How to Get Clout in Annapolis, Part Four

In Part Three, we recommended that Montgomery County’s state legislators do three things together to begin building clout in Annapolis: get organized, control the county’s campaign funding and limit new legislation. Today we finish the plan.

4. Jam the Committees

Most of the action in the state legislature happens in the committees. Prodded and spurred by leadership, the committee chairmen try to steer the Governor’s and the leaders’ priorities through their committees along with those of individual legislators and important groups. Most bills never make it out of committees. Montgomery’s legislators only chair one committee in each chamber, far less than the delegations from Baltimore City and Prince George’s County. But because of sheer numbers, Montgomery’s legislators have the most Democratic members of many of these committees. And through that membership comes power.

When the committee chair and the leaders begin polling committee members for their support on the leadership's priority bills, Montgomery’s legislators should not say yes or no. Instead, they should say something like, “I’m studying it.” “I’m talking to my colleagues about it.” “I’m undecided.” The Republicans can be counted on to oppose anything desired by the Governor or the Democratic leadership, so hesitation on the part of Montgomery’s legislators will throw the fate of more than a few bills into doubt.

This will make some of these committees very difficult for their chairs to manage. Consider the all-important Senate Budget and Taxation Committee. It has 15 members, of whom three are from Montgomery and four are Republicans. If all the Montgomery members and all the Republicans did not support a measure, Chairman Ulysses Currie would have a remaining margin of just one vote. That is awfully tight.

Consider the House Judiciary Committee. It has 22 members, of whom five are from Montgomery and six are Republicans. If all of the Montgomery and Republican delegates did not support a bill, it could not pass through the committee.

Here’s how the ten standing committees of the two chambers break down:

Senate Budget and Taxation: 15 members, 3 from Montgomery, 4 Republicans. Remaining margin: 1 vote.
Senate Education, Health and Environmental Affairs: 9 members, 1 from Montgomery, 3 Republicans. Remaining margin: 1 vote.
Senate Finance: 11 members, 1 from Montgomery, 3 Republicans. Remaining margin: 3 votes.
Senate Judicial Proceedings: 11 members, 3 from Montgomery (including the Chair), 4 Republicans. Remaining margin: Negative 3 votes.

House Appropriations: 26 members, 4 from Montgomery, 6 Republicans. Remaining margin: 6 votes.
House Economic Matters: 23 members, 3 from Montgomery, 6 Republicans. Remaining margin: 5 votes.
House Environmental Matters: 23 members, 3 from Montgomery, 6 Republicans. Remaining margin: 5 votes.
House Health and Government Operations: 24 members, 3 from Montgomery, 7 Republicans. Remaining margin: 2 votes.
House Judiciary: 22 members, 5 from Montgomery, 6 Republicans. Remaining margin: Zero votes.
House Ways and Means: 21 members, 6 from Montgomery (including the Chair), 5 Republicans. Remaining margin: Negative 1 vote.

By sticking together, the Montgomery delegation can make many of these committees difficult (or even impossible) to control. This is a gigantic opportunity for leverage over the leadership that can only be exploited through cooperation and discipline.

5. String it Out Until the End

Everyone knows that little happens in Annapolis until the last two weeks of the general session. Consider the order of battle if the prior four steps are followed. Montgomery’s legislators have agreed on a common program to protect their county. A few rogues have strayed, been chastised, and been brought back into compliance. Prior to the session, many political contributors in the county have mysteriously slowed down their rate of giving to anti-Montgomery politicians. Montgomery’s legislators have introduced an unusually low number of bills. Few of the Governor’s and the leadership’s priorities have moved out of the committees because of a lack of support from the Montgomery delegation. And now the end of the session is approaching.

Suddenly, Big Daddy and the Governor will be ready to deal. What is Montgomery’s price? At this point, the concessions demanded by the newly-empowered Montgomery delegation could be significant: no transfer of teacher pensions, more education money, more transportation money. And they will get most of it if they stick to our plan because the Governor and the leaders will have no other choice.

Organization defeats disorganization, willpower defeats weakness and leadership defeats fecklessness. Every single time. So what are you waiting for, Montgomery legislators? It's time to take charge in Annapolis!

How to Get Clout in Annapolis, Part Three

In Part Two, we heard from a Montgomery County budget official that a possible state shifting of teacher pension funding down to the counties would result in a fiscal “nuclear explosion.” Montgomery’s statehouse delegation successfully resisted that fate in 2008, but it may happen next year. If not, Governor O’Malley, Senate President Mike Miller and the other statehouse leaders will find some other way to extract money from “the state’s piggy bank.” It is time for our state legislators to fight back. They can do it successfully if they implement the following five steps:

1. Get Organized

When Senator Rona Kramer (D-14) revolted against the special session tax package because she believed it drew too much on Montgomery County, no other Montgomery Senator joined her and she was demoted by Mike Miller. When Senators Kramer and Rich Madaleno (D-18) revolted against the millionaire tax, again because they believed it would damage their county, only a minority of the county’s delegation supported them. Lonely rebellions fail. Organized revolts can succeed.

Montgomery’s state legislators have a county delegation structure, as do many other counties in the state. This delegation structure does not function as a hierarchical, authority-wielding organization, but rather as a clearinghouse to develop and focus the priorities of the legislators. So far, it has proven insufficient to unite and direct the delegation. That must change. Unless the delegation agrees on a common list of priorities, a strategic plan to enhance the county’s clout and an accompanying internal enforcement mechanism, it will never out-Miller Big Daddy.

