Wednesday, April 30, 2008

Put Your Finger in the Wind

A couple weeks ago, Governor O’Malley declared that wind turbines could not be constructed on state-owned land. While the Governor’s desire to protect forest land in Western Maryland is understandable, the simple truth is that his ambitious goals on limiting greenhouse gas emissions cannot be met without wind power.

The end of the last general session saw the defeat of a bill backed by the Governor that would have mandated a 25% emission reduction by 2020. At the same time, the Governor worked hard to secure a deal with Constellation Energy to recover rebates for customers and protect them from liabilities associated with shutting down the Calvert Cliffs nuclear reactor. And the Governor has a long-standing goal of limiting electricity rate increases for consumers. The only way to reduce emissions, restrain the cost of electric power for Maryland ratepayers and retire Calvert Cliffs simultaneously is to combine conservation with lots of new green power sources. That means windmills.

Longtime readers will recall the love affair some of my union members have for nuclear plants. My account may be true, but it is sometimes more complicated than that. The major problem with nuclear energy is the storage and disposal of radioactive waste. The national building trades unions have long favored construction of a waste storage site at Yucca Mountain, an hour’s drive outside of Las Vegas, but the issue strained the Southern Nevada Building Trades. Over ten years ago, at a chair-throwing, fist-brandishing meeting, the local trades voted to support the storage plan after much anguished debate. Balancing millions of man-hours against creating a nearby radioactive dump in the desert was a tough call for them.

The building trades have no ambivalence about wind power. My union pursues it with unrestrained eagerness and assigns international representatives to hunt it down. We have worked for most of the biggest wind generators in the country, including Florida Power & Light and Invenergy. Windmill construction involves laying power cables, pouring concrete pads, erecting and installing turbines and performing endless maintenance work. In Maryland, our total package is over $30 per hour, including payments for training, health and welfare and pension benefits. These jobs are as good as gold for the state.

Unfortunately, Maryland is not moving fast enough to realize this promise. In 1991, the state generated 39.9 million megawatt-hours (MWH) of electric power, of which 57% came from coal, 23% came from nuclear, 10% came from petroleum and 4% came from natural gas. Only 1.2% came from non-hydro renewables. In 2006, the state generated 49.0 million MWH of electric power, of which 60% came from coal, 28% came from nuclear, 1% came from petroleum and 4% came from natural gas. Only 1.3% came from non-hydro renewables. We are as dependent on fossil fuels and nuclear energy as we have ever been. What will happen when Calvert Cliffs, the state’s sole nuclear plant, is retired?

Wind power is becoming a more versatile source of energy with each passing year. Offshore developments are gaining traction, including this huge one planned for the British coast. Farmers are using them to supplement agricultural incomes. Some firms are even proposing roof-top windmills. But for the most part, windmills still have an important drawback: they require lots of land to produce modest amounts of power. A typical industrial wind turbine can put out anywhere from one-half to two megawatts (MW) of power, with a megawatt representing enough capacity to power 600-1,000 homes. So a development of 25 windmills on 100 acres could produce 12-50 MW. A fossil facility on a site of similar size could produce hundreds, even thousands, of megawatts. We do need land to build windmills and the Governor’s blanket prohibition does not help.

The United Steelworkers Union played a significant role in defeating the emissions bill. Their concern was that emissions restrictions would kill employment in their industries. The key to winning labor support for green energy is to tie it to the creation of lots of high-paying jobs. One way to do that would be to offer tax breaks to windmill owners (including small owners like farmers) that would only apply to windmills constructed by contractors with benefit plans and registered apprenticeship programs. The industrial facilities that employ the Steelworkers could use a cap-and-trade system to buy clean power credits from windmill owners. The state would get clean energy, residential and business consumers would have abundant electricity and less upward pressure on rates, power companies could avoid blackout risks and hundreds, maybe even thousands of Marylanders would have access to middle class jobs with training and benefits. Yes, it is possible for environmentalists and building trades guys to sit down at the same table, eating tofu and slamming cold ones, together.

So come on, Governor, stop shooting the breeze! Let’s get to work.

Monday, April 28, 2008

MoCo: Who Cares About Hospitals? We Want an Arena!

Washington Adventist Hospital’s impending move out of Takoma Park is the biggest development in Montgomery County’s health care system in decades. So why is the Montgomery County government’s reaction one of complete silence?

Currently located in Takoma Park, Adventist is the second-biggest hospital in Montgomery County with 294 beds. After a four-year battle with its neighbors over an expansion plan, Adventist announced it was leaving Takoma Park in 2005. While the hospital’s CEO denied that the conflict with neighbors motivated the move, he did say that its current 14-acre site was not big enough to accommodate the hospital’s long-term needs. Two years later, Adventist purchased 48 acres near US-29 and Cherry Hill Road for a new campus. Montgomery County’s Planning Board unanimously recommended a special exception for the hospital’s land use last week. The final decision on Adventist’s move will be made by the Maryland Health Care Commission and many expect Adventist to file its Certificate of Need (a required application from hospitals for major capital projects) this August.

Holy Cross Hospital is 3.6 miles up Sligo Creek Parkway from Adventist and is the county’s largest hospital (404 beds). When Adventist announced its land purchase, Holy Cross reacted with alarm. Holy Cross told the Gazette and its neighbors that it would be “overwhelmed” by former Adventist patients from Down-county, Prince George’s County and the District if Adventist were allowed to flee up US-29.

This matter is not simply a battle between hospitals. The neighborhoods around Holy Cross have been moved to militancy in recent years by the treacherous conditions at the Intersection of Death, a failed development proposal at the Forest Glen Metro station and a giant expansion planned for the Sligo Creek Golf Course. These same neighborhoods are negotiating with Holy Cross Hospital over its own 100-room expansion after going through a previous one completed in 2005. If Holy Cross is correct, Adventist’s move will plug up Georgia Avenue (including the IOD) and Sligo Creek Parkway, flood Holy Cross’s emergency room and produce enormous health care access problems for Down-county patients.

But Holy Cross may not be correct. Since it is hardly an impartial observer of Adventist’s move, its arguments should be evaluated by an independent entity. Last year, both Holy Cross and my civic association wrote to the Montgomery County Council asking them to fund a health impact study on the effect of Adventist’s move. While the Maryland Health Care Commission is a state agency, it does take into account the views of county governments in deciding on Certificates of Need. Surely, we thought, such a significant event in the county’s health care system could not pass without comment by the county government.

Council Member George Leventhal agreed with us. A year ago, the Gazette reported:

HHS [Health and Human Services Committee] Chairman George L. Leventhal (D-At large) of Takoma Park proposed assessing the financial stability of the county’s hospitals, how moving one hospital would affect the others and how the changes would affect access to health care.

“We need to make decisions based on fact, not on the [back and forth] between hospitals. We don’t really know the effects of the move and we need to find out,” he said.
Despite Leventhal’s dogged advocacy, disagreements over the study’s scope delayed it and the county’s current budget problems ultimately killed it. And so the hospitals and their neighbors prepared for a grim showdown before the Maryland Health Care Commission, with both hospitals submitting their own Certificates of Need for their dueling capital plans and the Montgomery County government standing aside, arms folded, uninterested. Well, we thought, in bad budget times, few get what they want from the county.

And then this Gazette article crackled through the neighborhood like a midnight thunderbolt. While the county has dickered, bickered, delayed and ultimately abdicated any say on its hospitals, it has spent $150,000 (plus $50,000 of state money) on a planning study for a new indoor arena in Germantown. And the county’s Department of Economic Development is requesting $125,000 more! Put aside the merits of the arena (which my union members would no doubt love to build); does planning for an entertainment facility really take precedence over evaluating the impact of a giant hospital relocation? Apparently some believe it does!

So enjoy watching the Maryland Nighthawks play minor league basketball in the new arena! Just don’t choke on that hot dog. The ambulance may not know where to take you.

Friday, April 25, 2008

Millionaires Offered Discount to Move to Virginia

Dear readers, I promise that this is not one of my much-ridiculed spoof posts. Everything that you are about to read is 100% true.

MPW friend and occasional spoof victim Dana Beyer forwarded us an online ad posted by a Virginia real estate agent enticing MoCo millionaires to move. The ad says:

April 09, 2008

Virginia Welcomes Migration of Maryland Millionaires

New Millionaire Tax in Maryland May Cause some to Migrate to Virginia

It's mid-April. Are taxes on your mind?

If you're wealthy and live in Maryland, say hello to the first in the nation, Millionaire's Tax. Signed into law yesterday by Governor Martin O'Malley, the legislation created a new tax bracket for those who earn over $1 million per year. Approximately 6,000 Maryland households fall into this new tax bracket and are subject to a 6.25% tax rate.

