O'Malleynomics Strike Back

Low and behold, look which failed economic platform reared its ugly head again:

Gov. Martin O'Malley unveiled yesterday a proposal to invest $1.1 billion over the next decade to cement Maryland's status as a pre-eminent hub for biotechnology research, including stem-cell studies aimed at finding breakthrough medical advances.

The funding, which would build on existing tax credits and grant programs, would be used to create a biotechnology center, finance capital projects and make equity investments in start-up companies. O'Malley, a Democrat, said the money could transform Maryland - where the human genome was mapped in 2001 - into a global leader in personalized medicine or the use of genetics to tailor treatments.

That's right boys and girls, O'Malleynomics are back. Once again, Governor O'Malley is going to stick the state's nose where it doesn't belong, in the private sector, and reallocate taxpayer dollars in order to fund unnecessary state priorities.

Don't get me wrong, I am very much in favor of science, and I am comfortable with the idea of tax credits to encourage further business growth in the state. But will O'Malley and state Democrats ever learn their lessons when it comes to government investment in private businesses? What role should government have in financing capital projects for private businesses? Why should the state gamble taxpayer dollars as part of venture capital schemes?

What's even further damning about O'Malley's plan is that it comes on the heels of higher taxes and reckless spending during the previous General Assembly session. The most important tax raised by the Democrats during that session was the "Millionaire's Tax" that disproportionately impacted Montgomery County, the very area most likely to benefit from O'Malley's largesse. The irony, of course is that it is likely that the necessity of these proposed state investments in biotechnology probably could have been avoided had O'Malley and company not created incentives for companies and entrepreneurs to relocate to Virginia due to Maryland's profligate tax and spend nature and the impact of the O'Malley Recession.

Time and time again, instead of encouraging private development of economic resources, instead of allowing the market to create a sustainable environment for economic growth, Governor O'Malley has returned to the failed policies of O'Malleynomics to try and earn political capital and to prop up industries that he favors. Time and time again, we have seen the impact of O'Malleynomics produces higher taxes and lower disposable income for middle and working class Marylanders, and the benefit, if any, from O'Malley's plan to throw money at this project is going to be infinitesimal, if such benefit exists at all.

If you missed the policies of economic failure, they are back with a vengeance...

For Larsen, PSC was never about the Public or Service

Public Service Commissioner Steve Larsen is stepping down, and I think that Marylanders should be happy to be rid of him.

Larsen was never the guy O'Malley promised us, promising a professional regulator who was going to make sure energy rates for consumers were lowered. Instead, we got a professional statist with a long record of sticking it to taxpayers who was more interested in cockamamie sticking it to taxpayers and keeping rates as high as possible in direct contradiction to Governor O'Malley's promise.

Of course, the Baltimore Sun's article on Larsen was a complete puff piece, talking about how Larsen was a "quick study" of energy issues that he was unqualified to be discussing. And of course there was talking about Larsen's great bipartisanship, which meant we got a quote from the one Republican always willing to kiss Governor O'Malley's ass:

Both Democrats and Republicans in the General Assembly said Larsen did a good job leading the PSC.

"He certainly worked to be nonpartisan, and with both sides of the aisle," said Del. James King, an Anne Arundel County Republican on the Economic Matters Committee, whic handles many of the energy issues. "Unfortunately for me and every other resident in the state of Maryland, I don't think we solved a lot of the issues that we face with the energy situation, but I don't think that's from any lack of effort."

I would say that we should hold up that Governor O'Malley's new PSC Commissioner is going to be more sensible, but guess what? This one's a trial lawyer:

Though little known in Annapolis, Nazarian handled numerous high-profile cases before Maryland courts. Among them was a 1998 case where he successfully challenged the arrest of paroled inmate Vincent Henderson. Henderson was among dozens who were re-arrested after the state concluded it had incorrectly calculated the amount of good behavior time due some inmates, and prematurely released them. The case resulted in the release of nearly 50 inmates.

Nazarian also represented the state in a series of lawsuits against the law firm of Orioles owner Peter G. Angelos. The case related to attorney's fees Angelos was due in connection with national tobacco litigation.

"His experience doing litigation and preparing cases is exceedingly good training for now trying to set policy and decide issues in the regulatory context," said Ralph S. Tyler, Maryland's insurance commissioner.

Great.....just what we need. And Tyler finishes up with this quote about the new Commissioner:

"I expect that [Nazarian] will lead the commission in a way where it will be fair, but it will be fair in looking out for the public interest," he said.

Not bloody liklely. But what I do suspsect is that Nazarian will be a chip off of the Larsen block, attempting to lead Maryland further and further into an O'Malleynomic hell of higher regulatory costs, higher energy costs, and ever higher taxes. Like Larsen, serving the public interest will be the farthest thing from his mind...

The Brian Griffiths Minute: 5-4-2008

Of course not, that would be helpful

It's not liked anybody expected the O'Malley Administration to do anything to benefit taxpayers, but still:

With gas prices continuing to reach new heights, the part of the cost controlled by federal and state governments is coming under increasing scrutiny as some politicians lobby for a break during the summer driving season.

Officials in Gov. Martin O'Malley's administration, however, caution that any reduction in gas tax revenue - which is dedicated solely to transportation spending - would hurt the government's ability to maintain roads.

"It might be a 'penny wise' and a 'pound foolish' at this point, especially since we've seen chronic underfunding of our transportation system," said Rick Abbruzzese, the governor's press secretary.

No, because god forbid the taxpayers of Maryland actually get a break after the Democrats pillaged them time and time again over the last few months. What's even more absurd is that Rick Abbruzzese actually talked about the chronic underfunding of transportation when the O'Malley Administration raided the Transportation Trust Fund to cover the excesses of their profligate spending!