In the next four steps we will suggest the elements of such a plan. But organization and discipline are key prerequisites. Once a plan is agreed to, there must be consequences for renegades. Possible punishments range from defeat of an offender’s local bills (bills that apply to the county and must be approved by the delegation) all the way up to bans from district campaign slates. Without punishment, Montgomery’s legislators will strike out on their own and the delegation will not hold together – a situation that critics allege happens all too often right now.

2. Control the Campaign Funding

Many state politicians rely on Montgomery County for one thing: campaign money. Even when they act against the county’s interests, Mike Miller and his co-conspirators will periodically swoop in here for cash. But most of the contributors who live here depend on our state legislators for one thing or another. That gives our legislators leverage over who gets that money and who does not.

Our delegation needs to send a message to all major contributors who live in Montgomery and rely on them for help: do not give money to state politicians who damage the county. Any contributors who break this rule will fall into disfavor with the delegation. This message will be doubly effective if it is also delivered by county politicians. It is bad enough for a major contributor to cross the state legislators; it is even worse to run afoul of the county’s power-brokers at the same time. When Big Daddy’s allies begin to see their private campaign spigots go dry, they will understand that a new day is coming.

3. For Now, Limit New Legislation

Montgomery’s eager, idealistic legislators introduce lots of bills and many of them work hard to get them passed. That is perfectly understandable: the best legislators have clear policy goals and do their best to get them implemented. Over the long run, that is great for both the legislators and the people. But in the short run, there is a cost.

Simply put, getting a bill passed requires an expenditure of political capital. Any legislator who convinces someone else to vote for their bill – or especially, someone in the leadership to support it – is in their debt. Now a favor is owed. When the leader returns to that legislator asking for repayment, the legislator has to seriously consider the request, even if it goes against his or her hometown interest. And so some Montgomery legislators may find themselves pressured to go against the county’s interests to support their public policy goals.

The solution to this is to stop introducing lots of bills. Now the relationship is reversed. A legislator who supports other legislators’ bills accumulates political capital and owes less of it to anyone else. At the appropriate moment, those debts can be cashed in. If the Montgomery delegation followed a common policy to limit introduction of bills, its members would gradually build up a treasure trove of favors by helping others. This will prove valuable later.

We will finish our plan in Part Four.

How to Get Clout in Annapolis, Part Two

In Part One, we covered the prevailing opinion of many about our county’s state legislators: they need to improve their effectiveness in protecting Montgomery’s interests in Annapolis. Step one in doing that is examining the incentives of the opponents.

One of the biggest obstacles to Montgomery’s clout in Annapolis is Senate President Mike Miller. Back in May, we offered this description of Miller’s practice of power:

Better than anyone, Mike Miller understands the volatile and fragile mix of ego, fear, hope, insecurity and the needy desire to be loved that defines most politicians. He knows how to push every one of those buttons. He praises obedient Senators as courageous. He predicts dire consequences for the wayward. He shuffles subcomittee chairmanships and vice-chairmanships like cards in an ever-winning hand. He elevates junior Senators above senior ones when they stick with the boss. A longtime Annapolis player told me, “We call him Big Daddy. When people screw up, he doesn’t get mad at them. Instead, he tells them he's ‘disappointed.’ No one wants to let Dad down.”

Big Daddy is a formidable opponent for anyone seeking more power in state politics, including Governors. Mike Miller wants two things: first, as many Democratic seats in the Senate as he can get, and second, making the holders of those seats dependent on him for money and support. Those two goals go together. As the Democratic Party pushes out into conservative areas (like the Baltimore suburbs, the Eastern Shore and Western Maryland) and increases its Senate ranks, the Democrats who hold those outlying seats are vulnerable. Both Miller and Governor O’Malley have an obvious incentive to direct as much campaign money and state funding to those districts as possible. If Miller can help those vulnerable Senators survive, they will be grateful – and obedient – to the boss. This will increase Miller’s stranglehold on power. But the strategy is only feasible if the resources controlled by Miller and O’Malley are directed to these fragile districts. That means they cannot be tied up in Montgomery County, especially if the delegations in Baltimore City and Prince George’s County are restive.

House Speaker Mike Busch has similar incentives as the Senate President, but he has a larger margin in his chamber and is generally more subtle than Miller. As for the Governor, he is focused on winning Baltimore County in his re-election campaign. So the three most powerful politicians in the state are united in one objective: directing state funding to just about anywhere else other than Montgomery County. Why? Because it does no good to them to shore up an area that is supposedly wealthy enough to take care of itself and liberal enough to vote Democratic no matter what. This is a severe problem for every Montgomery County politician, state and local.

Montgomery has carried this burden for a long time but now things are coming to a head. As we have previously chronicled, the tax hikes of the 2007 special session and the spending cuts of the 2008 general session have not eliminated the state’s long-run budget deficit. Since the legislature will not implement any more major tax increases prior to the next election year and many significant spending cuts have already been made, only two options remain: revenue from the slots referendum and sending teacher pension obligations, which are now mostly paid by the state, down to the counties. Montgomery budget officials tell me that if pension funding is shifted down from the state, the county would face an extra $120 million per year in costs or more. Putting that in perspective, each percentage point of the county’s 5% public employee union pay increase equals about $20 million. That means Montgomery County could cancel the entire pay increase for all of its unionized employees and still be unable to pay the cost of assuming state-funded teacher pensions. One high-ranking budget official described the fiscal impact of a state handoff of pension funding as “a nuclear explosion.”