According to The Baltimore Sun newspaper, more than 40 percent of these wealthy households are in Montgomery County. While Montgomery County is a great place to live and Maryland is a great state, many of those being hit with this new tax may decide to vote with their feet.

Let me be the first to WELCOME YOU TO VIRGINIA.

As you know, Virginia is just across the Potomac River from Maryland. Northern Virginia offers wonderful amenities, parks, schools, history, culture, and an easy commute to D.C. Homes in the upper brackets are plentiful throughout the area, especially in popular communities like McLean, Great Falls, Arlington, Alexandria, Fairfax Station, and more. Another bonus of moving to Virginia -- how about in-state tuition at some of the best public colleges and universities in the country, including University of Virginia, James Madison University, and George Mason University.

Virginia has consistently ranked as the Best State for Business by Forbes Magazine year after year.

Best of all -- Virginia does not have a Millionaire's Tax. (Virginia's highest income tax bracket is 5.75%).

Maybe it's time to contact your Maryland Realtor (I can offer some great suggestions) about selling your Maryland home and moving to Virginia.

I'd be happy to help you find a Northern Virginia home and welcome you to our side of the river.
So I emailed this agent the following inquiry:

Brian, I am disturbed about Maryland's new millionaire tax and am considering moving to Virginia. I have a few friends who are thinking along the same lines. If we all decided to move together, could we work out a discount? - Adam Pagnucco, Silver Spring, Maryland.
The agent replied:

Thanks for your e-mail. I certainly understand being disturbed by the Millionaire Tax in Maryland. We can certainly talk about a discount if you and several others decided to work with me to purchase homes in Virginia.
So what are you waiting for, country club members? I actually got a discount for you to move out. Does this mean we get to build the Purple Line now?

Unmasked: the MCDCC Member Who Voted for Jennings Over Edwards

Relying on our extensive spy network inside the Montgomery County Democratic Central Committee (MCDCC), we have uncovered the identity of the MCDCC member who voted to send Jason Jennings and not Donna Edwards to Congress. But first some background.

Back in February, Donna Edwards defeated incumbent 4th District Congressman Al Wynn in the Democratic primary. Shortly afterwards, Wynn announced he was resigning early to accept a lobbying job. The Governor declared that there would be a special general election held on June 17th to determine who would fill the rest of Wynn’s term. There would be no special primary; instead, the party central committees in both Montgomery and Prince George’s Counties would nominate a candidate to stand in the special general election. If the two central committees failed to agree, the state central committee would make the choice.

Donna Edwards, who steamrolled the eight-term incumbent, was widely expected to be MCDCC’s choice. But Jason Jennings, another Democratic challenger who lost badly to Edwards in the primary, submitted his resume to the committee as an alternative. MCDCC voted to nominate Edwards by a margin of 22 to 1. But it’s the one vote in favor of Jennings that has really made tongues wag. “Who was it?” cried out the county’s political junkies.

We gave the top-secret mission to our hardened spy corps inside MCDCC. These are the people who scale the castle walls, pick the locks, steal the bon bons and penetrate the hidden vaults of the Baroness. After numerous brushes with guards, attack dogs and angry peasants from Georgia Avenue, our spies brought back the name of the Jennings voter: Vilma P. White.

Ms. White is a Silver Spring resident who lives in Congressional District 8. She was elected as part of MCDCC’s at-large slate in 2006. The slate had no opposition apart from eternal school board candidate and MPW favorite Tommy Le. We emailed Ms. White asking for comment and she has not responded.

Let’s keep in mind the scope of Edwards’ election victory over Jennings. In the Congressional District 4 primary, Edwards finished first in the district with 78,008 votes. Jennings tied for fourth of seven candidates with 1,429 votes. In Montgomery County, the jurisdiction represented by Ms. White, Edwards received 28,781 votes compared to Jennings’ total of 609. And yet Ms. White, who does not live in Congressional District 4, was convinced that Jennings deserved to be the Democratic nominee despite the overwhelming disagreement of her constituents.

[Sigh…] I guess this is our fault. We have been overly harsh with MCDCC over the last few months. Perhaps the pressure of fending off our constant troublemaking is getting to some of them. I had dismissed the rumor that MCDCC Vice Chairman Alan Banov was seen walking down the center of Connecticut Avenue in full scuba gear, but maybe that was true after all.

So perhaps MCDCC should be given a break. We at MPW are going to start a holiday fund for them so that they can take a well-deserved vacation at Wheaton’s beautiful Brookside Gardens. In the meantime, we will recruit Kevin Gillogly, Robin Ficker, Itchy and Scratchy and Muffitt to hold down the fort.

We can only hope that none of them would vote for Jason Jennings!

Thursday, April 24, 2008

Governor to MoCo: Build Your Own Schools! (Updated)

The Post is reporting that the O’Malley administration plans to allocate $46.3 million in school construction aid to Montgomery County, less than the $55 million he promised in last year’s special session. The amount of money in dispute is small. But the symbolic value of the Governor’s action is huge.

Simply put, the Governor needs Montgomery County. He needs our tax revenues. He needs our 32 votes in the legislature. He needs our votes and campaign contributions at election time. Without any of the above, his administration will fail.

But the county is not in terrible need of the Governor. No one remembers the last time the state had a governor from Montgomery County. (If you know, report it in the comments!) In administration after administration, Montgomery has received far, far less in tax dollars from the state than it has contributed. That has remained the case under Governors Ehrlich (who came from the Baltimore suburbs), Glendening (from Prince George’s), Schaefer (Baltimore City), Hughes (Eastern Shore), Mandel (Baltimore City) and possibly every other governor in the 20th Century. We would fare just as badly under another non-MoCo Democratic governor as we are under O’Malley – in truth, it would make little difference.

Our state legislators delivered tough, agonizing votes on taxes and slots in the special session for the good of the state, the good of the party and the good of Governor O’Malley. Many of them were pilloried for the tax hikes and the slots votes. Many of them are still getting hammered, one way or the other, about the millionaire tax. And as payment we are left to haggle over pennies.

For those who do not know us, we are a diverse lot in Montgomery County. Our ranks include entrepreneurs, tree huggers, union members, government employees, immigrants, the working poor and many, many more. But every single one of us agrees on one thing: WE DEMAND TO BE TREATED FAIRLY BY OUR STATE.

Governor, if you want an all-out torch-burning, pitchfork-waving revolt in this county, you are well on your way to getting one.

The Gazette is now carrying the story as well. When reading the two articles, it's important to keep in mind the sources of quotes from Montgomery County officials. County Executive Ike Leggett, County Council President Mike Knapp, Senators Rona Kramer, Rich Madaleno and Nancy King, Delegate Brian Feldman and MCPS Superintendent Jerry Weast's Chief of Staff do not universally agree on many things, but they are all frustrated with the Governor. While few would dare say it in the way I did, I will bet that the vast majority of Montgomery County's politicians are saying privately what I said publicly.

MoCo State Legislators on the Millionaire Tax

Preserved for eternity, here are the published comments and the votes by state legislators from Montgomery County (as well as remarks by the County Executive and County Council President) on whether a surcharge for millionaires should replace the computer services tax. Whether you agree with David Lublin or with me, the millionaire tax emerged as a major philosophical dividing line in the county delegation.

Delegate Charles Barkley (D-39), who voted against the millionaire tax, from the Post:

"You can only hit a cash cow so many times before they say, 'We're going to take our milk somewhere else,'" said Del. Charles E. Barkley (D-Montgomery).
Delegate Kumar Barve, the House Majority Leader (D-17), who voted for the millionaire tax, from the Post:

House Majority Leader Kumar P. Barve (D-Montgomery) defended the repeal bill, modeled on an O'Malley plan, as "a balanced compromise" that would eliminate the computer services tax before it is scheduled to take effect July 1.

"You will be preserving the place of Maryland in the high-tech sweepstakes," Barve said. "I urge you to kill this thing, right here, right now."
Delegate Brian Feldman (D-15), who voted against the millionaire tax, from the Sun:

"A majority of the Montgomery County delegation have a lot of concerns," said Feldman, who said he hopes lawmakers will consider making deeper cuts in O'Malley's spending programs before raising taxes.

"Maybe this isn't the time for new initiatives," he said.
Senator Jennie Forehand (D-17), who voted for the millionaire tax, from the Gazette:

But repealing the tax is a no-brainer to prevent computer firms from leaving the state, said Sen. Jennie M. Forehand (D-Dist. 17) of Rockville.

"Some of the things we passed in November has a negative impact in the counties and put them in a negative situation," she said. "Unlike the millionaires who are well-grounded and are making their money in the state, they won’t leave. But tech companies who would have been affected by this tax could easily have uprooted their businesses and moved."
Delegate Bill Frick (D-16), who voted against the millionaire tax, from Maryland Moment:

Del. C. William Frick (D-Montgomery), a member of the Ways and Means Committee, said he is "disinclined to change the income tax brackets."