Maryland taxpayers need a break, even if it is a largely symbolic break on state gas taxes. The fact that O'Malley and Maryland Democrats refuse to take even such a minor step to benefit the citizens of Maryland shows the kind of contempt these people hold taxpayers in: you are an ATM to benefit their pet projects, enrich their cronies, and keep them in office, and nothing more.

The Recession Proof Economy and other Liberal Economic Myths

Isaac Smith tries to climb his way out of his remarks about the "conservative" General Assembly by making some more odd points, the first of which is by again talking about the myth of a recession proof economy:

Of course, Brian's point (I think) is that the tax increases are exacerbating the recession's effects in Maryland, which is debatable; certainly the Washington suburbs have been doing better than the national average in terms of employment, and Maryland's unique economic features make it more resilient to downturns generally. Things could get worse, however, if the state made the draconian kind of budget cuts that Brian and other Republicans have been clamoring for. As I've noted before, budget cuts during a recession are actually more harmful to the economy than tax increases, since it exacerbates the problem of falling consumption by reducing consumption even further.

And yes, that was the point I was trying to make; that an already bad economic climate is being made worse by Annapolis Democrats. Of course, liberals in Annapolis always try to fall back on the idea that Maryland's economy is recession proof due to the shear number of federal jobs and federal spending that is tied into the Montgomery and Prince George's County suburbs. The fact of the matter remains that despite this "unique economic feature" as Isaac likes to call federal spending, federal workers can also be disproportionately harmed by higher taxes and higher spending at the state level. Just because their jobs are "recession-proof" doesn't mean that the diminution of their purchasing power thanks to higher taxes and the higher price of goods and services is going to be stopped, too.

As far as budget cuts during a reccession harming the economy, that just make little sense. The preponderance of the additional spending proposed an enacted by the O'Malley Administration deals with increasing the size and largesses of government, not the reduction of capital projects that are already budgeted and under contract. This is further exacerbated by the fact that much of the spending cuts and the diminution of purchasing power could have been avoided if spending were cut in the first place since the spending cuts could have provided relief from the "need" for higher and higher taxes. And besides, remember what happened when Roosevelt tried to spend his way out of a massive economic downturn. The type of spending that Isaac suggests is the type of spending that bankrupted the Soviet Union.

I am heartened by the fact that Isaac realizes that the elimination of balanced budget requirements in Maryland is foolhardy, but I could not disagree more with this reasoning:

Ideally, what you would want is for the state to build up its rainy-day fund during boom times and spend it down during bust times (what's known in economic jargon as countercyclical fiscal capacity), so that there's some stability in the functioning of government programs. Unfortunately, Maryland's rainy-day fund went dry in 2007, so that option is closed off.

No, ideally what you want to do is have a government that only takes as much money from its citizenery as it needs to provide the most basic of services; schools, fire, police, etc. I'm pretty sure I didn't volunteer to make an interest free loan to the State Government in order to stash away money for pet projects when times are rough. Should there be a rainy-day fund? Yes, but only for actually fiscal emergencies to meet the most basic of collective services, not just for the sake of out-of-control spenders trying to balance the budget when tax revenues fail to meet expectations.

And finally, we get this:

I'm hoping, then, that if the recession persists, as seems likely, Congress will push for greater federal aid to the states, which would allow programs like Medicaid and unemployment assistance -- which are high in demand during a recession -- to get to more people who need it.

Actually, the last thing we need to do is for Congress to start doling out more money to the states. States should be able to find ways to fund these programs out of their own fiscal houses and not really on additional federal assistance above and beyond what is already in place. The state budget should have adequately prepared for increases in Medicaid and unemployment claims when the General Assembly adopted it last week, but I'm sure that pet projects were more important to legislative leadership than this already existent spending.

The argument that Maryland does not spend enough and that we should continue to maintain current spending levels during the O'Malley Recession flies in the face of responsible government, and I find it hard for Smith and others to continue making spurious arguments for the continuation of this reckless fiscal posture.

The Liberal Kool-Aid Acid Test

Whatever Isaac Smith is drinking don't follow suit, because this is the kind of thinking that is destroying Maryland:

One more thing I should add is that I think we can explain the right-ward lurch, as Paul puts it, in the General Assembly this session as a reaction to the economy taking a nosedive and the aftermath of the special session.

There are a number of just completely ridiculous things in that brief sentence. First is the accusation that the General Assembly took a "right-ward lurch." Only somebody to the left of Mao could think that this General Assembly lurched in any direction but towards a Maryland that taxes its citizens to the hilt, spends more than it can afford, and looks to find ways to interfere with the lives and the civil liberties of its citizenry. This is the Maryland that Isaac Smith claims he wants, but this is a Maryland that isn't far to the left enough for Smith and the fringe left.

Of course, Smith fails to acknowledge that part of the reason for "the economy taking a nosedive" here in Maryland is precisely due to the Special Session and the O'Malley Recession that was born from it.

Then, as if Maryland didn't have enough spending problems:

I know I harp on this, but the inability of states to do deficit spending like the federal government severly constricts what states can do during a recession.

Yes. Smith came out and endorsed deficit spending as the solution to our problems. Fortunately, the State Constitution in Maryland requires us to have a balanced budget, or lord knows how much Martin O'Malley and his crew could have begged, borrowed, and stolen from this General Assembly and, ultimately, the taxpayers. The reason that we are not allowed in Maryland to have deficit spending is for the precise reason that Smith wants us to spend into deficit: so that irresponsible, financially dimwitted elected officials can't try and spend our way out of economic problems. We are already taxed to death and concerned with our bond rating: how does Smith think that deficit spending is going to magically solve those problems?