Will Montgomery County be spared this fate if the slots referendum passes? Not necessarily, for three reasons. First, it will take several years for any casinos to be up and running. Second, slots revenues may not be as high as projected (currently estimated at over $500 million per year). Third, an election year is coming in 2010. The Governor and the legislative leaders will be looking to spend some serious money to get votes. If slots money is not enough, pension obligations may have to be shed. And that means a state-sponsored fiscal nuke will annihilate Montgomery County’s budget.

But our delegation can fight back. We’ll learn how in Part Three.

How to Get Clout in Annapolis, Part One

Montgomery County Council President Mike Knapp, during the council’s recent budget debate:

Montgomery County is “the state’s piggy bank.”

Senator Rona Kramer (D-14), commenting on Governor O’Malley’s broken promise on Montgomery school construction funding:

“I think he's not sensitive to the needs of Montgomery County, and that he's taking the county for granted.”

Gazette columnist Blair Lee:

“The problem is: once a chump, always a chump. Lawmakers who sell out are promoted but never respected. That’s why it was so easy this week for Governor O’Malley to break his promise to give MoCo $55 million of school construction aid in exchange for MoCo’s special session tax and slots votes. Instead, we’re only getting $46.3 million. Can you imagine O’Malley ripping off PG County or Baltimore city that way?

Until MoCo stands up on its hind legs, it will always be shortchanged, double-crossed and pushed around in Annapolis.”

Unnamed Montgomery County politician:

“Our guys are pathetic. Every year they go to Annapolis and every year we get jacksh*t!”

And so it goes. I hear some version of this from nearly everyone outside of the county’s statehouse delegation (and even a softer variant from a couple legislators themselves). The common assessment is that the county’s state legislators are, for the most part, intelligent and progressive but insufficiently parochial. They may get occasional wins on a few liberal priorities, but Baltimore City gets huge amounts of state subsidies and the Prince George’s delegation received a state bailout of their hospital. In the meantime, Montgomery taxpayers get 15 cents back in aid for every dollar they pay in taxes, less than half the state average of 35 cents.

It does not have to be this way. I have met most of our state legislators. Almost all are extremely bright. In fact, no other delegation from any other part of the state can match our people in sheer braininess. Many of our legislators have experience in the federal government as staffers or lobbyists. Many are experts in their policy areas. While the delegation is handicapped by a lack of seniority, the younger legislators are clever and ambitious. And they have the advantage of numbers: Montgomery’s legislators account for 8 of 34 Democratic Senators (24%) and 24 of 104 Democratic Delegates (23%), the biggest bloc in the state. Our legislators have the makings of a great fighting unit for the interests of Montgomery County residents. But first they have a bit of work to do. We’ll get started in Part Two.

State and County Budgets Create Perfect Storm for MoCo

The Gazette and Free State Politics have both covered the state’s continuing budget problems. Now the Gazette informs us that Montgomery County is facing at least a $240 million deficit next year even after closing a $297 million deficit this year. These twin typhoons are coming together to pound the county once again.

First, let’s look at the state budget. Back in April, we noted that despite tax hikes and spending cuts in the 2007 special session and the 2008 general session, the state had not completely closed its long-term deficit. At that time, the state’s Department of Legislative Services (DLS) projected a $243 million deficit in FY 2010 and a $596 million deficit in FY 2011. Thereafter, deficit amounts depended on the passage of the slots referendum. DLS said:

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.

Since then, the Comptroller’s office released estimates of state revenues through May. The Comptroller wrote:

General fund revenues for the month of May totaled $961.0 million, an increase of 15.1% over May 2007. For the fiscal year to date, general fund collections are $11.312 billion, growth of 5.1%. After a steep decline in April (adjusted for the rate increase), the sales tax showed some growth in May. Year-to-date, revenues are slightly under expectations, with underperformance in the individual income tax, sales tax and tobacco tax offset by strong performance from most other revenue sources.

We reproduce the summary data below.


A 5.1% increase in general fund revenues is not a disastrous performance, but the Comptroller states that it is “slightly under expectations.” That is the key. A very large chunk of state spending is driven by formulas, including education, special education, community colleges, Medicaid, library subsidies, land conservation, community services to seniors and aid to counties, municipalities and local health departments plus more. That says nothing of benefit payments to state employees. If these formulas call for a spending rate growth that exceeds the growth in revenues, there will be a gap that must be resolved by the Governor and legislature. Right now it appears that the state’s deficit may very well exceed the $243 million originally projected for next year.

And now we look at Montgomery County’s budget. This blog blanket-covered the County Council’s agonizing, but ultimately successful effort to close its $297 million deficit in May. Now they face at least a $240 million deficit next year. But that could change depending on the state of the county’s economy.