"We worked hard on them and reached what we think is an appropriate compromise in the special session," Frick said.
Senator Brian Frosh (D-16), who voted for the millionaire tax, from the Post:

Sen. Brian E. Frosh (D-Montgomery) said he thinks lawmakers should step back and consider whether raising the tax rate is good public policy, irrespective of the consequences for his county.

"I understand that people say it would hit Montgomery County harder than some other jurisdictions, but we don't get taxed by jurisdiction," Frosh said. "I don't perceive it as a geographic issue."
Delegate Hank Heller (D-19), who voted for the millionaire tax, from the Gazette:

"I don’t think we have to apologize" for fighting higher taxes, said Del. Henry B. Heller (D-Dist. 19) of Leisure World. "Montgomery County, instead of [being] a major decision-maker ... will end up either being the obstructionists or having to go along with it."

The so-called "millionaires tax" will cause Montgomery residents to move across the Potomac River to Northern Virginia, weakening the economy, Heller said.
Delegate Tom Hucker (D-20), who voted for the millionaire tax, from the Post:

"I have to represent all my constituents, not just the millionaires," said Del. Tom Hucker (D-Montgomery). "I think those folks can afford to pay more state income taxes, especially in the wake of enormous federal income tax cuts that they have benefited from for the last six years."
Senator Nancy King (D-39), who voted for the millionaire tax, from the Sun:

…Montgomery County Democratic Sen. Nancy J. King, said she would reluctantly opt for an income tax increase, "If I had to."
Montgomery County Council President Mike Knapp from the Gazette:

The tech tax repeal will burden Montgomery County residents unfairly, said County Council President Michael J. Knapp (D-Dist. 2) of Germantown.

Of the state’s 6,150 millionaires, 41 percent live in Montgomery County; Baltimore County has the next highest number.

"Montgomery County is solving a statewide problem — again," Knapp told reporters in Rockville on Monday.
Senator Rona Kramer (D-14), who voted against the millionaire tax, from Maryland Moment:

Sen. Rona E. Kramer (D-Montgomery), who chairs the county's Senate delegation, said she wants the computer services tax repealed, but would prefer cuts in transportation spending than changes in the income tax structure.

"Montgomery County already does the yeoman's share of supporting the state budget," she said. "It's absolutely inappropriate for one jurisdiction, Montgomery County, to pick up the tab for 50 percent of one tax."
And from the Sun:

"I would not support it," Sen. Rona Kramer, a Montgomery County Democrat on the budget committee, said yesterday.

O'Malley's proposal is a political mistake, she said.

"He's coming to the one jurisdiction where he's still popular and saying: 'We're going to make you compromise again,'" Kramer said. "It's going to make him look terrible."
Montgomery County Executive Ike Leggett from the Post:

Leggett said he favors a repeal, partly because the planned tax significantly affects the thriving technology industry in the Washington suburbs. Leggett said, however, that he opposes raising the top personal income tax rate because a large number of wealthy Marylanders live in Montgomery and that he is wary of cuts to transportation funding.

"I want to be supportive of resolving this, certainly as it relates to this computer tax, but Montgomery County cannot be the sole source of solving a statewide problem," he said.
Senator Richard Madaleno (D-18), who voted against the millionaire tax, from the Post:

Sen. Richard S. Madaleno Jr. (D-Montgomery) acknowledged that the number of those who would be affected by the millionaires’ tax is small. "But this is a class of people who generate a lot of tax revenue for Maryland and Montgomery County," Madaleno said. "To create a disincentive for them to stay would be damaging to the rest of us."
And again from the Post:

"Opponents of this tax are not going to characterize it as a millionaires tax," said Sen. Richard S. Madaleno Jr. (D-Montgomery), a member of the budget committee. "It's going to be just another tax increase. . . . This is just more fodder for conservative talk radio."

Madaleno echoed arguments by other Montgomery officials, who have suggested that a higher income tax rate could prompt people who are creating jobs in the county to move. He suggested making cuts in transportation funding to repeal the tech tax.

Madaleno also questioned the political consequences in his county of the governor's support for the millionaires tax.

"I think it could be damaging to O'Malley in the part of the state where he probably remains the strongest," Madaleno said.
Madaleno posted an essay on this topic and others on Free State Politics.

Delegate Craig Rice (D-15), who voted against the millionaire tax, from the Sun:

"This is another ill-fated Senate move," said Rice of the Senate bill, which he criticized for not replacing the computer tax with a long-term revenue source. "We need to move forward with taxing other services."

By an 8-12 vote, [House Ways and Means] committee members also rejected a proposal from Rice that would have cut $150 million from transportation projects but eliminated the tax on millionaires.
And from the Gazette:

"I think Montgomery County has work to do," said Rice (D-Dist. 15) of Germantown. "I think as a delegation, we have got to do a better job at standing together on these things. We should not be balancing tax policy on one class of people."
Delegate Luiz Simmons (D-17), who voted against the millionaire tax, from Maryland Moment:

Del. Luiz R.S. Simmons (D-Montgomery) said he is frustrated to see his county become the "last refuge of unimaginative people" during budget crises.

"The tax is always imposed on us," Simmons said, adding that he thinks state leaders perceive Montgomery as a land of wealthy suburbs that is immune to the social ills that require government spending. But he said much of the county is middle-class and struggling during the economic downturn.

"I'm not trying to give you gobbledygook, but if you take a cumulative effect of these tax increases, what you will get is a migration of people out of the county," Simmons said.

"It has nothing to do with defending the millionaires," he added. "I'm not a millionaire. I'm just concerned about us taking hits on many different fronts and the confluence of those is going to hobble our economy."
Delegate Herman Taylor (D-14), who voted for the millionaire tax, from the Gazette:

"You’re exchanging one for the other," Del. Herman L. Taylor Jr. (D-Dist. 14) of Ashton said of the new income tax bracket. "I don’t know if that’s a good compromise. Just like the computer tax, we’re going to have to wait and see. Instead of hitting millionaires’ businesses, we hit millionaires directly."
Delegate Jeff Waldstreicher (D-18), who voted against the millionaire tax, from the Gazette:

"The question is how do we replace those revenues in a way that is true to our progressive values and fair to Montgomery County," said Del. Jeffrey D. Waldstreicher (D-Dist. 18) of Kensington.
And here is Senate President Mike Miller’s assessment from the Sun:

Senate President Thomas V. Mike Miller said lawmakers from Montgomery County held the key to breaking the deadlock, noting that they were the most adamant opponents of both the "tech tax" and the proposed levy on those earning more than $1 million annually. He said the county also receives the most in state transportation funding, leaving its representatives reluctant to redirect that money.

The county "is in the eye of the storm," he said.
That it is, Mr. Miller. That it is.

The final vote tally among Montgomery County’s state legislators is:

For replacing the computer tax with a surcharge on people making $1 million a year or more:

Senator Brian Frosh (D-16)
Senator Rob Garagiola (D-15)
Senator Nancy King (D-39)
Senator Mike Lenett (D-19)
Senator Jamie Raskin (D-20)
Delegate Saqib Ali (D-39)
Delegate Kumar Barve (D-17)
Delegate Bill Bronrott (D-16)
Delegate James Gilchrist (D-17)
Delegate Hank Heller (D-19)
Delegate Sheila Hixson (D-20)
Delegate Tom Hucker (D-20)
Delegate Anne Kaiser (D-14)
Delegate Susan Lee (D-16)
Delegate Roger Manno (D-19)
Delegate Heather Mizeur (D-20)
Delegate Karen Montgomery (D-14)
Delegate Kirill Reznik (D-39)
Delegate Herman Taylor (D-14)

Against replacing the computer tax with a surcharge on people making $1 million a year or more:

Senator Rona Kramer (D-14)
Senator Rich Madaleno (D-18)
Delegate Charles Barkley (D-39)
Delegate Al Carr (D-18)
Delegate Kathleen Dumais (D-15)
Delegate Brian Feldman (D-15)
Delegate Bill Frick (D-16)
Delegate Ana Sol Gutierrez (D-18)
Delegate Ben Kramer (D-19)
Delegate Craig Rice (D-15)
Delegate Luiz Simmons (D-17)
Delegate Jeff Waldstreicher (D-18)

Wednesday, April 23, 2008

Valerie Ervin Issues "Call to Action" on Economic Justice

Montgomery County Council Member Valerie Ervin, who represents Silver Spring, Takoma Park, Wheaton and Kensington, wrote the following op-ed in the Gazette today. We reproduce it here for our readers.

The Gazette
Wednesday, April 23, 2008
Economic justice: A call to action
by Valerie Ervin

This month marks the 40th anniversary of the death of Dr. Martin Luther King Jr. He was assassinated while in Memphis supporting sanitation workers who were on strike to improve working conditions and low wages. For Dr. King economic inequality was an important tenet of the civil rights movement. This new focus was the convergence of racial and economic concerns and had the potential to change the course of the movement.