Finally, we get this:

Given that environment, it's easy to see how O'Malley and the General Assembly adopted a tempermentally, if not ideologically, conservative stance on fiscal matters.

I am stunned that somebody as financially to the left as O'Malley can be called a conservative on any financial issues when he continues to spend beyond the state's means and continues to try to tax Maryland's middle class and working families into poverty and brokering deals that will require families to spend more on electric rates.

Folks, Smith is part of the fringe element that we have to deal with. People of this kind of fringe mindset are the ones shaping policy in Annapolis. I talk a lot about how important the 2010 elections are, and this is why: we cannot let absurd, irresponsible, and reckless ideas such as this ever enter the mainstream or else Maryland will be doomed to financial devastation and widespread poverty for generations to come.

This is why we continue the fight....

The Morality of Taxes

Sun reporter Michael Dresser provides virtually glowing commentary in beginning his article about the new "Millionaire's bracket":

It's quite an exclusive club, Maryland's new millionaires' tax bracket. A little more than 6,000 households statewide qualify for the distinction - more than 40 percent of whom reside in Montgomery County....

...With the General Assembly's passage of the new 6.25 percent top tax rate on incomes above $1 million, and Gov. Martin O'Malley's signing of the bill yesterday, Maryland has apparently become the first state to create an actual millionaires' bracket.

Some other states have created high-income tax brackets - some paying rates that make Maryland's levy look like a bargain - but they kick in at lower thresholds. For instance, New Jersey residents in the top income bracket pay a rate of 8.97 percent but don't receive the cachet of being in a millionaires' club because it applies to all income above $500,000.

Democrats even found the opportunity to trot out cheerleaders to talk about how great it was that Annapolis was going to screw them tax them more:

"I've had numerous people come up to me in the course of these last few months and whisper to me that they are in that highest bracket of millionaires and they are willing and they are able to pay their fair share," he said.

By the end of the session, the idea of taxing the rich wasn't looking so bad to many of the Assembly's leaders. O'Malley jumped aboard the repeal bandwagon and re-endorsed the millionaires' tax.

Ed Hale, chief executive of First Mariner Bank in Baltimore, said he told O'Malley the computer tax had to go - even if he had to pay more in income tax.

"Any self-respecting person that was wealthy enough could pay more tax just because of the quality of life in the state of Maryland," he said. "It's much ado about nothing for a very few people."

Which is fantastic. Maybe Ed Hale can pay my taxes too if he thinks it's so awesome. And just to prove the point how awesome this all is in the eyes of the Sun and the eyes of Annapolis Democrats, let's go to an example:

The average income reported by those in the new bracket was $3.1 million. That translates to an extra $15,000 a year for three years until the surcharge sunsets - or just about the $45,000 that would put a mid-range BMW in the three-car garage - compared with the law at the beginning of the session. (In some cases, some of that extra cost could be offset by federal tax deductions.)

That argument is, of course, ridiculous. It is ridiculous to think that a millionaire is being hosed out of a BMW because of the new O'Malley taxes. The millionaire's are going to miss the money just like anybody else is. Of course, what cheerleaders for the O'Malley tax won't tell you is the fact that $45,000 out of the pocket of somebody who qualifies for this tax bracket may be reducing that individual's capability to send that money directly back to the community, whether it be in the form of charitable donations or continued reinvestment into the local economy. That $45,000 could be better spent on job creation in the private sector than it will certainly be spent in the black hole that is Annapolis.

But the conversation we need to be having here has nothing to do with how poorly government wastes money, or how much better the private sector can spend it. It actually deals with the moral questions of taxes. How can government retain the moral high ground, particularly a government that claims that it is for the working men and women of Maryland, when most of the impact of the O'Malley Recession is being felt by these same work class folks? To paraphrase George Bailey, the working class people who are most hurt by what O'Malley and company are doing, they are the ones who do most of the working and paying and living and dying in this state.

So how come a disproportionate burden is placed on the middle and working class families of Maryland to pay for programs that make rich urban liberals feel better?

What we have right now in Annapolis is a situation involving taxes and the question of morality. How can government remain moral when government is doing its part to make it impossible for Maryland's working class families to survive financially? Why should parents who want to raise their children in the same communities in which they grew up be forced to choose between making ends meet or moving to another state in order to relieve themselves of the financial burden of living in Maryland? Why should the middle and working classes be forced to pay for unnecessary programs to which they receive no benefit? And how can Government maintain maintain its own sense of morality when it continues to ask more and more of citizenry in the middle of an economic downturn when this same citizenry is already overburdened with oppressive taxation at all levels.

The moral question of taxes is whether or not taxes in and of themselves are moral. The question is whether or not those who make tax policy, those who think that the citizenry is nothing more than a checkbook, those who believe that by taking more and more money away from taxpayers government can make taxpayers more economically viable, have the moral compass to do the right thing and reduce the oppressive burden on Maryland's taxpayers. And given the position of O'Malley and the legislative leadership, by their actions to raise more taxes and spend more money when we can least afford it, I think we have the answer to those questions.

O'Chutzpah

Man, this takes either a great deal of guts or a great lack of foresight:

As lawmakers worked Monday to trim state spending to balance Maryland's budget for next year, Gov. Martin O'Malley proposed $18.2 million in new expenditures, much of it earmarked for health care, programs for children with disabilities and a fund to help the poor pay their electricity bills.

O'Malley called for additional general fund spending totaling $28.7 million over the next two years but also proposed significant expenditures relying on special earmarked funds, some of which are nearing approval by the General Assembly.

Seriously. The General Assembly is trying to cut $300 million from the budget, and the Administration is trying to sneak in additionally supplementary funds to pay for things that, realistically, we don't need.