Back in May, I wrote the following on the county’s budget:

As for the future, the most volatile components of the county’s revenues are the two tied to real estate sales: the real property transfer tax and the recordation tax. According to the county’s Department of Finance, residential real estate sales volume averaged over $500 million per month from 2006 through the first eight months of 2007. Since then, residential real estate sales volume has averaged between $200 and $300 million per month. It is this collapse in residential real estate transactions that has caused many of the county’s current budget problems. All policymakers – both inside the government and inside the unions – should watch this figure in the Finance Department’s monthly economic updates. If it rises back up to $400 million per month or more, the county’s real property transfer and recordation taxes will begin to recover. If it falls further, tougher times are ahead.

Since then, the county’s Department of Finance reported residential real estate volumes of $287 million in March, $385 million in April and $381 million in May. Average home prices are still down in the low five hundred thousands (well below the July 2007 peak of $601,995), but unit sales exceeded 700 homes in both April and May, the best performance since last August. If the real estate market continues to improve, the county’s budget office may need to adjust its deficit estimate.

Still, the county’s budget deficit will be substantial and that means the public employee union contracts may very well be back on the table. Right now, the vote count looks precarious for the unions. Council Members Phil Andrews and Duchy Trachtenberg both recommended a 2-point cost-of-living adjustment cut last time. Council Member Roger Berliner supported a two-day furlough. New Council Member Donald Praisner ran on the notion that the contracts should be “reviewed.” The unions may be only one vote away from a contract cut.

Council Member Trachtenberg, Chair of the Management and Fiscal Policy Committee, had this to say to the Gazette:

“Clearly we are expecting revenue that is not on the high end, and we certainly recognize that next year’s budget cycle will be a difficult one,” said Councilwoman Duchy Trachtenberg (D-At large) of North Bethesda, chairwoman of the council’s finance committee. “It wouldn’t surprise me if at the end of the calendar year, we won’t have to look at more program savings, and a possible mid-year savings plan, which are what we try to do in a difficult deficit situation.”

Savings at mid-year would reduce next year’s deficit. That will in turn relieve the pressure on the unions’ contracts. It may therefore be in the unions’ interest to consider scouring their agencies’ budgets for potential reductions.

But any détente at the county level could be easily undone by the state. The lords of Annapolis may very well be preparing a nasty witches’ brew for Montgomery County, including a handoff of funding responsibility for teachers’ pensions. That move alone would easily swamp any savings identified by the unions. And so dealing with the county’s budget problems is not merely the responsibility of the county politicians and the public employee unions. It is also the responsibility of Montgomery’s state legislators to protect the county from any damage threatened by the state’s budget difficulties. We will be discussing this at length next week.

What Might Have Been...

When Senator Patrick J. Hogan (D-39) of Montgomery County stepped down last year, he changed history. We are only now beginning to realize the magnitude of that decision.

Senator Hogan was Vice-Chairman of the Budget and Taxation Committee. Senator Ulysses Currie (D-25) of Prince George's County was the Chairman, so Hogan was next in line. When Hogan retired, a prominent Rockville politician told me, "It's devastating to lose P.J. We are going to get screwed." Shortly afterwards, the Special Session passed an income tax hike that relied disproportionately on revenue from Montgomery County because of its progressive nature. An even greater targeting of Montgomery County taxpayers was the reason much of the county's state delegation fought bitterly, and ultimately unsuccessfully, against the millionaire tax.

Hogan's departure resulted in the promotion of Senator Edward Kasemeyer (D-12) to the Vice Chairman position. Longtime Montgomery County Delegate Marilyn Goldwater (D-16) left around the same time, prompting this observation from the Gazette:

The leadership changes leave Montgomery, the state’s largest jurisdiction, with a single committee chairman in each chamber and House Majority Leader Kumar P. Barve (D-Dist. 17) of Rockville. Baltimore city boasts three chairmen, three vice chairmen and the majority whips in each chamber; Prince George’s County has three chairmen and one vice chairman in the General Assembly.

Montgomery County's committee chairs include the Senate Judicial Proceedings Committee (held by District 16 Senator Brian Frosh) and the House Ways and Means Committee (held by District 20 Delegate Sheila Hixson).

Senator Currie appears to be in some trouble. If he falls, Kasemeyer, who represents Baltimore and Howard Counties, will be in line to become the next Senate Budget and Taxation Committee Chairman. That is good news for a Governor who is targeting swing areas in Baltimore County for his re-election. But it is bad news for Montgomery County. With a Chairman Hogan, Montgomery would have been better able to resist humiliations like this. Instead, the county's politicians will be left to ponder what might have been.

Governor, Leave it Alone (Updated)

One month ago, I criticized Governor O’Malley for allocating $46.3 million for school construction in Montgomery County instead of the $55 million he promised our state delegation in the special session. After that, I was willing to let it lie. I know how tight the state budget is. But the Governor will just not let this go.

According to Maryland Moment’s John Wagner, the Governor went after Montgomery County school construction director Joe Lavorgna at a recent Board of Public Works meeting. The Governor claimed, correctly, that his administration had allocated $98 million for school construction in its first two years – much more than Governor Ehrlich’s $19.6 million. Wagner reports this exchange:

“Was there another county that got as much as $98 million?” O’Malley asked Joe Lavorgna, who oversees school construction in Montgomery County and attended the board’s meeting.

Lavorgna had been invited to the lectern by Franchot, a former Montgomery delegate, to explain the ramifications of receiving less funding than Montgomery officials had anticipated based on closed-door conversations during the special session. During that session, lawmakers took tough votes on tax increases and slot machines.