Forty years later many things have changed in Montgomery County, but much remains the same. In 1975, the county’s minority population was 8 percent. In 2005, census data shows the minority population had grown to 41 percent countywide and was 79 percent in some areas. However, a comprehensive discourse about race and poverty is absent.

In Montgomery County, one of the most affluent counties in Maryland, policy makers often ignore the plight of those who are struggling to make ends meet. I believe that a new conversation about poverty and race must take place.

County government officials explain that growth in the county was less than 1 percent last year. However, what does this mean for an average working family? Without a growing tax base, our roads will continue to experience gridlock and our schools will remain overcrowded. More than 5,000 public school employees must travel from as far away as West Virginia each day to teach our children.

Police officers and firefighters go to great lengths to serve our communities, yet many call other jurisdictions home. Commute times are getting longer because, for so many, the cost of living in Montgomery County is a dream that is out of reach. Montgomery County has the second highest foreclosure rate in Maryland, and we have yet to see the worst of this trend.

Each year our public school system must teach more children who arrive at our doors unable to speak English. Poverty is also an issue for our county’s children with nearly 25 percent of school children eligible for free and reduced meals.

So where do we go from here? I have traveled throughout the county and visited the homes of people who dream of simple achievements that many of us take for granted. Their voices are silent in our most critical public policy debates. What I have found is that there is a disconnect between what preoccupies policy makers and what truly troubles the majority of working people who are struggling to care for children, pay for housing and cover the ever increasing costs of utilities, fuel and groceries. The current economic downturn impacts working families disproportionately, but they are too busy trying to make a living to spend time lobbying lawmakers.

As a call to action, I propose a summit for state and local policymakers to begin a new debate — a conversation about how to achieve economic justice for all of our residents. We must focus on opportunities for the future, not artificial limitations imposed by the past.

Valerie Ervin, a Democrat from Silver Spring, represents District 5 on the Montgomery County Council.

A note from Adam Pagnucco.

Council Member Ervin is touching on a theme that was explored in the recent County Council District 4 special election. In the candidate debates in that short campaign, Nancy Navarro repeatedly mentioned the plight of the people "not in the room." In contrast, my blog-brother Kevin Gillogly offered this characterization of the election in a blog post comment: "That is this race in a nutshell: Growth and Land Use Policy. Everything else is smoke screen." The debate on growth policy, poverty, jobs and pay is heating up as this county teeters on the edge of a recession and Valerie Ervin is calling that question.

If another elected leader has a different view, we will carry it for our readers in the interest of encouraging open debate.

Budget Cutbacks at MPW

Recently, we have offered frequent coverage of budget problems at both the state and county levels to our readers. This week, the Gazette reported that MCGEO – the county government employees union – submitted a list of budget savings to the county including limits on toilet paper provided to inmates. In that spirit, we at MPW are announcing a package of budget cutbacks at this blog to deal with our own financial difficulties.

1. MPW owner David Lublin has called his union contract with myself, Kevin Gillogly and Paul Gordon “unsustainable.” Apparently our provisions on catch-up pay to the bloggers on Free State Politics are excessive. So David is cutting our cost-of-living increase to zero, which should save him a lot of money. In return, he is terminating his union-avoidance consultant.

2. We will be introducing a new comment fee for our readers. Anyone posting comments of praise for our opinions, writing skills or superior good looks will be exempted from the fee. Extra charges will be assessed on anyone making more than a million dollars per year, any developers, any members of MCDCC or PGCDCC and any politicians who voted to pass the much-hated blogger tax.

3. We will no longer be employing Itchy and Scratchy as security service providers to this blog. Our readers are aware that we have occasionally criticized certain officials inside the county government. So a couple months ago, we decided to hire a security service for fear of encountering active intimidation by county government employees. But now Itchy and Scratchy will have to return to the state fundraising circuit.

4. Our much-anticipated $65,000 bathroom project with a private shower is indefinitely postponed. The reason is simple: our readers access our content from remote locations. If you are not in our physical presence, what need do we have for hygiene?

5. The saddest casualty of our budget cuts may be David’s hairless chihuahua, Muffitt. He can no longer afford to feed caviar to Muffitt on a daily basis so her fine dining needs will now be covered by donations from the Columbia Country Club.

But fear not for Muffitt! We are sending her to work on Senate President Mike Miller’s staff and, in a couple years, she will leave to pursue her fortunes as a high-priced, Miller-connected lobbyist! Muffitt’s burgeoning career in Annapolis will no doubt pay the bills for MPW (as well as David’s mortgage)!

Tuesday, April 22, 2008

MPW Banned by Federal Agency

One of our long-time readers has reported that a federal agency, the reader's employer, has blocked Maryland Politics Watch blog. The reader has asked us not to publicly name the agency for fear of potential waterboarding.

When the reader attempted to access our site, the following message came up:

This site has been blocked by the security team because it is listed by the vendor of our Web-blocking software as having one or more of the following among its content:

Web Chat Service
Web-Based E-mail Service
Pornography / Sexual Content
Gambling or Games
Illegal Activity / Drugs / Hate Propaganda / Violence
RealAudio or RealVideo Services
Hmmm... pornography, sexual content, gambling, hate propaganda, violence... Now Mr. Gillogly, have you been posting and deleting things in the middle of the night for your degenerate friends?

Which post got MPW banned? Was it our account of Itchy and Scratchy's appearance at a recent fundraiser? Those two are definitely violent enough to get banned. Was it our lampoon of Mike Miller's blogger tax? The Senate President is certainly powerful, but maybe not powerful enough to control a federal agency's Internet security team. The same goes for County Executive Ike Leggett, who probably can't wait for people to stop discussing his new bathroom. Or perhaps the feds saw Dana Beyer's hell-raising escapades outside the Bethesda Giant and judged us to be a national security threat.

I can't shake the feeling that MCDCC had something to do with this. Any comment from Alan Banov or Marc Korman?

Marriage Equality is Inevitable

Marriage equality is inevitable. It is going to happen in Maryland and it will eventually happen across the country. The reason for that is not politics, nor religion, nor even the daily tactical decisions of civil rights organizations like Equality Maryland. It is because of two forces that are infinitely more primordial: personal relationships and mathematics.

Are you a straight person? If so, do you remember your first gay friend? If you met your first openly gay friend more than fifteen years ago, as I did, there was probably a bit of novelty to it. After all, no one else you knew was gay. But after awhile, you stopped thinking about that friend in that context. You treated him or her the same as you treated other friends. But there was always one difference: that gay friend could never have a relationship that was formally sanctioned by society. It did not matter how satisfying or constructive that relationship was – it could never be recognized as marriage.

And so if you have a gay friend that you really care about, gay marriage is not a gay issue. It’s about you, your friend and your relationship with that friend. Because if you oppose gay marriage, you would have to look that friend in the eye and tell him or her that their romances and dreams were inherently inferior to yours. And if you’re like me, you could never, ever do that. It’s just not possible to do it and retain your own humanity. So it was with me as I became pro-gay marriage soon after I met my first gay friend.

Now here’s where mathematics comes in. Suppose that 5% of the population in Maryland is gay. No one knows for sure, but let’s use that number for now. That would mean roughly 275,000 gay people now live in Maryland. More than fifteen years ago, gay relationships were still taboo for the most part. So at that time, perhaps 30,000-50,000 gay people were out. They had straight friends and family members who cared about them. Many of them accepted those gay people for what they were, and they accepted their relationships. Many of them adopted my view that marriage was their fundamental right. Suppose, again, that each of those gay people had ten friends and family members who came to believe in their right to marriage. That would add up to perhaps a sixth to a fifth of the state’s population.

Over the years, more and more gay people came out. And they made more and more friends. And many of them formed families. So the numbers grew and grew. Suppose 250,000 gay people are now living as openly gay in the state today. And suppose each of them has ten friends and family members that believe in their right to marry. That would equal 2.75 million believers in marriage equality in Maryland, close to half the population. But the process does not stop there. Friends of gay people talk to their friends, some of whom do not have close relationships with gays. And so they too become converted.

What we have been witnessing is a magical virus of humanity passing from person to person. This is happening right now, in our cafeterias, our offices, our sidewalks, our living rooms and even our churches. It cannot be stopped. It cannot be controlled. It cannot be defied or suppressed. And it is taking over our culture. Conservatives are fond of emphasizing the importance of our national culture. For once, I agree with them. Person by person, our culture is producing a groundswell for marriage equality.

In the short term, Maryland’s politicians have a choice. Like Attorney General Doug Gansler, they can embrace gay marriage. Or they can squirm uncomfortably in the murky netherworld of civil unions. Or they can spit into the wind as the gusts mount. But over the long term, marriage equality is coming. And there’s not a damn thing they can do about it.