While he makes a hefty salary to do it, I somewhat sympathize with Rick Abbruzzese for having to go defend this:

O'Malley spokesman Rick Abbruzzese defended the governor's submission of a supplemental budget request -- an annual tradition -- at a time when lawmakers are struggling to balance the state budget and repeal an unpopular computer services tax.

"This is a very lean supplemental budget that goes directly to making government more effective and more efficient," Abbruzzese said. He said the governor focused his spending requests on "core services" such as juvenile services, state police and aid for infants and toddlers with learning disabilities.

Of course, the truly lean supplemental budget would have zero dollars contained in it because of some sort of revelation to the Administration that we have a budget crisis.

I wonder what it is finally going to take for somebody on the second floor to understand that Martin O'Malley cannot tax and spend Maryland into prosperity. This continued reckless spending is just continuing to propagate preexisting problems with our state's financial posture. It takes a lot of chutzpah to offer a wasteful supplementary budget when we have a budget shortfall during a recession. But what exactly is it going to take for Democrats in Annapolis to act in a fiscally responsible manner?

Hosing those who can leave, and other fiscal silliness

So, here is the proposed tech tax solution:

Gov. Martin O'Malley and top leaders in the General Assembly are lining up votes for a plan to replace Maryland's new computer services tax with an income tax surcharge on top earners and cuts to transportation and other spending.

The plan has the backing of Senate President Thomas V. Mike Miller and Sen. Ulysses Currie, the Prince George's County Democrat who chairs the powerful Budget and Taxation Committee....

....O'Malley, a Democrat, discussed ways to repeal the $200 million levy in a closed-door meeting with legislative leaders Tuesday night. The consensus that emerged was to try to raise $100 million by creating a new income tax bracket of 6.25 percent for people earning more than $1 million, according to those who attended the meeting.

An additional $50 million would come from the state's $400 million Transportation Trust Fund, and the rest from additional budget cuts.

So, we are going to go ahead and try to further fleece those Maryland taxpayers who are simultaneously most able to pay more taxes and able to pick up and move someplace that their tax burden won't be so high? This is what passes for fiscal responsibility in the minds of Maryland Democrats?

What cracks me up even more is the fact that the 6.25 percent tax bracket will be a "temporary" tax bracket. Does anybody really believe that this crew in Annapolis would ever repeal this new bracket?

What's bizarre is the fact that the tax solution calling for a higher tax bracket is now being joined by $300 million in proposed cuts:

House and Senate leaders began this morning to hash out a deal over the fiscal 2009 budget that is expected to include more than $300 million in cuts, although negotiators largely put off until tomorrow discussions over the most contentious funding questions.

"We're making good progress," said Sen. David R. Brinkley, the Senate minority leader from Carroll and Frederick counties, who is one of eight lawmakers on the budget conference committee. "It's a tough budget year, and there are a lot of hard decisions to make across the board."

So far, lawmakers and legislative staffers said, the differences between the spending plans are not as formidable as they have been in previous years. They predicted that much of the rancor over budgetary issues will come not from these negotiations, but from the question of how to make up for a repeal of the sales tax on computer services.

So now we are going to cut more money from the budget than the tech tax would raise, but legislative leadership still wants to replace that money with more taxes? Is that logical?

I hope that the taxpayers of Maryland are paying attention to this charade in Annapolis, because I hope that it is becoming clear to them that their elected leaders in Annapolis don't have the financial interests of the taxpayers first and foremost in their minds.....

Reckoning

Only now does it seem that Annapolis Democrats are finally beginning to realize the hole they dug for themselves during the Special Session:

A day after Gov. Martin O'Malley said he wants to repeal imposing a sales tax on computer services, Senate President Thomas V. Mike Miller, Jr., D-Calvert, warned that rescinding it could mean education funding cuts.

The movement to repeal the "tech tax" is growing in the Senate this past week as public opposition continues at high pitch. The General Assembly passed the tax last fall during the special legislative session, as part of a plan to close the state's $1.5 billion deficit.

However, Mr. Miller said yesterday there is little need to hike taxes in the last several weeks of the General Assembly session to cover for the estimated $200 million that would be lost if the tech tax is struck down. In fact, the senate president has previously declared no more taxes will be raised during Mr. O'Malley's term.

The statements illustrate a bigger quandary surfacing in the legislature. During the past three months almost all of the good things that were supposed to have come out of the special session have been threatened.

Which of course a lot of people on the right, including myself and my compatriots at RedMaryland were warning about before, during and after the Special Session. While a central theme of O'Malleynomics is that you can spend whatever it takes in order to achieve their liberal utopia, it is going to come at the cost of small businesses and at out of the pockets of middle and working class families.

The problem is that the tech tax is only the tip of the iceberg when it comes to the negative impact that the Special Session tax hikes are going to have on Maryland and are going to have on our economy. While the Administration and the General Assembly realize how bad of a decision it was to pass this one tax, they still refuse to reasonably acknowledge the need to cut spending. Senate President Mike Miller seems to be the only one who understands that, and I am sure that the O'Malley camp already has a new tax proposal in the works to cover the cost of the tech tax repeal.

I think for the first time Maryland Democrats are realizing that they are going to have to face a reckoning in November 2010. They are going to have to answer for the all of the harm they are causing Maryland's taxpayers...

Impending Global Warming Hysteria induced Economic Cataclysm somewhat averted

I bet you that the people of Western Maryland won't give a lick about global warming if this happens:

A bill being considered in Annapolis today would require businesses across the state to cut their average emissions of pollutants that cause global warming by 25 percent by 2020 and by 90 percent by 2050.

Gary Curtis, a vice president of NewPage, said these limits could mean he would have to replace coal with natural gas - which creates less carbon dioxide but costs five times as much.

