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Archive for the ‘O’Malley’ Category

There’s Something Going On

Posted by Jim Walsh on Thursday, September 16, 2010

The past 36 hours or so (i.e., since the night of the primary election) have convinced me that there is a seismic shift going on politically the likes of which I’ve never seen before.

First, an anecdotal observation. This morning I drove from home (in Woodbine) to meet a client at Leisure World (a large age-restricted development in Silver Spring). On the way down Georgia Avenue, and then across Norbeck Road heading back to my office in Columbia, I noticed a handful of Ehrlich signs here and there. But I did not see a single O’Malley sign in my travels to and from Montgomery County, which is one of the bluest counties in this most blue of states. Even driving through the liberal hotbed that is Columbia, I see a roughly even split of O’Malley and Ehrlich signs. This is only anecdotal, but I am convinced that there is practically no enthusiasm this year for O’Malley.

Second, this morning I read that the latest poll done in the Ohio governor’s race has John Kasich (R) up 17 points over Ted Strickland (D). For those of you not familiar with the politics of my home state, the stunning thing about this poll is that Strickland is the INCUMBENT who was leading Kasich by 5 points in the polls in late June. Strickland is not mired in any scandal, and he has not made any significant campaign gaffe. The worst thing that Strickland has done so far in this campaign is a YouTube video clip showing him in a Howard Dean type tirade about how Republicans hate America. But that clip was not major news and the tirade occurred only about 10 days ago, when Strickland was already trailing badly in the polls. Across the Great Lakes states, it looks like governorships of Michigan, Pennsylvania, Ohio and Illinois are going to flip from Democratic to Republican.

Third, Christine O’Donnell defeated ex-Governor and current Congressman Mike Castle in the Delaware primary for the Senate seat previously held by VP Joe Biden. Normally an insurgent can beat a party favorite only when there is an very low turnout in the primary, and the insurgent’s villagers with torches and pitchforks are the only ones who show up at the polls. What was especially interesting about O’Donnell’s victory is that the turnout in Delaware was three times the average primary turnout.

All the pundits immediately said that the Delaware voters were crazy and the Republicans had just lost their chance at picking up that Senate seat, and hurt their chances to gain the majority in the Senate, citing polls showing Democratic nominee (New Castle County executive) Chris Coons with a 16 point lead over O’Donnell. Karl Rove promptly bashed O’Donnell for her past financial problems and quirks. Even before O’Donnell concluded her victory speech Tuesday night, the Republican Senatorial Committee said it would not be supporting her in the general election. Castle, in his concession speech, did not congratulate O’Donnell or even mention her by name (reminiscent of Maryland’s own sore loser Wayne Gilchrest in 2008). Why the outrage at O’Donnell, particularly from Republicans? What happened to Ronald Reagan’s 11th Commandment “Thou shalt not speak ill of a fellow Republican.”?

Some Republicans dislike the Tea Party movement for its impact on the Delaware, and Alaska, and Nevada primaries. They like the enthusiasm that the Tea Party has generated for conservative candidates, but resent those same Tea Party-ers for upsetting the apple cart for some party insiders. Those Republicans are trying to have their cake and eat it too. You can’t expect a group to be enthusiastic about the political process unless that group can have an impact.

There were online reports that Karl Rove was working behind the scenes for the Castle campaign, so maybe he was just ticked off that his horse got beat. Even so, Rove is a political professional and his blast was a head scratcher. For those fans of conspiracy theories, I read one comment suggesting that Rove had done O’Donnell a huge favor. Now she was the underdog again, berated and dismissed by fellow Republicans. She was immediately transformed from a kooky fringe candidate to a sympathetic rallying point for conservatives across the country. On the day after the primary election, O’Donnell collected $750,000 in donations. By noon Thursday, she was up to $1,000,000. At the very least, she will have enough money to range a credible campaign, and the Democrats will still have to spend a significant amount of money in Delaware that they could have used elsewhere. Two days after the election, Coons’ lead over O’Donnell was down to 11 points. Now Delaware may be a blue state, but Chris Coons is no Joe Biden. He does not engender enthusiastic support. I think the momentum is shifting back to O’Donnell. I fully expect that any poll done the week of 9/19 will have her down by no more than 8 points. At the very least, O’Donnell is still going to make a race of it.

Let me try to connect some dots.
(1) There is no enthusiasm among Democrats.
(2) Republicans and independents are more likely to vote this year and they are angry. Ohio is the ultimate swing state, going back and forth between Republicans and Democrats. If an incumbent Ohio governor with no scandal or major gaffe is down 17 points, I’m extrapolating that Republicans have maybe a 12-15 point advantage over their base line of support this year.
(3) Christine O’Donnell is attracting money and support at an unprecedented rate.