Monday, April 21, 2008

Transportation in a Crunch

By Marc Korman.

A recent Gazette comic, reproduced below, sums up the recent action by the General Assembly when it comes to transportation. A big loser in this year’s session, and a potential loser in future years, is the state’s transportation funding.

Coverage of the General Assembly’s repeal of the 6% computer services sales tax mostly ignored the negative effect on transportation and instead focused on the new millionaire’s surcharge, really just a new tax bracket, that taxes earnings over $1 million at 6.25%. Far less attention was paid to the $50 million cut from the state’s Transportation Trust Fund for each of the next five years. Just a few months ago, the General Assembly and the Governor received much earned praise for adding $420 million in new annual revenue for transportation.

The opponents of the computer services tax repeal proposed even deeper cuts to transportation, with Senator Madaleno proposing a $150 million annual cut to the Transportation Trust Fund. In a posting to Free State Politics and republished here at MPW, Senator Madaleno justified his proposal by noting that it would still leave in place a $300 million increase from prior to the Special Session. Senator Madaleno also stated that the projects slated to be funded were not good uses of the state’s money. Given the state’s transportation needs, I find the argument a bit curious because the idea that the local transportation projects have no validity because they will only improve “traffic flow in the immediate vicinity of these intersections” begs the question of why they are being funded at all. If Senator Madaleno’s claims are true, and these projects are of such low priority and value, then perhaps our legislators need to convince the Department of Transportation to pick better projects instead of deciding to cut funds.

But the real point for all of those proposing transportation funding cuts of any size is that the needs are real and we need more funds, not less. Even if individual legislators do not support all of the projects on the list of needs, surely each individual Senator supports a majority of these and numerous others. Some of the needs are:

1. The Inter County Connector-$2.4 billion
2. The Purple Line-$105 million to $1.685 billion (depending on the method selected)
3. Corridor Cities Transitway-$850 million estimate
4. BRAC Enhancements in Bethesda-$70 million estimate
5. Georgia Avenue and Forest Glen Road Crossing - Cost unknown, but I put it in to avoid the wrath of MPW’s writers.

Instead of searching for ways to meet these needs, everyone is proposing cuts. If we are not going to raise the gas tax, the least we can do is stop raiding the Transportation Trust Fund. As I said, it was only a few months ago that we were praising the $420 million increase. It was just a year before that we were criticizing Bob Ehrlich for raiding the Transportation Trust Fund. In 2010, I do not want the Democrats to be accused of the same transportation policy failures.

A Note of Concurrence from Adam Pagnucco

Marc Korman's argument is even more powerful than he originally stated. The fact is that Maryland's Transportation Trust Fund (TTF) is already under assault.

First, the revenues devoted to the fund are endangered by the poor economy. The major sources for the TTF are gas taxes, motor vehicle titling taxes and fees (like registrations and licenses), operating revenues (like tolls) and a portion of corporate income tax receipts. All of these revenues will probably record shortfalls in the coming year.

Second, construction material prices are soaring. According to the Bureau of Labor Statistics, national wholesale prices have skyrocketed by 31% for ready-mixed concrete, 73% for gasoline and 78% for asphalt between 2004 and 2007. The situation is exacerbated by an ever-weakening U.S. dollar and rising commodity demand from India, China and other developing countries. These price increases threaten the financial solvency of some construction contractors and will stretch already scarce dollars at MDOT.

Of the $400+ million transportation increase approved by the General Assembly’s special session, $150 million was planned for new projects such as the ones listed above by Marc. The loss of $50 million from the computer tax repeal, the slowdown of TTF revenue sources and rising commodity prices will greatly reduce the amount of money left for new projects. As a matter of fact, if the state protects tens of millions of dollars in planning money for mass transit projects (like Baltimore’s Red Line and MoCo’s Purple Line and CCT), it is entirely possible that all other new work aside from the ICC will be deferred. That means that if the legislature attempts to raid the TTF – as Governor Ehrlich did repeatedly – there may be little left to plunder.

There is another possibility. The legislature could choose to defer system maintenance, which was supposed to receive an extra $250 million per year. The state prioritized system maintenance in the wake of the I-35 bridge collapse in Minnesota. If the state does cut maintenance and a major infrastructure failure occurs, the political consequences will be cataclysmic.

Friday, April 18, 2008

Council District 4 Special Election by the Numbers

Many political observers inside Montgomery County are discussing the meaning of Donald Praisner’s victory in the Council District 4 special election. Our contribution to that debate focuses on mathematics. From that perspective, Mr. Praisner won because of turnout and demographics.

In the district’s total polling place results, Mr. Praisner received 3,288 votes, 348 more than Nancy Navarro (2,940). Steve Kanstoroom finished third with 804 votes and Pat Ryan trailed with 402. Overall turnout was 11.2%. But real insight requires an educated read of the precinct counts.

Council District 4 has 45 precincts. Of that number, Mr. Praisner won 22, Navarro won 21, Praisner and Navarro tied in 1 and Steve Kanstoroom won 1. (We predicted Kanstoroom’s win in Precinct 13-11 a week ago. Keep reading this blog, people!)

The precincts won by Mr. Praisner reported a combined turnout of 12.9%. Navarro’s precincts reported a combined turnout of 9.1%. That difference of 3.8 points contributed to Mr. Praisner’s margin of 348 votes.

But there’s more. Mr. Praisner won all five precincts reporting the highest turnouts, including Precincts 13-54 and 13-69 in Leisure World. Of the eight precincts reporting the lowest turnouts, Navarro won seven and tied with Praisner in the eighth.

The two Leisure World precincts had combined turnout of 20.5%, 9.3 points ahead of the district total. They reported 476 votes for Mr. Praisner (47% of their total), 323 votes for Navarro (32%), 166 votes for Kanstoroom (16%) and 45 votes for Ryan (4%). Leisure World by itself gave Mr. Praisner 44% of his victory margin.

Turnout was correlated with demographics. District 4 has seven precincts in which the Hispanic population topped 20% in the 2000 Census. Navarro won all seven. These precincts cast 267 votes for Navarro (50% of their Democratic total) and 179 for Mr. Praisner (34%). However, their turnout was only 7.6% - a full 3.6 points below the district’s total turnout.

District 4 has eleven precincts in which the black population topped 30% in the 2000 Census. Navarro won seven of these and Mr. Praisner won four. These precincts cast 583 votes for Navarro (47% of their total) and 509 for Mr. Praisner (41%). Navarro’s victory here is notable since Mr. Praisner’s biggest endorsement came from County Executive Ike Leggett, Montgomery County’s most prominent African American resident. These precincts reported a turnout of 8.4% - 2.8 points below the district’s total turnout.

District 4 has fifteen precincts outside of Leisure World in which the white population was at least 60% in 2000. Mr. Praisner won eight of these, Navarro won six and they tied in one. These precincts cast 1,016 votes for Mr. Praisner (44% of their total) and 936 votes for Navarro (40%). Turnout was 10.9%, almost equal to the district’s total turnout (11.2%). In the end, these precincts plus Leisure World accounted for 233 votes of Mr. Praisner’s 348 vote lead, or two-thirds of his margin.

Mr. Praisner’s supporters are understandably pleased at his victory, but they have cause to worry about 2010. As Mr. Praisner has said many times, he will not be on the ballot again. His supporters and potential successors should consider the following relevant facts:

1. School board member Marilyn Praisner (in 1990) and American University professor Jamie Raskin (in 2006) both required year-long campaigns to knock off long-time incumbents. Nancy Navarro came close to defeating the 17-year-incumbent Praisner family in just six weeks. As someone who saw her operation up close, I was impressed by the discipline and tactical intelligence of her campaign. Now that Navarro has survived the fire of an occasionally acrimonious and difficult election, she should be an even more formidable candidate if she runs again.

2. Most voters knew who their candidate was when they arrived at the polls on Tuesday. This reduced the importance of MCEA’s Apple Ballot. This will not be the case in 2010.

3. District 4 is a majority non-white jurisdiction and is trending even further in that direction. Navarro’s strong performance in black and Latino precincts – even against the choice of a black County Executive – swims with the demographic tide of history. And if she chooses to run again in 2010, she will have much more time to get out the vote in those precincts.

Ironically, the best hope for Navarro’s opponents among non-white voters could be Pat Ryan. His work with Action in Montgomery has brought him into contact with many black, Latino and immigrant communities in the county. His hands-on advocacy for affordable housing is a good issue with these constituencies. But Ryan was discouraged from running by the establishment officials who backed Mr. Praisner. Starved for money and deprived of endorsements, Ryan garnered just 5% of the vote and finished last in 33 of the district’s 45 precincts. If Ryan or Steve Kanstoroom, who spent $24,000 of his own money only to draw 11% of the vote, is anointed to be Mr. Praisner’s successor, will either be able to overcome such a low finish?

