We expect, and need, change in Maryland

John J. Walters Jun 9, 2015

Although it might not be reasonable to expect a new governor to completely change the way a state is run during his first few months in office, most of us will do exactly that. Holding our elected officials to a higher standard will hopefully motivate them to listen and to act.

Governor Larry Hogan wanted to “change Maryland,” but has he done that yet?

Yes, he repealed the Rain Tax mandate—but that won’t necessarily stop counties from continuing to collect the tax even when they aren’t required to do so by law.

Yes, he kept budget growth to a modest 1.5 percent for fiscal year (FY) 2016 after the state saw increases of 4.3 and 3 percent for the past two years—but that alone won’t be enough to end the cycle of budget deficits.

And yes, he made it through his first legislative session without creating any new taxes or increasing existing taxes. But he wasn’t able to successfully combat the phase-in of the gas tax increase started by former governor Martin O’Malley that will affect all Maryland residents for years to come.

Governor Hogan truly has his work cut out for him. Despite a number of new laws that modify business regulations ever-so-slightly in the state, Maryland’s business climate is in need of more than a facelift, ranking 43rd in 2013 according to the Maryland Chamber of Commerce.

Although Hogan also promised an end to budgetary gimmicks, some funny business still remains. The FY 2016 budget includes $371.8 million in fund transfers and temporary spending reductions. These stop-gap measures work for one year, but they don’t solve the actual problem of chronic overspending.

Even public pensions, an area where some progress was made to restore funding to proper levels by removing the corridor funding method, is still going to require a reevaluation of how investments are made and how much money is spent each year. Jeffrey C. Hooke and I have written repeatedly about how much money the state could save—and how much more they could earn—if they simply stopped actively managing funds and indexed them.

Changing the state’s business climate, ending the tendency towards overspending and actually fixing public pensions—none of this is going to easy. But if Hogan really wants to change Maryland, those are three issues that cannot be ignored.