Now let me go far out on a limb and make some predictions:
(1) Republicans take the House.
(2) Republicans take the Senate.
(3) Christine O’Donnell wins.


Posted in Democrats, Ehrlich, Jim Walsh, O'Malley, Republicans | 3 Comments »

Where did Maryland’s Millionaires Go?

Posted by David Keelan on Tuesday, May 26, 2009

Millionaires Go Missing
The Wall Street Journal Reports

Maryland’s fleeced taxpayers fight back

Here’s a two-minute drill in soak-the-rich economics:

Maryland couldn’t balance its budget last year, so the state tried to close the shortfall by fleecing the wealthy. Politicians in Annapolis created a millionaire tax bracket, raising the top marginal income-tax rate to 6.25%. And because cities such as Baltimore and Bethesda also impose income taxes, the state-local tax rate can go as high as 9.45%. Governor Martin O’Malley, a dedicated class warrior, declared that these richest 0.3% of filers were “willing and able to pay their fair share.” The Baltimore Sun predicted the rich would “grin and bear it.”

One year later, nobody’s grinning. One-third of the millionaires have disappeared from Maryland tax rolls. In 2008 roughly 3,000 million-dollar income tax returns were filed by the end of April. This year there were 2,000, which the state comptroller’s office concedes is a “substantial decline.” On those missing returns, the government collects 6.25% of nothing. Instead of the state coffers gaining the extra $106 million the politicians predicted, millionaires paid $100 million less in taxes than they did last year — even at higher rates.

No doubt the majority of that loss in millionaire filings results from the recession. However, this is one reason that depending on the rich to finance government is so ill-advised: Progressive tax rates create mountains of cash during good times that vanish during recessions. For evidence, consult California, New York and New Jersey (see here).

The Maryland state revenue office says it’s “way too early” to tell how many millionaires moved out of the state when the tax rates rose. But no one disputes that some rich filers did leave. It’s easier than the redistributionists think. Christopher Summers, president of the Maryland Public Policy Institute, notes: “Marylanders with high incomes typically own second homes in tax friendlier states like Florida, Delaware, South Carolina and Virginia. So it’s easy for them to change their residency.”

All of this means that the burden of paying for bloated government in Annapolis will fall on the middle class. Thanks to the futility of soaking the rich, these working families will now pay Mr. O’Malley’s “fair share.”

Posted in Democrats, General, Maryland, O'Malley | 1 Comment »

$1.7 B MD Structural deficit replaced with $2 B shortfall?

Posted by Ed C on Sunday, January 25, 2009

Gov. O’Malley has released his 2010 budget (2010 Maryland Budget Highlights) that increases state spending by at least $709 million dollars.   We were told in 2007 that Maryland had a $1.7 billion structural deficit that would be fixed by increasing taxes and having slot machines.  Now, we are told that we face a $2 billion dollar deficit, even after making painful cuts

Just as our families face the very real challenge of doing more with less, so too must those of us in government.  By necessity, the budget we are presenting today is unprecedentedly lean. It closes our projected $2 billion shortfall for fiscal year 2010 at a time when we’ve already enacted $2.2 billion in painful spending reductions. In addition, it eliminates hundreds of State positions on top of the 1,500 jobs we’ve already eliminated.

Spending reductions? From the same report  (in millions):

  • 2008   29,569
  • 2009  30,853
  • 2010  31,562 (proposed)

So where is the 2.2 billion in reductions?  Spending from 2009 to 2010 is proposed to increase by $709 million and $1,993 million since 2008.

According to the Spending Affordability Committee 2008 Interim Report released in December, the state of Maryland had 81,582 positions in 2008 and this was reduced to 81,247 positions in 2009.  A reduction of 335 positions (0.41%).  But wait:

Despite the decline in the number of authorized positions, the committee notes that, exclusive of higher education, there are currently more than 3,340 vacant Executive Branch positions, approximately 523 of which are funded, in the 2009 budget.  The higher number of funded vacant positions suggests that many additional workforce needs may be addressed through full utilization and reallocation of existing resources.

Are the “hundreds” of positions Gov. O’Malley claims will be eliminated really just not filling these 543 funded positions? The SAC recommends a position cap of 80,247, which if my math is correct would still enable the state to add 2340 employees.

Adding 2K+ employees is not a cut.  Adding more than $700 million in spending is not a reduction.