The Problem with Peter Franchot

The war of words between Governor Martin O’Malley and Comptroller Peter Franchot escalated yesterday. The Governor branded the Comptroller as a hypocrite for crusading against slots after voting for them in 2001. The Comptroller’s spokesman then referred to the Governor’s “attack” as “unusual” and “regrettable.” But what is truly regrettable is the nature of the Comptroller’s engagement in the state’s political debates.

From the start, Peter Franchot said he was not going to be your grandfather’s sort of Comptroller. He was going to be an activist, independent spokesman for Maryland taxpayers. Boy, I thought, this was going to be great. After all, activist independent spokespeople provide great fodder for bloggers!

Soon enough, the Comptroller proved good on his word. He questioned the need to hold a special session last year. He opposed the computer tax as soon as it was suggested. Senate President Mike Miller criticized Franchot and his staff for being “missing in action this entire year in terms of helping the state solve the budget crisis. ... Certainly, during the entire [22] days of the special session he was gone.” Soon after, Franchot became embroiled in an ugly battle with the Senate over his staffing practices and conduct in office. And that’s to say nothing about his opinions on slots!

Now we try to follow a tradition of constructive criticism on this blog. After our rip-roaring romps against MCDCC last year over its legislative appointment process, Paul Gordon suggested holding mid-term special elections and using a variety of ways to incorporate district resident input into MCDCC votes. When I found the Governor’s original special session package to be regressive, I laid out how to seize tax revenues from cheating employers who were costing the state millions. And when I opposed the computer tax, I suggested a package containing the Governor’s original upper-income tax rates, combined reporting and a corporate tax hike as a replacement.

It is very, very easy to criticize someone else’s ideas. It can be very, very challenging to craft a viable alternative. Franchot’s problem is not that he is an anti-slots liberal or that he butts heads with the Senate President. (After all, someone has to fight with Miller!) It’s that he does not supply us with a better way to deal with our problems. What does a progressive alternative to the things he criticizes look like? I’d really like to know, but he never tells us.

And the slots issue is becoming an excruciatingly difficult one. The latest state budget information holds that if the slots referendum is not passed, the state will face $600 million annual budget deficits forever. Regular readers know that I’m not a fan of slots. But after the legislature’s regressive special session tax package, the most likely alternative to slots money will be more sales tax increases or horrendous budget cuts, possibly to education, health care and transportation. These are really tough choices and any honest person who cares about both preventing slots and pursuing progressive economic policy is going to wrestle with them.

So what is the Comptroller’s recommendation? According to the Post:

Asked by a reporter how he would replace the revenue if the referendum is defeated, Franchot offered no specifics. He said the state should be nurturing the life sciences sector, industries that would presumably contribute more to the tax base upon its growth.
I’m sorry, Mr. Franchot. If you are going to earn my loyalty, you have to do better than that.

Thursday, April 17, 2008

State Budget Crisis Will Get Worse Before it Gets Better

Courtesy of State Senator Rich Madaleno (D-18), we present a grim reality to MPW readers: the state budget situation is getting even worse.

Over the last two years, Maryland politics has been dominated by a debate over how to deal with the state’s “structural deficit.” This deficit is a long-term imbalance between revenues and spending created by income tax cuts in the 1990s and an expansion of education spending in 2002. The Ehrlich administration was able to defer the consequences of these decisions because of a strong economy and repeated diversions of transportation funds. But Governor O’Malley decided to deal with the problem head-on early in his term, leading to the deficit reduction package of last year’s special session.

The problem is the weak economy. Every time the legislature takes action to correct the deficit, the Maryland Board of Revenue Estimates reports revenue shortfalls. And so the legislature must redo its work. If the shortfalls are serious enough between General Assembly sessions, the Governor will probably have to make unilateral cuts until they return to Annapolis.

Senator Madaleno brought the latest 90 Day Report, a review prepared by the State Department of Legislative Services, to our attention. The report had this to say about future state budgets:

As shown in Exhibit A-1.6, although there is a cash balance of about $226.4 million in fiscal 2009, there is a gap of about $350 million when comparing ongoing revenue to ongoing spending. As noted, action at the 2007 special session reduced the projected $1.7 billion structural deficit by about $1.4 billion through a combination of new revenues and spending reductions. Reductions adopted at the 2008 session largely offset downward revenue revisions that were received in March 2008 but did not make additional progress in reducing the structural deficit. There is a potential cash shortfall of about $243 million between revenues and current services spending projected for fiscal 2010. The shortfall is expected to widen to nearly $600 million in fiscal 2011, which mirrors the structural deficit. This is due mainly to the downward revision of revenue by BRE [Board of Revenue Estimates] in March, to an actuarial error in retirement contributions which adds nearly $70 million per year in additional spending for teachers’ retirement costs, and in the financing of health care expansion, enacted by Chapter 7 of the 2007 special session, which adds $70 million in general fund spending in fiscal 2011.

Based on the assumption that the constitutional amendment to implement video lottery terminals is approved by voters in the fall of 2008, the projected cash and structural shortfall narrows significantly by fiscal 2013. It is estimated that revenue from video lottery terminals will add nearly $500 million in revenue in fiscal 2012, increasing to an estimated $660 million in fiscal 2013. If the constitutional amendment is not successful, the structural deficit is projected to remain at the roughly -$600 million level.
Exhibit A-1.6 is reproduced below.

These numbers are by no means necessarily the ones that will be used by the General Assembly in next year’s budget decisions. The revenue numbers in particular may be adjusted more than once by then. But in general, here’s how this might play out:

1. More tax hikes are very unlikely. The bulk of the problem will be dealt with on the spending side.

2. The spending increases passed in the special session, such as the establishment of a fund to clean up the Chesapeake Bay and a health care expansion, will be especially vulnerable. Legislators will say, “We thought we had the money for those things but it turns out we don’t. So we will have to wait until the money comes in before funding them.” College tuition freezes and transportation spending will also be endangered.

3. Both the special session and the 2008 general session largely spared the counties from cuts to state aid. That may not be the case next time. The counties are especially wary of any attempt by the state to pass on obligations for teachers’ pensions. Education aid may also be at risk. If aid cuts happen, they would greatly complicate county budget problems, especially in Montgomery County.

4. Slots proponents will be sure to exploit the new data, especially the 90 Day Report’s statement that “if the constitutional amendment is not successful, the structural deficit is projected to remain at the roughly -$600 million level.” Even anti-slots legislators will shudder at the prospect of replacing that amount of money, especially as election year approaches.

5. A $243 million deficit is projected for FY 2010, which will be decided next year. But a $596 million deficit is projected for FY 2011, which will be decided in 2010 – an election year. The General Assembly is surely tired of dealing with budget crises every year and will be tempted to take a break in 2009. But if they do that, the 2010 elections will be kicked off by a truly painful debate over even more tax hikes and/or spending cuts – a teeth-chattering prospect for every politician in Annapolis.

Wednesday, April 16, 2008

Montgomery College Agrees to Neutrality - Or Does It?

Regular readers will recall how Montgomery College told its adjunct professors that they were "not public employees" in order to avoid allowing them a union election. Now the college is claiming to be "neutral." But is it?

Two days ago, the President of Montgomery College sent out the following memo to adjunct professors:

Office of the President
April 14, 2008


To: Part-Time Faculty
From: Brian K. Johnson, President
Subject: Service Employees International Union for Part-Time Faculty

Many of you are aware of the petition filed by SEIU Local 500, seeking to represent adjunct faculty for purposes of collective bargaining. I wanted to clarify the College's position in this matter. We are not anti union, we are neutral, and will respect the right of adjunct faculty to decide through a secret ballot vote on whether you wish to be represented by the union. Throughout this process we must perform our organizational and legal duties. This includes making sure that the unit proposed is authorized by Maryland law to do so and to make sure that the definition of the unit to be organized is sufficiently clear and appropriate so that elections can be conducted in accordance with the requirements of law. These steps followed in accordance with the requirements of Maryland law result in benefits to all concerned and eliminate tremendous legal and logistical problems in the future.

We are working with the Maryland State Commissioner of Labor and SEIU Local 500 to seek an expedited election process that will allow you to vote on this question as soon as possible. Information regarding the election procedures will be forthcoming from the Commissioner's office in the very near future.

Montgomery College has a rich history of harmonious labor relations with our employee unions. We are committed to that tradition continuing with SEIU or any other union, should they become your collective bargaining representative.
It is encouraging to hear the college proclaim its "neutrality" though I have heard such statements from anti-union employers many times over the years. The true test of neutrality is not what the college says, but what the college does.