Lavorgna said that some local money would be used to close the shortfall in construction funding and that some projects could be pushed back.

O’Malley asked Lavorgna to give a copy of a chart showing a comparison to the Ehrlich years to his boss, Montgomery Schools Superintendent Jerry D. Weast. O’Malley said spoke recently with Weast by phone.

Lavorgna appeared taken aback by the exchange.

“I’m not here to complain about the state aid,” he said.

The Governor should have let this drop. Instead, he is putting this issue back in our faces. And he is badly misreading the political mood in this county.

1. Montgomery County residents have just suffered twin hits from state and county tax hikes. No one, not the richest nor the poorest, has escaped them. And on top of that, we are being reminded that our state aid is less than our legislators were promised.

2. The school construction fight exacerbates a long-held perception that the county does not get its fair due from the state. In last week’s apocalyptic budget sessions, County Council President Mike Knapp said from the dais that the state regarded Montgomery County as its “piggy bank.” None of his colleagues disagreed with him. More people are beginning to remark on the statistic that Montgomery gets only 15 cents of every dollar it pays in state taxes back in the form of direct state grants. The state average is 35 cents.

3. School construction is a big issue in this county. Frustration about over-crowded schools was a factor in electing several slow-growth County Council Members in 2006. Last year’s growth policy doubled development impact taxes in an effort to pay for more school capacity. And delays on school improvements have been a hot topic for many county parents over the last several months.

4. Opposition to disparate impacts on Montgomery County drove many of our state legislators to vote against the Governor’s proposed millionaire tax. Now that the Governor is resurrecting the school construction dispute, he is encouraging our delegation to act more parochially. This is unhealthy for his remaining agenda.

Politicians, of all people, are hardly surprised when other politicians break their promises. (It is always entertaining to hear one of them complain about how politicians in general can't be trusted!) The wise thing for the Governor to do would have been to let this lie and move on to other matters likely to attract our state legislators’ support. But instead he is throwing the school issue back at us and inviting discontent. Governor, for your own sake, leave it alone.

Update: The Baltimore Sun has more here. It seems the event was instigated by Comptroller Peter Franchot and that makes the Governor's reaction slightly more understandable. However, the Governor should have known better than to fall into the Comptroller's trap.

Who Really Opposes Slots? (Updated)

Marylanders United to Stop Slots recently released a list of 102 state leaders serving on its steering committee. Of the 15 State Senators and 52 Delegates who voted against last year’s slots referendum, only 12 have signed on for the anti-slots campaign.

The elected leaders on the steering committee are:

Congressman Wayne Gilchrest (R MD-1)

Comptroller Peter Franchot
Senator C. Anthony Muse (D-26, Prince George’s)
Senator Paul Pinsky (D-22, Prince George’s)
Delegate Curt Anderson (D-43, Baltimore City)
Delegate Joanne Benson (D-24, Prince George’s)
Delegate Elizabeth Bobo (D-12B, Howard)
Delegate Aisha Braveboy (D-25, Prince George’s)
Delegate Bill Bronrott (D-16, Montgomery)
Delegate Jill Carter (D-41, Baltimore City)
Delegate Marvin Holmes (D-23B, Prince George’s)
Delegate James Hubbard (D-23A, Prince George’s)
Delegate Tom Hucker (D-20, Montgomery)
Delegate Jolene Ivey (D-47, Prince George’s)
Delegate Gerron Levi (D-23A, Prince George’s)
Delegate Anthony McConkey (R-33A, Anne Arundel)
Delegate Karen Montgomery (D-14, Montgomery)
Delegate Victor Ramirez (D-47, Prince George’s)
Delegate Luiz Simmons (D-17, Montgomery)
Delegate Herman Taylor (D-14, Montgomery)
Delegate Michael Vaughn (D-24, Prince George’s)

G. James Benoit, Anne Arundel County Council Member
Will Campos, Prince George’s County Council Member
Joshua Cohen, Anne Arundel County Council Member
Nancy Howard, Ocean City Councilwoman
Glenn Ivey, State’s Attorney, Prince George’s County
George Leventhal, Montgomery County Council Member
Eric Olson, Prince George’s County Council Member
Ryan Spiegel, Gaithersburg City Councilmember
Bruce Williams, Takoma Park Mayor

Of the above state legislators, Delegates Bronrott, Hubbard, Hucker, Ivey, Ramirez and Vaughn voted in favor of the referendum and Delegate Montgomery was excused from the vote. That means that only 12 of 67 legislators who voted against the referendum, or 18% of the no-votes, have joined the anti-slots coalition.

Also notable is the fact that 13 of the 30 elected steering committee members are from Prince George’s County. Montgomery County, which is often described as a stronghold of slots opposition, only has nine members (counting the Comptroller). Absent from the list are all of the state’s County Executives.

