Tax Policy: The Right Approach vs. The Right's Approach

Since tax increases are a vital part of Governor O'Malley's budget proposal, we're hearing all the predictable anti-tax grumbling that comes whenever our society talks taxes.

Ever since the political ascendancy of Ronald Reagan and his anti-tax philosophy, our nation has been on a collision course with disaster. For a generation now, the GOP has framed taxes not as the cost of getting things done, but as part of a war by the government against the people: Their refrain: "The government wants to take your hard-earned money and spend it themselves. But the American people know how to spend their money better than the government does."

But the government is the American people. Once we jettison that idea, we abandon the fundamental premise of representational democracy and label our federal, state, and local elected governments as illegitimate.

Over the next weeks, we in Maryland need to take a hard look at our state and local needs. There are a few million too many of us in Maryland to fit into a meeting place and efficiently do this ourselves, so we ask our elected delegates and senators act on our behalf.

And we ask them to approach the issue rationally. This requires answering two questions:

First: What do we, as a society, have as our priorities?
Only then can we ask the next question: How do we go about raising the funds to effect those priorities?

Notice that Republicans tend to switch the questions around. They ask first what we feel like paying, independent of what our actual needs and priorities are. After answering that question, they turn around and say we can't afford to fix Social Security, rescue Medicare, or provide health insurance to kids.

Whenever the issue of taxes comes up, Republicans reflexively complain that our taxes are too high. But they don't say how they've reached that conclusion. How can we determine that our taxes are too high if we haven't first determined what our needs are?

Do we want to fix our system public education system? Do we want to prevent our bridges and roads from decaying? Do we want to help older Marylanders get access to necessary medical care? Do we want to keep toxins out of the environment? Do we want to prevent victims of drug addiction in Baltimore from contracting HIV? (Sen. Mooney apparently offers up a big NO to that one, lovely man that he is).

We must first answer these questions before we can decide whether our taxes are at the appropriate level.

Over the past few months, the employees of the Department of Legislative Services in Annapolis have worked incredibly hard to come up with the costs and benefits associated with various state policies and programs. Before deciding how much I want to pay in taxes, I'm going to take a hard look at the numbers. And I'll be asking my senator and three delegates to do the same.

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Adam Pagnucco on the Budget: Part II

Adam Pagnucco of Crossing Georgia has been kind enough to share this detailed analysis of the budget. If you missed Part I, you can read it here.

Part Two: Is the Governor’s Plan Progressive or Regressive?

First, let’s finish looking at the remaining elements in the Governor’s proposal. Then we will be able to determine the plan’s relative reliance on progressive and regressive measures.

Corporate Income Tax

The Governor proposes to increase Maryland’s corporate income tax rate from 7% to 8%, raising $110 million in FY 2009. The new higher rate would still be lower than Pennsylvania (9.99%), the District (9.975%), New Jersey (9%), West Virginia (8.75%), and Delaware (8.7%), but higher than North Carolina (6.9%) and Virginia (6%). Given the facts that Maryland could easily raise its corporate income tax even more and still be close to most of its neighbors and that 66% of Post poll respondents approved of this hike, the state’s business community should be relieved that the increase is not larger.

Corporate Income Tax: Progressive, 7% of Package

Expansion of Sales Tax Base

Maryland’s sales tax does not apply to most services. According to the Federation of Tax Administrators, of 168 potential services to be taxed, Maryland taxes just 39. The District of Columbia taxes 70 and Virginia taxes 18. The Governor proposes to apply the sales tax to tanning salons, health club membership, massage services and real estate management, bringing in $74 million in FY 2009.

Because there are well over 100 types of services that would still be untaxed, there are vast opportunities for more revenue in this category. Jeffrey Birnbaum and Alan Murray’s brilliant book Showdown at Gucci Gulch (which should be required reading for all tax policy-makers) tells the story of how Congressman Dan Rostenkowski, Senator Bill Bradley and the Reagan Administration teamed up to lower marginal income tax rates by closing loopholes and exemptions in 1986. A similar approach to the sales tax might at least partially ameliorate a rate increase.

While real estate management might be passed on partly to renters, it is hard to say that the other services are used disproportionately by the poor. Overall, I assign this a neutral impact.