If you have ever wondered how we’ve gotten into this mess, a  good history of the State budget system and the Spending Affordability Committee was released by the Cecilia Januszkiewicz and the Free State Foundation in December, Structural Solutions for Maryland’s Structural Deficit: Pathways to Reform, but this may be a topic for a future post.

Posted in Budget, Ed C, Maryland, O'Malley | Leave a Comment »

Republican TaxInUs Maximus Rally – Saturday 4/12 11:45 AM – 2:00 PM

Posted by Ed C on Thursday, April 10, 2008

Unhappy with Gov. O’Malley, the Special Session and the General Assembly?

The Howard County Republican Club is holding a rally April 12th (Saturday) at 5550 Sterrett Place (Across from the Columbia Mall, near the Exxon station.) to celebrate TaxInUs Maximus Day. Stop by and show you support and you can receive either of the bumper stickers (shown below) to let the Governor and the General Assembly know your feelings.

You can also get more information or a bumper sticker from the Howard County Republican Club if you can’t make Saturday.

You can watch Tom D’Asto’s appearance on Fox 45 Tuesday morning here.

Posted in General Assembly, O'Malley, Taxes | Leave a Comment »

Stop It – You’re Killing Me

Posted by Jim Walsh on Monday, March 31, 2008

Oh those Maryland Democrats, they make me laugh harder than Jim Carey, Robin Williams and Leslie Nielsen combined.

A couple of weeks ago, while trying to justify large raises for top bureaucrats, Gov. O’Malley compared Maryland state government to a large publicly-traded corporation that needed expertise in a variety of fields.  The publicly-traded corporation most comparable to Maryland would have to be Enron.  Then last week – stop me if you’ve heard this one – MOM announced that the settlement hammered out with BGE was the best that could be obtained because the costs of energy were going up and the state was powerless (no pun intended) to stop it.  I could just hear his smirk over the radio as he recalled what he said during the 2006 campaign.

And yesterday I’m reading a pompous article in the Baltimore Sun & Fish-Wrapper about the effectiveness of the liquor lobby and about how evil those people are:  “‘It’s enormously frustrating,’ Del. William A. Bronrott, a Montgomery County Democrat who supports raising alcohol taxes, said of the industry’s power. ‘We’re talking pure greed versus the public interest.'”  Is this guy as funny as he intends to be? Isn’t it pure greed on the state’s part to grab as much revenue as it can from whatever source doesn’t squawk loud enough (e.g., the IT industry)? I guess letting people keep some of their own money isn’t really in the public interest.  As long as the state gets the money he doesn’t see the irony of his statement.  It really must be fun to live in your own fantasy world where the normal rules of economics don’t apply, and the MSM nods in agreement.

Posted in Democrats, Jim Walsh, Maryland, O'Malley | 2 Comments »

How does increasing spending an additional $1.7B close a $1.7B budget gap?

Posted by Ed C on Sunday, January 20, 2008

Okay, I am confused. One thing is certain, the MD state budget is increasing. But how much? Well, it sorta depends on who you want to believe. According to Gov. O’Malley and the Baltimore Sun (Governor proposes lean operating budget) the budget is increasing 4%, but according to the Examiner (The truth behind budget numbers) and the state budget highlights (pdf – page 7) the budget is increasing 5.9%.

According to the official MD budget highlights, MD state spending in FY08 will be $29,788M and the projected FY09 spending is $31,546M an increase of $1,758M (5.9%). So we “had” to have an emergency session to raise an estimated $1.4B immediately – so that we could send $1.7B more? (see also the Examiner Editorial: The emergency that never was)

Maybe the debate on how to spend $50M in new bay clean-up funds (Baltimore Sun: Debate continues over use of new bay fund) is illustrative of the problem we have with our state funding as a whole.

The O’Malley administration wants to use its computerized “BayStat” system to determine how to spend a new $50 million Chesapeake Bay cleanup fund, a top official said yesterday.

“We want to be able to refocus funds from programs that aren’t working to those that are,” Natural Resources Secretary John R. Griffin told a Senate committee. “That’s another touchstone of BayStat: rigorous performance review,” he said.

But some lawmakers have other ideas about how the money should be spent, with House leaders wanting percentages for agricultural runoff prevention and other programs and some senators asking for accountability to make sure the money would actually reduce pollution.

Why would accountability even be an issue? One would hope that as Annapolis spends our money that they have some notion of where it is going and how effectively it is being used. Does it not make more sense to develop programs and rank them according to their effectiveness and cost and then allocate funds from the budget? Starting with $50M figure in mind, somehow I’ll bet that they spend every penny no matter what it is used for or how effectively.