The following state legislators voted against the slots referendum but have not joined the anti-slots campaign:

Senator David Brinkley (R-4, Frederick/Carroll)
Senator George Della (D-46, Baltimore City)
Senator Brian Frosh (D-16, Montgomery)
Senator Barry Glassman (R-35, Harford – a delegate at the time of the vote)
Senator Janet Greenip (R-33, Anne Arundel)
Senator Larry Haines (R-5, Baltimore County/Carroll)
Senator Andrew Harris (R-Baltimore County/Harford)
Senator Nancy Jacobs (R-34, Cecil/Harford)
Senator Allan Kittleman (R-9, Carroll/Howard)
Senator Alex Mooney (R-3, Frederick/Washington)
Senator E.J. Pipkin (R-36, Eastern Shore)
Senator Jamie Raskin (D-20, Montgomery)
Senator Bryan Simonaire (R-31, Anne Arundel)
Senator J. Lowell Stoltzfus (R-38, Eastern Shore)

Delegate Saqib Ali (D-39, Montgomery)
Delegate Susan Aumann (R-42, Baltimore County)
Delegate Charles Barkley (D-39, Montgomery)
Delegate Joseph Bartlett (R-4A, Frederick)
Delegate Gail Bates (R-9A, Howard)
Delegate Wendell Beitzel (R-1A, Garrett/Allegany)
Delegate Joseph Boteler III (R-8, Baltimore County)
Delegate Emmett Burns Jr. (D-10, Baltimore County)
Delegate Rudolph Cane (D-37A, Eastern Shore)
Delegate Robert Costa (R-33B, Anne Arundel)
Delegate Don Dwyer (R-31, Anne Arundel)
Delegate Adelaide Eckardt (R-37B, Eastern Shore)
Delegate Donald Elliott (R-4B, Carroll/Frederick)
Delegate William Frank (R-42, Baltimore County)
Delegate Ron George (R-30, Anne Arundel)
Delegate Jeannie Haddaway (R-37B, Eastern Shore)
Delegate J.B. Jennings (R-7, Baltimore/Harford)
Delegate Kevin Kelly (D-1B, Allegany)
Delegate Nicholas Kipke (R-31, Anne Arundel)
Delegate Ben Kramer (D-19, Montgomery)
Delegate Susan Krebs (R-9B, Carroll)
Delegate James Mathias Jr. (D-38B, Eastern Shore)
Delegate Susan McComas (R-35B, Harford)
Delegate Patrick McDonough (R-7, Baltimore/Harford)
Delegate Robert McKee (R-2A, Washington, since resigned)
Delegate Warren Miller (R-9A, Howard)
Delegate Heather Mizeur (D-20, Montgomery)
Delegate Peter Murphy (D-28, Charles)
Delegate LeRoy Myers Jr. (R-1C, Allegany/Washington)
Delegate Anthony O’Donnell (R-29C, Calvert/St. Mary’s)
Delegate Joseline Pena-Melnyk (D-21, Anne Arundel/Prince George’s)
Delegate Steve Schuh (R-31, Anne Arundel)
Delegate Christopher Shank (R-2B, Washington)
Delegate Tanya Thornton Shewell (R-5A, Carroll)
Delegate Michael Smigiel Sr. (R-36, Eastern Shore)
Delegate Richard Sossi (R-36, Eastern Shore)
Delegate Donna Stifler (R-35A, Harford)
Delegate Nancy Stocksdale (R-5A, Carroll)
Delegate Jeff Waldstreicher (D-18, Montgomery)
Delegate Mary Roe Walkup (R-36, Eastern Shore)
Delegate John Wood (D-29A, Charles/St. Mary’s)

Update:
In an interview on a Cumberland radio station, the Governor renewed his push for slots. According to the Sun:

Gov. Martin O'Malley said today that if a referendum on slot machine gambling fails in November, "it'll be back to the drawing board with a lot of unpopular choices, and I don't think any of us wants to go there."

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.

Update:
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)

In Defense of Taxing Millionaires

The current battle over whether to replace the hated computer services tax with an income tax surcharge on millionaires has become a defining ideological struggle among Maryland state legislators, especially those from Montgomery County. Many MoCo Democrats, including a few really good ones, argue that millionaires pay enough. Today I take up the banner for the rest of us.

The best case for the other side has been presented by David Lublin, founder and owner of this blog. His central arguments are budgetary and geographic. David points out that millionaires pay a lot of taxes. He does not want them to move out because if they do it will hurt our capacity to fund programs we need. He also describes both the computer tax and the millionaire surcharge as targeting MoCo because both affect lots of people who live in the county. “You're replacing one tax which targets Montgomery County with another that does exactly the same,” he writes.

David’s argument is logical and pragmatic, and I respect it. But a millionaire surcharge is a worthy alternative to the computer tax for three reasons.

First, let’s examine how people who earn a million dollars in a year get their money. I will bet that the majority of them do not earn a million dollars every single year. Rather, many of them will earn in the mid-to-upper-six digits in most years but then obtain an occasional spike. That spike may be from a payout in a lucrative lawsuit settlement, a capital gain or an inheritance. Would people in this category really move out of the state because they had to pay a couple extra thousand dollars in a year when they got lucky?

As for the super-rich, those who do earn a million dollars in every single year, they already can park their compensation in tax-deferred vehicles like 1031 exchanges or establish part-year residency in no-income-tax states like Florida and Nevada.

The Washington Post reports that 6,150 Maryland residents reported at least one million dollars in income in 2005 and 2,535 lived in MoCo. How many of those residents earned a million dollars in every single year over the last five years and would therefore be really tempted to move? Possibly several hundred, but only the Comptroller’s office would know for sure. Are these several hundred people really worth the colossal amount of political capital that MoCo’s state legislators are expending on their behalf?