He said he could try to make his machinery more energy-efficient, but that would shave only a few percentage points off his fuel consumption. Substituting wind or solar power for coal wouldn't work, he said, because they are not reliable enough to run his wood pulping machines 24 hours a day, 365 days a year.

"It would basically put us out of business," said Curtis, as he watched a clattering conveyor belt carry logs into a machine with whirling blades.

"We need to have [pollution] goals that are aggressive but achievable - and forcing us to do this much would be disastrous," he said.

With 950 employees, NewPage is the largest industrial employer in Western Maryland. And it's one of several businesses in the state, including the former Bethlehem Steel mill and power plants, that have complained that the Global Warming Solutions Act could make it impossible for them to compete by imposing limits that do not exist in other states or countries.

I'm glad that the O'Malley Administration is so dedicated to global warming that they plan on finishing off the state's economy once and for all in the process. And the impending economic disaster will be far worse for places in Western Maryland, where there are fewer industrial related jobs than it will in the Baltimore area. Places like Luke (population: 80) are dependent on these jobs to keep their economies above water., and it is something that impacts their entire region:

"This is one of the lone remaining heavy industries in the whole region," said Matt Diaz, director of economic development for Allegany County. "If it closed, it would have a ripple effect all over Western Maryland, impacting not only mill workers, but also a lot of loggers and coal miners and truck drivers."

The fact that the O'Malley Administration is content to kill off economies across Maryland for a visionless plan based on junk science should give all Marylanders pause...

....which made it even more curious to see this today:

The O'Malley administration today proposed paring back a bill aimed at reducing global warming pollution after Maryland industries warned the legislation could put them out of business.

Instead of mandating a 90 percent cut in greenhouse gases statewide by 2050, an amended version of the bill would set this as a goal that the state should write a plan to try to reach, officials said.

"The Maryland Department of the Environment will institute the planning process to get to the 2050 goal ... but we want to clarify that the bill does not require a straight out 90 percent reduction," Maryland Environment Secretary Shari Wilson told a joint hearing of State House committees this afternoon.

Which means this bill is actually even more pointless than before. However at least we have seen at least some capability of common sense to seep into Annapolis before we try to close the last remaining industrial wage-earning jobs we have here in Maryland.

This crisis has been averted, hopefully because legislators realized the damaging consequences to Maryland's working families.

Cutting Crew

After raising billions in taxes and approving billions in new spending, the General Assembly finally realized "Hey, we have to cut some things in the budget":

Worried that a faltering economy could cause a worse-than-expected slowdown in the state's finances, Maryland lawmakers are exploring deep cuts in Gov. Martin O'Malley's proposals to bolster spending on the environment, health care and other programs.

Lawmakers have been looking for $200 million in cuts in O'Malley's proposed budget to compensate for the flagging economy, but now they are saying that could rise to $300 million or more when updated revenue projections come out next week.

The Sun story (which, incidentally, makes no mention of the half a billion in new entitlement programs approved during the Special Session) goes on to note this gem:

"The likelihood is, given the national economic downturn, that those difficult series of decisions will continue," O'Malley said. "Everybody is looking at the revenue estimates, and if they are coming in lower than projected, there will have to be further cuts."

This isn't exactly breaking news, and the talk of a recession was going on during the Special Session where O'Malley insisted that the legislature do further harm to the economy.

Crazy thing is that, once again, Peter Franchot looks like the only prominent Democrat who understood what was going on during the time of the Special Session:

Franchot cautioned against holding a special session last year, saying there was no immediate fiscal crisis and that unintended consequences could stem from acting in haste to plug a projected budget gap.

So far in fiscal 2008, corporate income taxes are nearly 24 percent lower than at the corresponding time the year before, according to the letter. Though such tax receipts are volatile, they are lagging "well behind" expectations, Franchot wrote.

General-fund sales tax receipts were 5.5 percent lower in January than in the corresponding period a year ago, reflecting slow December sales. Franchot called that figure "surprisingly weak."

All of this really isn't that surprising when you consider that legislators were warned about potential revenue losses stemming form higher taxes.

The complete incompetence of O'Malleynomics is in full bloom in Annapolis ladies and gentlemen. The combination of tax increases and spending increases has served to hamstring the General Assembly. While I am glad that something is being done to curtail OMaley's profligate and ill-advised spending, I wish only that members of the Legislative Leadership will realize their foolish ways and roll back all of the historic and unnecessary tax hikes enacted during the Special Session...

Obviously we're all going to die!

Now that I've got your attention, it's time to break out the parkas, folks (H/T Instapundit)

Twelve-month long drop in world temperatures wipes out a century of warming

Over the past year, anecdotal evidence for a cooling planet has exploded. China has its coldest winter in 100 years. Baghdad sees its first snow in all recorded history. North America has the most snowcover in 50 years, with places like Wisconsin the highest since record-keeping began. Record levels of Antarctic sea ice, record cold in Minnesota, Texas, Florida, Mexico, Australia, Iran, Greece, South Africa, Greenland, Argentina, Chile -- the list goes on and on.

No more than anecdotal evidence, to be sure. But now, that evidence has been supplanted by hard scientific fact. All four major global temperature tracking outlets (Hadley, NASA's GISS, UAH, RSS) have released updated data. All show that over the past year, global temperatures have dropped precipitously.

And yes, there is a handy-dandy chart to show the cooling.

As I keep saying, in the long-term picture this means absolutely nothing. But it is interesting to see scientific evidence as to how much our planet has cooled just in the last year.

And that, of course, makes all of this stuff coming out from the O'Malley administration about carbon trading, carbon credits, and all of the other global warming nonsense coming out of Annapolis that much more farcical. While it's a typical tenet of O'Malleynomics to act before thinking, we should make sure that we fully understand what is going on around us before we go to great lengths to destroy Maryland's economy.

