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April 16, 2007

General Assembly Journal 2007 - Volume 13

Richard B. Weldon Jr.

The 423rd Session of the Maryland General Assembly will be known more for what didn't get accomplished than for what did. In past years, I've suggested that sessions are often measured as much by the bad stuff that doesn't happen as the good stuff that does. Here's a twist on that idea.

Take, for instance, the budgetary perfect storm: the FY09 budget will be between $1.3 and $1.6 billion out-of-balance, depending on how far below expectations revenues come in. There is no reserve left, as the piggy bank was broken by the O'Malley Administration in order to balance the FY08 budget.

That piggy bank, known as the Rainy Day Fund, is intended as the fallback during bad times. Without those reserves, the choices are limited to cuts in spending, transfers of state obligations down to local government, and tax or fee increases.

Gov. Martin O'Malley wanted to take 90 days to build a rapport with the legislative leaders. He did that. His priorities at his inaugural demonstrate a mixed reaction, but to be fair, he did get a number of high profile initiatives through.

His most important goal wouldn't be measured by the passage of bills, though. The fact that he was able to rally House Speaker Mike Busch (D., Anne Arundel) and Senate President Mike Miller (D., Prince George's/Calvert) to set aside four years worth of differences meant that when he needed the Democrat vote, he got it. Nothing in Annapolis is more important.

The Living Wage bill is a great example. This is a terrible piece of legislation, even by liberal Maryland legislative standards. This bill creates a dangerous disparity, in that state contractors would have to pay a worker $11.30 per hour to work on state contracts in Baltimore City, Prince George's, Baltimore County, Montgomery, Howard, and Anne Arundel County, while contractors elsewhere would only have to pay a "living wage" of $8.30 per hour to their workers. Rest assured it costs as much or more to live in Frederick County as it does in many of these other jurisdictions.

The Democrat leadership always trots out the "One Maryland" theme, their hollow claim that we're really one big state with shared interests and common problems. How are we truly One Maryland if wage earners in the counties with the highest number of legislative votes always benefit disproportionately?

Gov. Robert L. Ehrlich, Jr., would have vetoed this stinker so fast he might have smudged the ink! Governor O'Malley, deeply beholden to the labor unions for their electoral help and campaign cash, gathered President Miller and Speaker Busch together to figure out how to expedite the living wage legislation that was languishing in legislative committees.

Their conversation led to lightening fast legislative movement. In previous coverage, I've talked about how long it takes a bill to work its way through the committee process. Normally, months, not weeks, is the unit of measure.

In the case of this bill, and after the governor made his preference known, the bill was voted out of committee and heard on the floor within 24 hours, not 24 days.

You see, this living wage scheme is one of the highest priorities of organized labor. It works like this: Big labor no longer focuses on the traditional workforces we associate with the union movement. The majority of union jobs now and in the future are government workers, not heavy, dirty industrial jobs.

Organized labor wants to drive the cost of state contracting up so high that state agencies can no longer justify outsourcing tasks. One sure way to do that is to create this scam called a living wage. If living wage contracts are too expensive, then state agency heads will request additional in-house state workers to do the jobs.

The unions will in turn organize those new workers to collect their union dues and inflate their membership and political influence, and the cycle continues.

So, while unions celebrate the passage of their top priority and taxpayers face the increased costs of state contracts, the looming fiscal crisis overshadows the post-session celebrations.

Governor O'Malley will be focused on his StateStat initiative, a management tool based on statistics and measurements of performance that had proven very effective in Baltimore during his terms as mayor.

Expect some savings, possibly even major ones, prior to the budget debates of next session. Unless StateStat is imbued with magic last seen during the days of Harry Houdini, it won't be enough to solve the state's fiscal problems.

The only question on tax increases is when and by how much? If Senator Miller, Governor O'Malley, and Speaker Busch reach an agreement in principle, there may be a Special Session in either early fall or just prior to next year's session.

If no agreement can be reached before January, the tax increase discussion will overshadow everything else next year. The mystery will surround Speaker Busch and his past aversion to discussing slots as a revenue alternative. That will test Governor O'Malley's negotiating prowess.

In the end, the speaker might blink on slots if he gets a broad-based tax increase. He really wants to see a major healthcare access expansion and new stricter environmental controls. Both programs will cost big money.

An increase in the sales tax, coupled with a limited slots initiative, will generate enough revenue to fund the existing budget. Expanding the newly raised sales tax to cover untaxed services will add enough to allow Governor O'Malley to increase spending on several pet projects (including those that matter to Speaker Busch). A cigarette sales tax increase will pay to expand healthcare access, and a gas tax increase will allow for more roads and mass transit.

In my next column, I'll focus on specific bills and the policy debates that dominated the now-concluded 423rd General Assembly session.

Yellow Cab
The Morning News Express with Bob Miller
The Covert Letter

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