The adjuncts are seeking an election prior to the end of the semester, which occurs in mid-May. The college states that it "must perform our organizational and legal duties," which include "making sure that the unit proposed is authorized by Maryland law to do so and to make sure that the definition of the unit to be organized is sufficiently clear and appropriate so that elections can be conducted in accordance with the requirements of law." If the college contests the definition of the bargaining unit - a common tactic used against workers who want a union - it can easily run out the clock on the semester. That would give the college all summer to plan a more aggressive campaign against the adjuncts in the fall.

If the college is genuinely neutral, it must agree to an election in the next couple weeks. Otherwise, its declaration of neutrality will be proven as baseless as its claim that the adjuncts are not public employees.

Monday, April 14, 2008

More Wobbling on the Property Tax

While the great debate between David Lublin and myself over the property tax is now over, the great tumult over the issue on the County Council is just getting started.

The Gazette reveals that Council President Mike Knapp is now uncertain about his vote on the County Executive's property tax proposal. This follows votes against the tax in the Management and Fiscal Policy Committee by Council Members Duchy Trachtenberg and Phil Andrews and an abstention by Valerie Ervin. Council Member Nancy Floreen has also expressed doubts about the tax.

Because the District 4 council seat will not be filled until after the budget is decided, seven of the remaining eight Council Members must vote to break the charter limit to pass the property tax hike. So far, we count two votes against, two votes not committed and four votes with no expressed position. That's a bad sign for passage of the tax hike.

Do any of our readers know if it's possible for the County Council to turn down the property tax hike and not re-open the public employee contracts?

Foolio Demands a Union

A Navarro campaign worker who refers to himself only as “Foolio” is demanding union representation. Following is our exclusive interview.

Adam: Are you the same Foolio who has been posting comments on our blog?

Foolio: Yup, that’s me.

Adam: Why don’t you tell the readers your real name?

Foolio: I’d rather not, but Kevin Gillogly knows who I am. He’s still upset with me for not supporting him when he wanted to run for Council.

Adam: Foolio, why do you want a union?

Foolio: The working conditions here are awful. David Moon, Nancy’s campaign manager, is a tyrant. He keeps us chained up in Nancy’s basement. All we have to eat are little Hershey’s bars and Diet Cokes. He eats all the cheeseburgers himself. I want a cheeseburger!

Adam: Diet Cokes and Hershey’s? That’s all you get?

Foolio: There’s also a giant box of caffeine pills. It says, “Compliments of the Montgomery County Chamber of Commerce.”

Adam: What else is going on?

Foolio: The only time we get to leave the basement is when we canvass. Moon attaches ankle bracelets with GPS chips to all of us. If we wander off our canvass map, a pickup truck full of Carpenters Union members grabs us and brings us back to Nancy’s.

I think I’m getting carpal tunnel syndrome from all the door knocking. On top of that they now have me clicking away on this stupid Internet poll. But they won’t let me file for workers’ compensation because they’ve misclassified me as an independent contractor!

Adam: IPoCS (Internet Poll Clicking Syndrome) is a serious problem. Al Carr and Hugh Bailey are still recovering from it.

Foolio: Why is Moon so obsessed with these blogs? Everyone knows that no one reads them!

Adam: That’s true. I get emails from readers who say they don’t read our blog all the time.

Foolio: So we finally started calling unions to come organize us. But MCEA, SEIU Local 500 and MCGEO all said they weren’t interested.

Adam: Hmmm, that’s a mystery. I wonder why that is?

Foolio: Well, we’re forming our own union. Moon finally broke down and agreed to let us have a union election. It’s going to be on April 16th.

Adam: But Foolio, that’s the day after the primary. You’ll all be out of work by then.

Foolio: Dammit! I knew something was up with that. And I had to give Moon the last campaign cheeseburger to get him to give in!

Last Pre-Election County D4 Round-Up

By tomorrow night, this race will be over. Here’s the state of play one day out.

On press, coverage has picked up in the last week. The Post has written its last wrap-up article. Maryland Moment discusses a spat over an email sent by MCEA to its members. Dan Reed at Just Up the Pike has interviews up with almost every candidate. He will post an interview with Don Praisner tomorrow morning. Politicker Maryland has posted interviews with Praisner, Pat Ryan and Nancy Navarro’s campaign manager in the last few days.

On the ground, it appears that Navarro has sent out more literature than the other candidates combined. Some District 4 residents have reported receiving more than a half-dozen mailers from her over the last three weeks. Recently, Navarro lit has been showing up with “Endorsed by the Washington Post” stickers. The signs are more balanced among the Democrats; Praisner probably has a narrow lead with Navarro and Ryan close behind. Republican Mark Fennel may have more signs up than all the Democrats combined, with each accompanied by a “Robin Realty” sign. The three largest MoCo unions - MCEA, SEIU Local 500 and UFCW Local 1994 (MCGEO) - have several thousand members inside the district and are no doubt calling and emailing them on Navarro’s behalf. Don Praisner will be drawing on a list of everyone who has contributed to or supported Marilyn Praisner over the years and his campaign will be asking them to show up one last time for the family.

The great unknowable is who will arrive at the polls tomorrow. In the special election to fill the County Council District 5 seat in Prince George’s County, only 8% of the registered Democrats showed up. If turnout is less than that, Don Praisner will have the advantage. All sides concede that the Praisners have a devoted base inside the district who are sure to vote. But if turnout gets into the mid-teens, Navarro will close the gap.

So now the great call-out begins. Over the last several weeks, each of the candidates has been identifying their voters and earning their loyalties. Now they have to make sure that their people show up. That will determine the course of the election, the holder of the council seat and the political direction of Montgomery County for the next two years.

Sunday, April 13, 2008

More Than You Ever Wanted to Know About Maryland's New Foreclosure Law

Calculated Risk Blog has a long post on one of Maryland's new foreclosure laws. The post examines the law's effect on actual foreclosure timelines and finds that it brings Maryland closer to national averages.

The legislature's foreclosure package is perhaps the most positive achievement from a general session that focused mostly on budget-cutting and the now-deceased-and-unmourned computer tax. But it's worth reading exactly what the new foreclosure legislation will do. If you are a real estate lawyer, you're really going to love the analysis.

Thank you to Joe Davidson for passing this along.

Saturday, April 12, 2008

On Progressive Taxation and Property Taxes

David Lublin raised a number of good points on the property tax increase that deserve a response. Let’s take them in order.

(1) Lots of people have lived in homes for a long time that have appreciated substantially. Particularly for retirees on a fixed income, an increase of over $1000 (very easy to hit in SoMoCo) can be tough even if they live in a high-value home. Even if economic theory says they can borrow against their homes, people really hate that idea for understandable reasons. In any case, this market isn't the best one for realizing the profit.

David rightly points out that some people on fixed income could potentially receive a $1,000 property tax increase under County Executive Ike Leggett’s proposal. Under the formula in my previous post, a home receiving a county property tax increase of $1,000 would have a net assessment of $891,789 (and a much higher gross assessment and market value if the homestead credit applied). But the county provides residential property owners of at least 70 years in age a “senior property tax credit” of 25% of their combined state and county homestead credits. So a senior would be allowed to own an even more valuable home than a non-senior before being subject to a $1,000 property tax increase – perhaps even a home approaching $1 million in market value.

But no one will want to pay that amount of property tax increase. So suppose we relieve the tax increase on seniors with homes approaching a million dollars in market value. If there is to be a property tax increase at all, someone will have to pay more as a result – perhaps seniors occupying homes worth $300,000. But suppose we relieve them too from the extra taxes. Then the burden will fall on young families – a group with substantially less wealth than seniors and significantly less retirement security. Where should the burden fall?

Progressive taxation, a bedrock principle of progressive economic philosophy, holds that tax burdens should advance with income levels. Recent events suggest that principle may be out of fashion in Montgomery County.

(2) Focusing just on the millionaires tax is a mistake. Don't forget all those sales and income taxes raised during the special session. Also don't forget all those fees which were jacked up under Gov. Ehrlich. The voters won't. All things being equal, Americans like having more disposable income. If this is done to maintain services, it will need to be convincingly explained--not necessarily an easy sell though it can be done.

I am not about to forget the tax package from the special session. Because it relied primarily on sales taxes, it was regressive. To quote once again the analysis by the Maryland Budget and Policy Institute:

The poorest 1/5 of taxpayers will pay nearly 0.8% more of their income in taxes. The middle 1/5 will pay half that percentage: just over 0.4%. The wealthiest 1/5 will pay between 0.3% and 0.5% of their incomes in increased taxes. This overall regressive distribution occurs because the regressive nature of the sales tax increase overwhelms the progressive features of the income tax changes.
The County Executive’s property tax proposal is progressive and may, in conjunction with the new state millionaire tax, flatten the tax burden. These two progressive tax proposals, which together total $238 million, have attracted immense opposition from a substantial portion of Montgomery’s political leadership. But the $700+ million regressive state sales tax hike passed without a whimper. That is a chilling but instructive development in this county’s political environment.

