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Restless Electorate

Originally Published in the Frederick News-Post

Economic & Fiscal Policy

by Marta Hummel Mossburg

OP-EDS

In April 2008, following both a special legislative session at the end of 2007 and the regular one that raised sales, corporate and personal income taxes, Gov. Martin O'Malley all but declared victory over the recession.

"Over these last 14 months, we have restored fiscal accountability to our state, reduced spending, and have come together to protect our priorities and expand opportunity for Maryland's small businesses and families," he said in a news release.

What has happened since that point in time paints a very different record from the one he trumpeted 3 1/2 years ago, however. Maryland is one of the worst states at creating jobs since the recession ended and has consistently ranked in the top 10 states in the nation for foreclosures. According to a September report from the state Department of Housing and Community Development, Maryland foreclosure rates are the highest in the region, too.

Census data also show that income inequality has increased in Maryland during O'Malley's tenure, and the number of residents needing federal food assistance has risen, too. If that is not bad enough, the governor and legislators still cannot balance the budget despite the extra $1 billion-plus generated from the new taxes passed just a few years ago and the $195 million "surplus" predicted for this year based on increased income tax collections.

That is because the tax increases and the extra revenue are not enough to bridge the difference between what the state spends each year and what it collects. So, the governor and legislators again face the same problems they did in 2007 and 2008. This time around, however, Maryland has a much less competitive tax structure in place, which will hinder it from attracting new wealth, and no federal stimulus dollars.

Whether legislators can so easily raise taxes again -- for gas, the Chesapeake Bay or anything else, in the upcoming legislative session is unclear.

Elected officials have a much more cynical public with whom to contend than a few years ago. Promises about slots revenue have proved false, and state government's good intentions in preventing foreclosures have saved few homes and have not translated to a better housing market. Years of raiding dedicated trust funds for transportation and the Chesapeake Bay have left people skeptical that taxes raised in the name of those issues will be used for them.

Public corruption trials of two prominent state politicians in the past year cannot help, either. And callers to the popular "Ron Smith Show" on WBAL (AM 1090 Baltimore), incensed over the prospect of higher gas taxes in the coming year, barraged phone lines for an entire three-hour program last week.

Even in a state whose voting districts were just redrawn to make it even more Democratic, people will not roll over forever. The uproar and then successful petition drive to put in-state tuition for illegal immigrants up for a referendum is a case in point. O'Malley and legislators may not recognize limits to their power, but people's bank accounts do.