What if the most effective programs only cost $47M, do you think they would return that $3M to the state treasury? So what’s a measly $3 million? Well, the $50M allocated for the new Bay Restoration fund only represents 0.16% of the state budget. But, saving $3M from a $50M is 6%. If they we able to “find” similar savings across the entire budget they could save $1.8B, the entire proposed increase and all without the $1.4B in tax increases just past.

Could they have held spending at the FY08 levels? Could they find 6% saving across the entire FY09 budget? Maybe not, but starting with the assumption that they need to spend every dollar of the $31.B revenue that the state is expected collect from Maryland taxpayers in FY09 is sure not a way to get there.

Posted in Budget, Ed C, Maryland, O'Malley | 1 Comment »

There’s Something Happening Here…

Posted by David Keelan on Monday, January 14, 2008

What it is ain’t exactly clear…

Maybe it is.  According to the Baltimore Sun “O’Malley’s approval rating plummets“.  Really?  “…only 35 percent of voters approve of the way he’s handled his job.”  The silver lining is that 48% of voters like him.  Well, of course that is important – isn’t it. 

O’Malley may be what he is but he isn’t stupid.  He raised taxes now so we would forget about it by 2010.  However;

O’Malley – and any legislator who voted for the package – will have their work cut out for them in the next two and a half years if they want to reverse such abysmal numbers, said Raabe, the pollster.

One must wonder what message is in here for the County Executive’s considering the same course of action.  O’Malley hadn’t finished his first term and he raised $1.3B in taxes.  Robey jacked up Howard County taxes by 30% the first year of his second term.  Raising taxes in the second year of a first term won’t be easily forgotten by voters who are now expressing tax fatigue in “The FEE State”.

But turning the tide won’t be easy, especially among many of the “working families” O’Malley has most aggressively courted. Among those with who do not have a college degree, O’Malley’s approval ratings dip into the 20s.

They sound very angry and they should be.

Posted in David Keelan, O'Malley | 2 Comments »

Did Ken Ulman just move into a higher tax bracket?

Posted by Ed C on Sunday, December 2, 2007

Well, he will have if he files as an individual. As reported in the Baltimore Sun (2.9% pay raises for Ulman, council set to go into effect)

Ulman’s salary increases from $147,000 to $151,263, while the County Council members’ salaries rise from $49,000 to $50,421.

With the new O’Malley tax plan, if Mr. Ulman were to file as an individual he would find himself in the new tax bracket designed for the “semi-rich” and face the new rate of 5.5% for income over $150,000. The really rich, as defined by the Maryland democrats get the privilege of paying 5.75%. (Gov. O’Malley proposed a top rate of 6.5%)

Did the MD democrats index these new income tax brackets to inflation? Did they learn anything from the AMT? When originally passed in 1969, the AMT was designed to target 155 “high-income” households.

From Wikipedia:

Over the coming decade, a growing number of taxpayers will become liable for the AMT. In 2010, if nothing is changed, one in five taxpayers will have AMT liability and nearly every married taxpayer with income between $100,000 and $500,000 will owe the alternative tax. Rather than affecting only high-income taxpayers who would otherwise pay no tax, the AMT has extended its reach to many upper-middle-income households. As an increasing number of taxpayers incur the AMT, pressures to reduce or eliminate the tax are likely to grow.

Just as the failure to demonstrate a little foresight with the AMT, are we in a situation where those that think they are targeting only the “rich” will find that they also hit the “middle-class” over time?

But hey, don’t worry, we live in one of the wealthiest counties and states in America – We can afford it. (Especially if you’re an elected official with automatic, annual pay increases.)

Posted in Ed C, General, Howard County, Maryland, O'Malley, Taxes, Ulman | 5 Comments »

Reader / Writer

Posted by David Keelan on Tuesday, November 13, 2007

One of our readers sent a letter the editor regarding recent tax hikes.  The Baltimore Sun published it.  Thanks for sharing Tom.

Cuts should come before tax increases Read the rest of this entry »

Posted in General Assembly, Maryland, O'Malley | 2 Comments »

Home Equity

Posted by David Keelan on Thursday, November 8, 2007

Just a quick survey.

How many of our readers took out a home equity loan over the past few years? 

Apparently across the country a lot of people did so that they could live a lavish lifestyle, pay for an expensive wedding, a car, etc.  Others took a home equity loan for the new roof, or new windows, or some other improvement – investing in one’s home is good.  Although tempted to do so we never touched the equity in our home. 