The Results of O'Malleynomics

One of the net results of the computer services tax that the Governor and the General Assembly railroaded through the Special Session is that it is becoming more and more attractive for tech businesses to cut bait and leave the state:

In January, just as anger over a new tax on computer services was beginning to boil over in Maryland's high-tech sector, Robert Epstein received a call from the Pennsylvania Department of Community and Economic Development.

"This guy called and said, 'I don't know if you've heard of the computer tax coming on board in Maryland. ... Have you ever thought of opening an office in our state or relocating to our state?'" recalled Epstein, president of About-Web LLC, a 52-employee, information technology firm based in Rockville.

After poring over maps last week with Pennsylvania officials courting his and other companies in Maryland, Epstein said he is thinking of moving a large chunk of his business to York, where employees can serve Baltimore-area clients. He's already committed to investing more resources in an office he has in Virginia.

Other technology executives in Maryland tell similar stories of being approached by officials from neighboring states and by commercial real estate brokers looking to capitalize on widespread discontent in the information technology sector over the new tax.

Of course, anybody with half a brain can understand that when you make the business climate less and less appealing by continuing to raise the cost of business, business leaders are going to do what they have to do in order to continue to keep costs low. If, as in the example above, businesses can serve Baltimore and still relocate to a place like York with lower taxes, they are going to leave much like so many folks who work in Baltimore have moved to the Red Lion and Shrewsbury areas the last fifteen years.

What's amazing is the fact that the O'Malley Administration is completely oblivious to the fact that business might actually take advantage of such economic benefits:

Gov. Martin O'Malley's secretary of economic development, David W. Edgerley, said yesterday that his office is aware that Pennsylvania and Delaware have recently targeted Maryland computer companies. He said he is "monitoring the situation" but does not believe it is widespread.

"It is standard operating procedure behind the scenes to try and take advantage of any opportunity," Edgerley said of states' business development agencies. "I don't think it will be very successful."

I'm not even sure how one could say that logically. Does Secretary Edgerley really believe that businesses are so tied down in Marlyand that it doesn't make economic sense for them to move? This is particularly true of small businesses. It might make more sense that a large operation with a number of sunk costs will not pull up roots and leave quite so quickly. But small businesses, the backbone of our local economy, tend not to have those sunk costs. If they can continue to serve (or even expand) their customer base and save money on the cost of doing business in the process, why wouldn't they?

And reasonable people understand that:

Greater Baltimore Committee head Donald C. Fry said that position betrays a naivete about the uniqueness of the computer services industry: "Whenever the business community raises concerns about taxes and talks about the possibility of leaving, the state government leaders seem to believe that that's just not going to happen because there are other compelling reasons for them to stay."

The computer services tax is different, Fry argues, because the high-tech industry is "much more mobile. ... You don't have to bring in moving vans. You can do it electronically."

The irony of the computer services tax is rich when you consider how much time and effort state and local leaders have spent trying to turn Maryland into a player in the technology field. How many times have they tried to woo businesses to our state in order to create a Tech Corridor in Montgomery County, or try to woo businesses to downtown Baltimore. The administration seems to fail to realize that businesses that could be wooed here can also be driven out of town by decisions that negatively impact their bottom line in such a way that it makes it difficult for them to do business.

When will Maryland Democrats, particularly Governor O'Malley, learn that you cannot tax your way to prosperity?

Plain Silliness

The Maryland Transit Administration already has a hard enough time running an operating system, and is a complete failure when it comes to keeping passengers safe. But that doesn't stop the Sun from wanting to expand the MTA's role where it does not belong:

Simply put, it says that the creation and support of transit-oriented development should be a priority for the Maryland Transit Administration. That's not a new concept, but the O'Malley administration bill marks the first effort to set the goal into law. And while there are numerous such projects in the works, support for them - political and financial - has not always been as strong as it should be.

Transit-oriented development should be a no-brainer. Building projects with retail, offices, residential and parking facilities immediately adjacent to rail or bus service increase ridership and better serve the community....

...But promoting development is quite a departure from the traditional role of the MTA as merely a builder and operator of transit lines. It means, for instance, forging agreements with developers and local government to encourage visionary projects. That may involve promoting tax abatements or zoning exceptions, the standard tools of local government-fostered economic development.

Of course, the MTA has absolutely no business in working on the kind of projects the Sun suggest that they work on. Suddenly though, the Sun seems to think that the MTA is the kind of effective government agency that should use its vast experience in development issues to help plan transit oriented development.

Of course, when you consider that the MTA can't get the easy stuff right, can't protect their customers even after promising solutions, and wants to spend billions upon billions of dollars on 28-year plans, I can see where the Sun would get that idea. I mean, they are such an effective organization and they clearly have no problems with their system. The MTA is surely the organization to lead Maryland into the next 25-years of urban policy.

Sarcasm aside, the Sun's rah-rah support of this is a complete joke, albeit unsurprising given that the bill in question is being pushed by the O'Malley Administration. And check out this nugget from the legislation:

"TRANSIT-ORIENTED DEVELOPMENT" MEANS A MIX OF PRIVATE OR PUBLIC PARKING FACILITIES, COMMERCIAL AND RESIDENTIAL STRUCTURES AND USES, IMRPVOEMENTS, AND FACILITIES CUSTOMARILY APPURTENANT TO SUCH FACILITIES AND USES.

So by definition, we're going to find ourselves with the MTA as a new de facto MEDCO type outfit, creating development projects that are going to be competing directly with the private sector. And those of us in Anne Arundel County know what happens when those projects, as one would suspect they would, go south, though we know that O'Malley and his team never learned those lessons.