Second, anyone who believes that the economic well-being of our county is a linear function of the number of millionaires who live here does not understand the source of our prosperity. Montgomery County’s vitality comes from its excellent schools, the entrepreneurialism of its small businesses (including those in the tech sector), its highly-educated and diverse population, its attractive neighborhoods and, of course, federal spending. Millionaires live here for those reasons just like the rest of us do. If tax rates were the sole determinant of their residency, they would all have moved to Virginia long ago.

Third, Maryland’s working and middle classes have already paid their share. Just last fall the legislature’s special session passed a regressive tax package. Last October, I calculated that the Governor’s original $1.7 billion proposal derived 61% of its revenues from regressive sources like the sales tax hike. The package that was ultimately passed was worse. The Maryland Budget and Policy Institute analyzed the session’s product and found:

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.

Now I am not opposing all regressive taxes. The cigarette tax, for example, saves lives. The gas tax encourages mass transit use and fuel efficiency. But when a billion-dollar-plus tax package is comprised primarily of regressive measures, that sends a message about the legislature’s priorities. And the principal reason for relying on regressive taxes like the sales tax was the desire by some legislators – including some from MoCo – to limit income tax increases for the rich. Now some of these legislators are talking about cutting transportation funding as an alternative to the surcharge.

Isn’t relieving traffic congestion also a high priority for this county? If the rest of MoCo’s residents sit in gridlock to protect the rich from paying more taxes, isn’t that an example of replacing one measure that targets Montgomery with another, as David says? MoCo Democrats rightly criticized Governor Ehrlich when he diverted transportation funding to avoid raising taxes. And we should not forget how Virginia has suffered for its inability to finance its transportation infrastructure.

Furthermore, let’s recall the unholy moment in which the computer tax was spawned. The creature was conjured from the abyss by the Maryland Senate for the sole purpose of not raising taxes on millionaires to the extent that the Governor originally recommended. Interestingly, no member of the Senate’s Budget and Taxation Committee will admit to fathering the wailing beast in whatever dark corner of the Senate chamber such acts are usually committed. If the Senate had adopted the Governor’s admittedly imperfect proposal, we would never have the computer tax or the current row over the millionaire surcharge.

I once blamed Senate President Mike Miller for the computer tax and the regressive special session tax package, but he proved me wrong. Back in January, I reported the following from our now-legendary blogger interview with him:

Regular readers will recall how I criticized the Senate President for the regressive character of the special session tax package. Leaping into the jaws of the lion, I asked him the following question:

“The tax package that was passed by the special session collected the majority of its revenues from raising the regressive sales tax. If you could have that one back and do it over, would you have taxed the rich a bit more to give the working people a break?”

Miller did not back down from the sales tax. He described it as “the most regressive but also the most acceptable” of the taxes, claiming that he received little protest on it. “But I wish I could have had more from the income tax.” Miller noted, accurately, that part of the Montgomery County delegation, backed by their County Executive, pushed back against the Governor’s rate increase for the top income tax brackets, thereby limiting the legislature’s ability to raise them. “You need 24 votes to pass something through the Senate and I didn’t have the votes to spare!”

And so Mike Miller is actually to the left of a good part of the MoCo statehouse delegation on this issue. That’s right readers, print those bumper stickers: MIKE MILLER: TOO LIBERAL FOR MOCO.

NoCo and the Computer Tax: BFF

So you’ve never heard of NoCo and BFF and don’t understand how they relate to the computer tax? Read on!

The Washington Post is reporting that Governor O’Malley is floating a deal to get rid of the much-hated computer services tax. He proposes to replace its revenue with three sources: a surcharge on millionaires increasing their income tax rate to 6.25% from 5.5%, “diversion” of transportation funds and more budget cuts. Senator Verna Jones (D44 – Baltimore City) proposed to pay for repeal through a high-earner surcharge alone, but the Governor would like to rely on multiple sources instead.

Why is the Governor treading so carefully with the rich? Why, it’s because of our politicians in Montgomery County!

Here is County Executive Ike Leggett’s reaction to the Governor’s plan:

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.

Even blogger hero Senator Madaleno was lukewarm:

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."

Senator Brian Frosh and Delegate Tom Hucker were more accepting of the surcharge, but there are enough MoCo legislators who agree with the County Executive that the delegation has become a significant hurdle to repeal. Many MoCo legislators don’t want the computer services tax. And they don’t want a millionaire surcharge. And they don’t want transportation cuts. That is why, by the power vested in me as the author of this blog post, I am officially changing the nickname of our county from MoCo to NoCo.

Now there are alternatives and I laid one out a couple weeks ago. An extra point hike in the corporate tax rate, combined reporting and installation of the Governor’s original upper income tax rates would pay for the computer tax repeal. And the first two components would spread the pain more evenly across the entire state than a straight surcharge. Plus, all three components are progressive taxes and would partially mitigate the special session’s overwhelmingly regressive tax package.

But if NoCo politicians do not offer an alternative soon – whether it looks like mine or not – we all know what is going to happen. The Governor will make a deal with the General Assembly leaders and the delegations from Baltimore City, Baltimore County and Prince George’s County. Some variant of his proposal will pass because the pressure to repeal the computer tax is reaching a fever pitch. And guess where the diverted transportation money will not be going? You guessed right: some project in NoCo will have to wait a few more years. And who is going to be shedding tears for us in other parts of the state? You guessed it: absolutely no one.