Unfortunately, many who did, in order to finance a lifestyle rather than home improvements, find themselves owing more on their houses than they are worth.  Sound familiar – this is like the late 70s early 80s all over again.

This also has some undertones of what is going on in Annapolis now.  Living beyond our means.  Going to the well once to often.

I am wondering how many people in Howard County are like the man in this article.

He and his bride exchanged vows on the grounds of a sumptuous private estate in the Napa Valley. They spent their honeymoon at a resort in Tahiti.

He had a choice.  Don’t have such a grandiose wedding but

rather than scale back, he chose instead, like millions of homeowners across the country, to borrow against the soaring value of his home.

 Here is the beginning of the article

RENO, Nevada:As his wedding day approached last spring, Marshall Whittey found that his money could not keep pace with the grandiosity of his plans. But rather than scale back, he chose instead, like millions of homeowners across the country, to borrow against the soaring value of his home.

He and his bride, Holly Whittey, exchanged vows on the grounds of a sumptuous private estate in the Napa Valley. They spent their honeymoon at a resort in Tahiti.

But now, in an ominous portent for the national economy, Whittey has grown tight with his money. His home is worth far less than it was a year ago, and his equity has evaporated. And like many other involuntary adopters of a newly economical lifestyle, he can borrow no more.

“It used to be that if I wanted it, I’d just go and buy it and finance it,” Whittey, 33, said. “I’m feeling the crunch, and my spending is down significantly.” (kinda like the General Assembly).

This article from the International Herald Tribune is based upon a paper written by by James Kennedy, an economist, and Alan Greenspan (yes, that one).

Many experts are expecting a slow down in the economy because this type of borrowing and spending is slowing, yet the consumer spending is still growing at 3.9% last summer.  When will these lines cross?

If consumption does slow down enough to throw us into recession it is a good thing that the dollar is falling in value against other currencies in that we can generate a lot more revenue on our cheaper exports.  I don’t know if it would be enough to make up for the loss in consumer spending (the engine of our economy).  Clearly, our engine has been fed by easy credit.  Seems like we have been fed easy credit so we can spur the economy and now those lending the money may have ended up suffocating the engine with too much paper money.

Couple this with the average savings rate of Americans.  In 2006 we spent $42B more than we saved.  Yep, it is true.  Nearly 28 million U.S. households–37% of the total–do not own a retirement savings account of any kind and on average have only saved $25,000 per family for retirement.  Half of the households headed by a worker aged 55 to 59 have $10,000 or less in a 401(k) or in an IRA – they may have retirement plans (I don’t anymore). 11% of all Americans have retirement savings of $250,000 or more. In order to replace an income of $100,000, most retirees would need savings of $1.5 million – very few of us on on that trajectory.

This is scary stuff.  Any young workers out there reading this – now is the time to save.  You would not believe what $1,000 invested today would be worth in 30 or 40 years – $10,000 to $22,000, notice the $12,000 jump between 30 and 40 years?  The miracle of compound interest baby!  If you saved that $1,000 now and added $100 every month to it then the values look like this, an additional $10,400 to $26,000.  If you have a 401k or 403b that your employer will GIVE matching funds to then all the better.  Free money is the best gift one can get. This is just a rough sketch of expected returns. If one is 25 years old and single earning $35,000 per year and puts 10% away with your company matching part of that you would have $900,000 by the time you were 65 years old.

What is the solution for this 25 year old? Get married and double your income. Go back to school and get a better job. Save more and spend less (hear me Martin O’Malley). It is hard for a 25 year old to think this far out. Someone who is 35 years old might feel behind the eight ball and be demotivated to improve their circumstances. It doesn’t matter. I don’t know about you but I would rather be middle class and frugal than old and poor. How about you?

When the papers quote experts talking about the sub-prime mortgage mess (which looks to drag out much longer) I wonder how much of the problem is associated with home equity loans rather than mortgages.  How less of a problem would the credit crunch be if we saved more and took a longer term view of our financial position.

I wonder if the fact that other cultures that are so much older than ours have an easier time to think long term. According to this report their is no linkage.

U.S. workers save on average $696 a month for retirement, more than double the amount saved by workers in Germany, Italy and France, and nearly 10 times the amount saved by workers in China. Eight of 10 working Americans surveyed have already started saving for retirement.

Encouraging, but is it enough?  Any thoughts?

Posted in General, Maryland, O'Malley | 3 Comments »