The Administration and the Sun both seem to lack the understanding that when an organization is failing to do the job that they were created to perform, it is then probably not a good idea to task that organization with different, completely unrelated responsibilities and expect anything good to happen for our state and certainly the taxpayers.

Martin O'Malley must govern some other state I don't live in

So Governor O'Malley unleashed his State of the State address (and you can even listen to it, if you really are in to self-flagellation) on an unsuspecting populace today, and apparently the Governor is seeing things just a bit differently than the rest of us.

Let's review some "highlights":

But the future of our State is very much determined by the strength and the security of the families of Maryland – the hard-working and loving families that we have the honor and responsibility to represent. And today, the vast majority of Maryland’s families, like families throughout our country, are finding it harder and harder just to pay their bills and maintain the quality of life that they have worked so hard to achieve.

The Governor is absolutely right. We need somebody who is going to make sure that taxes are not raised on the Middle Class, and that somebody is standing up for those who are subjected to ever rising energy costs. I just only wish that this imaginary person were Governor, instead of Governor O'Malley, who continues to do what he can to make it tougher and tougher for families to survive in our state. It is stunning that he can say this without snickering, given the financial harm he has inflicted upon the middle and working class people of our state.

Continuing....

For the sad truth of our shared reality is that over the last seven years, real wages in our country have grown by only 1 percent. And unfortunately, the same cannot be said for everything else a family needs to survive.

Over the last seven years, the price of a gallon of milk is up 30 percent, the cost of a loaf of bread is up 20 percent, and yet real wages have increased by just 1 percent.

The cost of a gallon of gasoline is up almost 100 percent over that same time-frame.

And the cost of health insurance is up 78 percent, and yet real wages have by only 1 percent.

Yes, and the State of Maryland was nice enough to drive the cost of the sales tax up in this state by 20-percent and also raise the cost of income taxes as well. So realistically, that makes Martin O'Malley a key part of the problem and not part of the solution.

But we don’t need those numbers and figures to tell us that people are hurting; we see it in their eyes, we hear it in their voices.

And I see it in my bank account, with the numbers and figures tell me how much money Martin O'Malley is responsible for taking from me.

No wonder many of us are frustrated when – in the midst of this national economic downturn – we were also forced to confront a long neglected and huge structural deficit. The frustration is totally understandable. And there is good reason for all of us to be concerned and worried about our economic future.

But, as we have seen, Governor O'Malley has done anything to actual address the structural deficit. All Governor O'Malley did was ensure that the middle and working class families suffered financially, while making minimal cuts to the budget while still making sure that pet projects are funded at impractical and unaffordable spending levels.

Apparently, O'Malley has also established priorities for the state as well:

• To strengthen and protect our middle class, our family owned businesses and family farms,
• To protect our commitment to improve public safety and public education in every single part of our State,
• And to protect opportunity – the opportunity to learn, to earn, to enjoy the health of the people we love, as well as the health of the land, the water, the air and the Bay that we love – for more people rather than fewer.

Is this a joke? Is he serious? Because I'm not sure that anybody is doing less to address these priorities than Martin O'Malley. Families, businesses, and farms have been weakened by O'Malley's reckless spending and tax priorities. How is public education being improved given O'Malley's personal vendetta against Nancy Grasmick, focusing more on removing her than taking real steps to improving our schools? How are the people of Maryland having greater opportunities to learn and earn in these O'Malley years?

It continues to go on like this:

In the coming weeks, months and years ahead, we will be undertaking a number of efforts – legislative, regulatory -- and legal if need be -- to secure fair and reasonable energy rates while also ensuring an adequate supply for our future. Deregulation has failed us in Maryland and we cannot allow our future to be determined by that mistake.

And isn't it something that this gem is contained in a speech the same day that we get reports of higher electric rates?

Now, let's wrap it up towards the closing statements:

Let’s stay focused on the fact that people are counting on us to make these tough times more bearable. Let’s work together – regardless of personality, party or place – to face the challenges ahead.

What tough economic times call for is leadership. Leadership that is responsible to the needs of the people and the needs of the citizenry. What the people need is lower taxes. What the people need is a government that spends within its means. What we need is leadership that will in fact face the challenges without regard to personalities or party. Unfortunately, we currently have a Governor that governs on the basis of his partisan stripes, his desire for revenge, base jealousy, and the greed of personal power. This Governor is the antithesis of what he calls for in his own speech.

We know that Maryland is a stronger state than most. We can get through these tough economic times more quickly than other parts of our country, but only if we can continue to come together to protect the priorities that make us strong.

And again, what we have here is a Governor that is not committed to real priorities that benefit Maryland's working and middle class families. We have a Governor who is committed first and foremost to putting politics before people, and in governing only to benefit his party and his political career.

This Governor's State of the State address is a hubristic nightmare that can only come from the mouth of somebody who believes more in his press clippings, self-genuflection, and his own greatness than he does in doing what is best for the people of Maryland. While the people of Maryland suffer through an impending recession and higher taxes, O'Malley tries to takes steps to improve his political standing, and to continue to implement his O'Malleynomics on our state, with potentially disastrous (yet strikingly obvious) future consequences.

It is sad and depressing to think that middle and working class families of Maryland have to suffer through another three years of Martin O'Malley's reckless mismanagement and misplaced policy priorities.

Shocking Developments

Looks like Governor O'Malley is going to fulfill his campaign promise to protect consumers from a massive BGE rate hike by allowing a massive BGE rate hike:

Baltimore Gas & Electric's residential customers will pay an estimated 5.5 percent more for electricity starting in June, largely as a result of federal rules that are driving wholesale energy prices higher, state officials and industry experts said yesterday.