In any case, I agree that any tax hike, no matter its character, must be explained to voters. The public employee unions are not in the best position to do this since most people will perceive their defense of public services as a defense of their memberships, which is of course their role. It is the responsibility of the politicians to explain why county services are worthy of a tax increase if that is what they believe. That is especially true of politicians who were eager to accept the support and aid of labor during the last election campaign. For the most part, that defense has yet to begin.

(3) The debate has been cast as an either/or debate with no middle ground. Either taxes go up a great deal or services are cut substantially. Like all money issues, this one can be negotiated to all sorts of points inbetween. Both sides know this but are posturing right now is my guess.

I suspect the County Council will have to settle somewhere in the middle. Such is the way of legislative bodies. But the decision to surpass the charter limit truly is an either/or decision. If the council rejects the County Executive’s tax proposal, they will have to cut the budget by a further $128 million.

There is another option. As Delegate Al Carr pointed out in a comment on an earlier post, the County Council is considering increasing taxes on electricity and natural gas. This is a far more regressive option than the County Executive’s property tax hike and it does not need a super-majority to pass. The shade of Annapolis may be descending on Rockville.

(4) The recession may just be starting with next year's budget looking even more grim. As at the state level, the chances of getting both budget cuts and tax increases over the course of several years are starting to look pretty good.

A recession is a distinct possibility as we recently reported. People on the lowest rung of the income ladder, not those earning one million dollars a year, are on the leading edge of the downturn. The residents at the bottom will be sure to bear the brunt of any spending cuts. They should not also bear the brunt of the tax increases. Under the County Executive’s property tax proposal, many working-class people are indeed spared further tax hikes after their setbacks in the last special session. They will not be spared the lash of a home fuel tax hike.

I completely agree with David's judgement that the tax and budgetary choices are going to get tougher at both the state and county levels, not easier, in coming years.

None of this has any bearing on some key questions other have raised: (1) does labor deserve the pay increases, (2) does MoCo need to pay them to maintain quality services, and (3) can MoCo afford the pay increases. The first is a morality, not a market, question. The second is largely market driven. The third is driven by the tax base, economic needs, and taxpayer willingness to pay. I haven't thought much about any of these questions so I won't weigh in just yet.

On point (1):

Speaking as someone who has been involved in several union organizing campaigns, the notion of what a worker “deserves” is a very explosive question. Many public employees are starting to believe that their leaders think they are paid too much. This argument has been stated, or at least hinted at, by more than one of the Democratic candidates in the District 4 County Council race. Economic arguments can be conducted rationally but the question of what a worker “deserves” is a question for the heart. Right now, hearts are pounding inside the public sector workforce.

On point (2):

In a recent survey of county employee compensation, we learned that Montgomery faces potential problems competing for labor in the region. Fair-to-middling (at best) pay levels, a lack of defined benefit pensions and high housing costs may deter top talent from coming here in the future. The existing workforce, originally recruited in times when the county’s housing stock was more affordable, is still known for its excellence. But the entry level talent will gradually erode unless the county keeps up with its neighbors.

On point (3):

In 2006, Montgomery County reported the 8th-highest median household income of all 3,077 counties in the United States. The County Executive’s proposal taxes the median assessed household an extra 38 cents per day. Readers can form their own opinions on whether we can afford that.

But there is a much larger argument here: where does the county’s economic competitiveness come from? Montgomery is perceived to be one of the higher-cost jurisdictions for residents and businesses in the region. So why are people willing to pay those costs? One reason is the excellent reputation of the schools and public services. As a former resident of the District of Columbia and a rural area in upstate New York, I have a meaningful standard of comparison for the county’s service quality.

But Montgomery’s true competitors are jurisdictions like Fairfax – counties that also have good schools and abundant resources. We are never going to compete with Virginia by matching them on tax rates. Instead, we will have to equal or surpass them in our quality of education, planning, parks, police and other public services. Those services comprise a valuable, productive asset that preserves our standard of living, maintains our property values and protects our economic edge. The money we spend on the public sector is an investment, not money thrown down a black hole. Any investment has to be evaluated not merely on its cost but also on the return it generates for its holders. Why are we hearing so much about the cost but so little about the return?

Friday, April 11, 2008

How to Calculate Your Property Tax Increase (Updated)

Much is being made of County Executive Ike Leggett’s proposal for a property tax increase. Here’s how to calculate what it means for you.

Leggett’s property tax proposal has two components. First, he is increasing the property tax rate. Second, he is also increasing the property tax credit that homeowners receive for their primary residences from $613 to $1,014. The combination of the rate increase and the tax credit increase skews the resulting tax hike towards homes that are worth more money.

So here’s how to determine how much more taxes you would pay under his proposal. First, look up the gross assessed value of your property on the county’s property tax account website. (This will be the assessment listed on the county property tax line at the top of the bill.) Second, if your home is your personal residence and you have lived in it for more than a year, you will likely have a county homestead credit. This credit is designed to prevent your net, or taxable assessment from increasing by more than 10% per year. Find your county homestead credit, which will appear in the middle of your bill if you have one, and subtract it from your gross assessment. This is your net assessment. Third, multiply the net assessment by 10% to estimate its value as of 7/1/08. (This assumes that your net assessment is still “catching up” to where it would be without the restraint of the homestead credit. The homestead credit, after all, restrains but does not eliminate taxable assessment increases.) Fourth, multiply your 2008 net assessment by 0.008208 and then subtract $613. This would be your county property tax levy without Leggett’s proposal. (It does not include state taxes, solid waste or water charges.) Fifth, repeat the above exercise by multiplying your 2008 net assessed value by 0.009779 and subtracting $1,014. This would be your county property tax levy under Leggett’s proposal. The difference is your county property tax increase if Leggett’s proposal was passed by the County Council.

The County Executive states that the median assessment for a Montgomery County home is currently $343,200. Under the math above, that home’s county property tax would rise from $2,204 to $2,342, or 6.3%. That's an increase of 38 cents per day. A home assessed at $220,000 would see a tax bill cut from $1,193 to $1,137, or 4.7%. A million-dollar house would see a tax bill increase from $7,595 to $8,765, or 15.4%. (That’s a good size hit on top of the recently-passed state millionaire tax.) The break-even point is $255,331 in net assessed value (after any homestead credit). Homes worth more than this would see a tax hike while homes worth less would see a tax cut.

I performed this math on my own house in Silver Spring. If I had no homestead credit, my home’s assessed value on 7/1/08 would be $463,953. If Leggett’s proposal were passed, my county property tax bill would rise from $3,195 to $3,523 – an increase of $328. That works out to 90 cents per day. But with a homestead credit, my home’s assessed value on 7/1/08 will be $328,544. So my county property tax bill would rise from $2,084 to $2,199 – an increase of $115. Now that’s 32 cents per day.

Try the above formula for your own home. We all have different economic circumstances. Some of you will conclude that your potential property tax increase is unaffordable for your personal budget. If that’s your opinion, you should certainly contact the County Council. But I am ready to pay 32 cents per day - or even 90 cents per day - if it means maintaining quality public services in the county.

Update: In a work session of the County Council's Management and Fiscal Policy Committee yesterday, Chairwoman Duchy Trachtenberg and Council Member Phil Andrews voted against the property tax increase. Because of the District 4 vacancy, two opposing votes are sufficient to kill the property tax hike. If both council members stick to their votes, the County Council will have to locate $128 million in cuts to replace the tax.

Update 2:
In a comment on this post, District 18 Delegate Al Carr points out that the County Council is considering increasing fuel and energy taxes. In the staff memo he linked, Senior Legislative Attorney Mike Faden writes, "A resolution to increase fuel/energy tax rates, sponsored by the Council President, is scheduled to be introduced on April 15, 2008. This resolution would increase the rates currently in effect to produce $11.1 million more revenue. This resolution is introduced as a placeholder to allow the Council, if necessary, to adjust the rates of the fuel/energy tax."

This is big news and we are grateful to Delegate Carr for supplying it. Few household costs have been increasing more noticeably than electricity and natural gas. And a straight tax hike on fuel will ensnare many households at the bottom end of the income distribution that would escape the County Executive's property tax proposal. There may be at least as much resistance to increasing fuel taxes as there is to increasing property taxes. And if the property tax hike fails, then fuel taxes may be increased more as a result. Fuel tax increases are not subject to the charter limit and may be passed by a straight majority vote of the County Council. This is a very meaningful development and I hope the Gazette and Washington Post reporters who read this blog will follow up.

Thanks to Louis Wilen and Al Carr for correcting my earlier failure to account for the homestead credit. When readers correct and improve my content, I will credit them publicly.