And what if NoCo’s politicians successfully resist repeal? NoCo and the computer tax: Best Friends Forever. And there you have the title to this post.

Why Progressives Should Not Punish Legislators Who Voted for the Slots Referendum

In two of the most critical, hotly contested votes in at least fifteen years, Maryland’s state legislators recently voted to send the issue of slots to a referendum. Anti-slots voters howled with betrayal. Gambling bosses munched their cigars in glee and stroked the cash in their wallets. The forces of evil massed at the gates of I-95, poised to let loose the dogs of addiction and vice into the Free State. So naturally, liberals should punish the traitorous legislators who signed Maryland over to the armies of immorality. Right?

Wrong.

Here are five reasons progressives should not punish legislators who voted for the slots referendum:

1. A special session collapse would lead to more tax hikes and/or spending cuts later

Throughout the special session, Senate President Mike Miller repeatedly warned that failure to pass a slots referendum might lead to general impasse. If that happened, the legislators would have to take up deficit reduction again in the general session in early 2008. But since new revenue collections would be delayed from the end of 2007 to the summer of 2008, the hikes would now have to be about $500 million greater. The most likely source of further tax hikes would be related to the sales tax as Montgomery County’s delegation would no doubt block any further attempt to raise income taxes on the rich. Alternatively, spending cuts would inevitably affect education aid and state government staffing. No wonder labor unions were urging wavering legislators to support the referendum.

Would more sales tax hikes and reduced education spending really be in the interest of progressives? Of course not, so the legislators faced a “lesser-of-two-evils” choice. In fact, this pattern of decision-making was the hallmark of the entire special session.

2. Relationships with the Governor and the leadership are important

A politician’s effectiveness is to a great degree based on relationships with others, the pursuit of mutual gains and resulting negotiating leverage. In Annapolis, the most important relationships are with the Democratic leadership and the Governor’s office. The leadership has exclusive control of committee assignments, committee chairmanships and, by extension, bill appearances on the floor. The Governor has unusually tight control over budgeting as well as the giant apparatus of state government. Every legislator has to negotiate this set of relationships to accomplish his or her priorities as well as to meet the needs of his or her district. Politicians without relationships become pariahs, howling at the moon while the rest of the pack feasts on the night’s catch.

The slots referendum vote was, to this point, the most important vote in the Governor’s political career. It was also a test of the Democratic leadership’s ability to work together (not always an easy task between the two chambers) and clear the table of troublesome budget problems prior to the next round of elections. Any legislator who rejects both the Governor and the leadership in their hour of greatest need runs the risk of ruining their ability to deliver grants, aid, transportation projects and general services needed by their district. After all, should such a legislator later approach the Governor for help, he or she might well be the recipient of an icy glare and a cool, “Where were you when I needed you?”

Again we see a “lesser-of-two-evils” decision. Don’t blame those legislators who acted to preserve their effectiveness on other liberal priorities and constituent service.

3. No one demonstrated ideological purity

One of the great ironies of the special session is the behavior of some of Montgomery County’s “liberal” delegation. The tax hikes that encountered the greatest resistance among such members were the Governor’s increased income tax rates on Maryland’s wealthiest residents. Their opposition was based on competitiveness with Virginia, but why shouldn’t the same arguments apply to the sales tax or the tobacco tax? Why the selective outrage?

Some of the legislators who opposed slots worked to reduce the added taxes on the rich in the Governor’s income tax proposal and did not utter a peep of protest against the $730 million sales tax hike – yet they still call themselves “progressives.” If you are looking for ideological purity, you may find it in church, but you will not find any in Annapolis.

4. Slots will keep coming back unless they are defeated with a referendum

Slots have been on the verge of passing for years. In 2005, both chambers of the legislature approved slots bills but could not reconcile them. Anti-slots activists have known a painful truth for years: all it takes is a handful of changed votes to get a pro-slots majority in the legislature. Given the rates of turnover in state legislative elections, it is possible that sooner or later slots will finally pass.

Everyone knows that a vampire will not die until a stake is driven through its heart. Defeating slots at the ballot box may be the only way to destroy the creature once and for all.

5. Heed the people

There have always been two sets of arguments around slots. First are the economic arguments. Some consider gambling fees a voluntary levy (putting aside addictions) and therefore superior to involuntary taxes. Others say gambling revenues are at least matched by health and welfare spending (and more intangible costs) associated with remedying the problems of addiction. Second are the moral arguments. Some see gambling as a victimless crime, or not a crime at all, and say the state has no business outlawing it. Others criticize gambling as inherently immoral and destructive of our culture.

Those who argue against a referendum are implying that the citizens of Maryland are too ignorant to weigh the economic arguments and are too corrupt and/or weak-minded to evaluate the moral arguments. These sorts of decisions are beyond the capabilities of average citizens and can only be decided by those who manage to get elected. Is this really what progressives think about the masses?

Why should progressives fear democracy? If the reasons for opposing slots are truly superior, Maryland’s progressive community is more than capable of triumphing at the ballot box. And victory is entirely possible. While polls suggest that a majority of Marylanders favor slots, anti-slots activists are much more motivated than pro-slots voters. Liberals may very well win by getting out their vote in anti-slots strongholds like Montgomery County, Prince George’s County and Ocean City. If that happens, perhaps those who voted for the referendum should be thanked by allowing the people to slay the monster once and for all.