The increase will add about $100 to the average customer's annual utility bill, although the amount will vary depending on usage, the state Public Service Commission said. When combined with increases imposed since rate caps expired in 2006, BGE customers will be paying 85 percent more for electricity than they were before the General Assembly approved deregulation in 1999.

News of the higher prices follows a complaint the PSC filed last week with the Federal Energy Regulatory Commission, blaming outdated wholesale market rules for handing windfall profits to certain Maryland power generators. A different set of FERC- approved rules contributed to the latest price increase, the PSC staff said. Both sets of rules and other factors driving wholesale electric prices higher are at the heart of the PSC's current drive to bring utility rates down.

No word yet on how the O'Malley Administration is going to blame the rate hike on Bob Ehrlich or President Bush. But I presume that this is just another phase of the roll-out of O'Malleynomics across our state.

Is there any campaign promise that Martin O'Malley plans to live up to?

The Canary in the Coal Mine

You know that Maryland's Democratic leadership has made some poor choices on taxes and spending when one of their own starts warning that they may have sent the state economy into bad water:

Maryland Comptroller Peter Franchot (D) offered a bleak assessment of the state's economy yesterday, saying recent changes to the state's tax laws could negatively affect an already dire financial outlook.

Delivering Maryland's first State of the Treasury speech in recent history, Franchot, who considers himself the state's chief fiscal officer, said the subprime mortgage crisis, instability in financial markets and declining retail sales are driving the economy into "a period of profound uncertainty."

The full speech is available from the Comptroller's website. And true to form (and my opinion that Franchot is preparing a 2010 primary challenge to Governor O'Malley), the Comptroller railed against the tax package:

Furthermore, I believe that we must acknowledge that the sweeping changes to Maryland’s tax laws – which resulted from last Fall’s Special Session – have only added to this climate of unpredictability. As you know, I publicly objected to the idea of writing complex tax legislation in a frenetic and overheated political environment. Significant tax increases were essentially drafted behind closed doors and adopted without the benefit of substantive analysis, meaningful public hearings or consultation with stakeholders. And while I commend Governor O’Malley and the General Assembly for their shared commitment to resolving Maryland’s structural deficit, I remain deeply concerned about the potential of some of these tax measures to inflict harm on our State’s economy.

I am particularly troubled by the expansion of the Maryland sales tax to computer services. I spoke out in public opposition to this proposal when it was rammed through during the closing days of the Special Session, and I feel the same way today. This technology tax tax, if allowed to stand, will erode Maryland’s competitive advantage in the Knowledge-based economy.

What Franchot's endgame with his criticism of O'Malley and General Assembly leadership is anyone's guess. But it is significant that somebody who is probably to the left of just about every major elected official in the state of Maryland is being critical of O'Malley, the General Assembly, and the way business was conducted during the Special Session speaks volumes of how bad things are in our state. Politically, Franchot would have been expected to be on board with the historic tax hikes that we saw, but instead even he is concerned with the way everything went down.

Is this another salvo in an O'Malley v. Franchot gubernatorial primary? There is a long way to go before we can speculate too much about that. But it says a lot as to why O'Malley's poll numbers are sinking when ever those who are generally philosophically in league with where he wants to take our state can't support his tactics and methods...

The Sun doesn't learn

The Sun carries the flag again for Governor O'Malley today on the budget issue:

True to his word, Gov. Martin O'Malley yesterday unveiled his plan to keep a lid on overall state spending next year. Even his Republican critics will have to concede that while he may have recently raised taxes, he's not exactly a big spender, at least not in fiscal 2009.

Not only does Mr. O'Malley's proposed $31.5 billion budget fall well within the state's long-standing affordability guidelines, but it also reflects the smallest year-to-year increase in five years. And it does so by broadly reducing the growth of spending, including eliminating tens of millions of dollars in Thornton aid that was due to local school systems in the coming year.

Now, of course, the Sun thinks that this is a good thing

The 4 percent budget increase reflects the unpleasant reality of last year's tax increases - most of it was needed just to keep vital services such as education, transportation, health and public safety at existing levels, not to expand them.

Of course all of us on both sides of the aisle realize that current spending in those core issues need to be adjusted for the rate of inflation.

However, what about the Governor's discretionary spending? What cuts were made, other than 500 jobs that are being eliminated? Other than Sellinger formula money, what other spending levels were held in check as compared to the FY 2008 budget? If discretionary spending remains high, how can O'Malley say that we are in bad fiscal shape?

When you get down to it, the budget is four percent higher than it was last year. Which makes you wonder how anybody could objectively say that the massive historic tax hikes O'Malley and the Democrats just rammed down are thoughts were ever necessary at all.....

The opposite of a surprise

The Sun does as expected; genuflecting on the awesomeness of Martin O'Malley;

Mr. O'Malley suffered the political misfortune of being the guy to set the books right. Maryland residents are belatedly paying the still-reasonable price for the government spending they wanted (and the state needed).

Setting the books right is only political misfortune if you decide that taxpayers need to spend more money to finance irresponsible, profligate spending. Let's face it; the price of living in Maryland is far from reasonable, and that price continues to get less reasonable as Governor O'Malley decides Marylanders are not entitled to the fruits of their labor. And I'm pretty sure that few Marylanders believe that O'Malley's energy plan or O'Malley's mortgage plan are affordable or desirable. And O'Malley's recent tuition freeze plan is trying to put off today what students will pay in tuition hikes tomorrow, as there is no offset in spending proposed to make the tuition freeze affordable.

Maryland under O'Malleynomics is not affordable, and will continue to get less affordable for middle class and working families as it gets put into practice. No matter how much lipstick the Sun puts on this pig...