General Assembly Journal - Part 13
March 10-14, 2003 A Political Train Wreck
I’ve been predicting an impending conflict for the last month and a half. Well, it happened last week. On Monday, while I was sitting in a briefing by Steve Larson, the State Insurance Commissioner on the CareFirst conversion, Gov. Robert Ehrlich was once again massaging the video lottery bill.
The latest tinkering has the track owners, several of whom are new entities enticed by the prospect of slots, receiving a substantial increase in the proceeds. I can already hear your question. If track owners are getting more, and the revenue prediction is established, who is getting the shaft?
The true answer is probably EVERYONE, but certainly schools and education are going to get less money under the revised proposal. All of the Republicans who were less than thrilled with supporting slots, but were willing to do so anyway to help their Governor, now are faced with a much less appealing bill.
With that framework established, the Board of Revenue Estimates released their "revised" revenue forecast on March 11. Here’s an Annapolis insider tip. When you hear that a revenue estimate is being revised in an economic downtown, hold onto your hat and your wallet. This week’s announcement has had that exact effect.
The revised revenue estimate indicates an additional shortfall of $200 million dollars. Let me repeat that: We are now looking at $200 million dollars less in FY ’04 than we were one week ago. Even with slots, we were $200 million short of a balanced budget. That shortfall was going to be made up with additional budget cuts beyond those proposed in the Governor’s FY ’04 proposal. Now the bogey is $400 million.
Governor Ehrlich is on record opposing broad-based tax increases, saying so several times during the campaign. Some question has emerged about whether he did or didn’t qualify that promise, and whether he included all taxes or just the most unacceptable.
This week his advisors, primarily Chip DiPaula (Director of Budget and Management), recommended that the Governor consider putting out some feelers on revenue generators (read tax increases). Remember that House Speaker Mike Busch (D., Anne Arundel), has been recommending tax increases for at least a month.
The Republican Caucus called a special meeting for Wednesday, March 12. The Minority Leader, Delegate Al Redmer (R., Baltimore Co.) wanted to brief the Republicans in the House on those feelers the administration was putting out. The Governor is willing to consider the following:
1. Diverting General Fund (GF) revenue from paying off debt service. This action would free up substantial GF dollars for use on high priority issues, while forcing the Board of Public Works to raise the property tax to cover the debt service. This would mean a 5-cent increase in the property tax rate, from eight cents to 13 cents per hundred dollars of assessed value.
2. Revising the proposed business "loophole closures" from a series of smaller changes to a single surcharge of 1 to 2% on all businesses in Maryland.
The argument from the administration and the Republican leadership is that the property tax issue is an easy one to layoff on someone else. I disagree. In fact, I think voters find that kind of logic both demeaning and offensive. If we need more money, we should be able to describe and justify that to our constituents. If we cannot, then we shouldn’t depend on fuzzy logic and obfuscation to slip through a tax increase.
The revised revenue estimate places a higher premium on passage of the slots. Remember that the tax increases I described above are designed to cover the revenue revision shortfalls. Without slots, the budget hole doubles the $200 million figure. Without slots, the current budget is out of balance by over $400 million. The only way to get there is to look at either a sales and/or income tax increase, or to re-visit our commitment to full funding of the recommendations of the Thornton Commission recommendations.
The Minority Caucus has weighed in. I couldn’t find anyone in the caucus who would be supportive of a tax increase. In fact, the Minority Leader’s statement to the media showed the division. Delegate Redmer is quoted as saying: "The caucus supports slots and cuts. Anything beyond those two and the caucus is squishy."
A Cruel Irony
Everyone knows that I worked for Jim Grimes. You may not know it, but I consider him a personal friend. I will readily acknowledge that when it comes to Jim, I am NOT objective.
That said, today’s (Thursday, March 13) Washington Post Style section included a piece called Strife of the Party. In that column, we find that a certain Annapolis reporter for The Washington Times was arrested for his behavior at a private party in Annapolis. The reporter allegedly consumed more alcohol than his system could absorb, and he groped a female party guest and generally conducted himself in a very inappropriate manner.
This kind of thing probably occurs with some frequency in Annapolis, but frankly it shouldn’t. As the father of two lovely young women, I find this conduct nauseating.
Now for the rest of the story: The Annapolis reporter for The Washington Times is none other than Steve Miller, the reporter who spent the better part of two years writing stories in the Frederick News Post about the allegations of sexual conduct and a supposed cover-up by the Grimes Administration. In retrospect, there never was a cover-up.
Looks like Mr. Miller should re-read his "award-winning" articles for some suggestions on how to conduct himself. If he can’t, maybe he could call Jim Grimes. I know for a fact that Jim could teach him a thing or two about how to act like a gentleman!