set a goal of reducing the uninsured in Maryland by 50% over the next four years, and given that 850,000 people lack health insurance, there will have to be a more comprehensive solution.

Rumor has it that the House may pass a bill using the cigarette sales tax as the funding mechanism, but the Senate Finance Committee chairman, Sen. Thomas "Mac" Middleton (D., Charles), a former tobacco farmer, isn't too crazy about it. Another possibility is the significant surplus held in the Maryland Health Insurance Plan.

Whatever the final funding details, expect historic gains for the working poor in accessing quality, affordable healthcare services.

Next time, we'll look at some major social issues and electoral reform.

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