Expansion of Sales Tax: Neutral, 4% of Package

Property Tax and Sales Tax Relief

The Governor actually cuts two taxes in his proposal, losing revenues for the state. He proposes reducing the property tax rate by 3 cents per $100, costing $54 million in FY 2009 (and much more in later years). He also offers two sales tax-free weeks on clothes and two tax-free weekends on energy efficient appliances, costing $13 million per year.

The property tax decrease will disproportionately benefit people whose wealth is concentrated in their homes, many of whom are seniors or middle class. The tax-free periods will tend to benefit the poor and middle class. Since both measures cost the government money rather than raise it, I list them as offsets to the regressive features of the proposal.

Property Tax and Sales Tax Relief: Regressive Reduction of 4% of Package

Corporate Loopholes

The Governor would like to close two corporate loopholes. First, he would like to implement “combined reporting,” which would make it more difficult for corporations to reduce Maryland taxable income by assigning it to other states. Second, he would like to do away with commercial real estate owners’ use of shell companies to sell property without paying transfer taxes. Both measures are expected to raise a combined $36 million each year.

Corporate Loopholes: Progressive, 2% of Package

Slots

The Governor originally proposed a slots plan which he said would be loosely modeled on a bill passed by the House of Delegates in 2005, which would have authorized 9,500 machines. He estimated the plan would produce just $27 million of revenue in FY 2009 but would eventually bring in $550 million by FY 2012.

Opponents depict slots as regressive, alleging that poor people would gamble higher proportions of their income than the rich. Is it possible to have “progressive” gambling? Instead of relying on slots, the state could sell licenses for table games to luxury hotels requiring fifty dollar minimum bets. Wealthy gamblers could be seduced by endless champagne, sushi and Godiva chocolates. Some might even come in from Pennsylvania and Virginia which (so far) do not have table games. But such a proposal would fail because it would not generate as much revenue as the “one-armed bandits” and slots opponents tend to oppose all gambling, not just machines.

There is now a chance that the legislature will propose a slots referendum to be voted on next year rather than a slots bill. If that happens, there may be even more machines (perhaps 15,000) to compensate for the delay in the revenue stream. Sixty-eight percent of Post poll respondents supported slots, giving any referendum a fair chance of passage. If the referendum fails, state politicians may have to consider more taxes and/or cuts in 2009, something none of them wants to do so close to an election year. In any case, slots produce more money in out years than in the near term.

Slots: Regressive, 2% of Package (Rising to 24% of Package in FY 2012)

How Progressive is the Package?

Our calculations of the Governor’s deficit reduction proposal in FY 2009 are:

Amount in $ millions (Percentage)

Progressive Measures

Income Tax Restructuring: $162 (10%)
Corporate Income Tax Hike: 110 (7)
Closing Corporate Loopholes: 36 (2)

Total Progressive: $308 (18%)

Neutral Measures

Budget Cuts (non-education): $268 (16%)
Sales Tax Expansion: 74 (4)

Total Neutral: $342 (20%)

Regressive Measures

Sales Tax Hike: $730 (43%)
Tobacco Tax Hike: 170 (10)
Lower Education Spending Growth: 169 (10)
Slots: 27 (2)
Offsets for Property Tax,
Sales Tax Relief: -67 (-4)

Total Regressive: $1,029 (61%)

Total, All Measures: $1,679

The deficit reduction package is primarily regressive, principally because of its heavy reliance on the sales tax. The situation would be worse in FY 2012 as slots rise to 24% of the deficit reduction package, making it 70% regressive overall.

In Part Three, I propose an alternative revenue raiser that could be used to reduce the plan’s reliance on regressive solutions.

Adam Pagnucco is the Assistant to the General President of the United Brotherhood of Carpenters and has been employed in the labor movement since 1994. The views in this column are his alone and do not represent official statements from the union.

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Montgomery County Development Watch

The Montgomery County Council approved increasing fees on developers in two test votes yesterday:

In test votes on proposed revisions to the county's growth policy, designed to get a sense of the nine-member council, a majority supported increasing fees on new development to help cover the cost of more students and classrooms. For a public elementary school, for instance, the fee would increase from $12,500 to $19,514, far less than the $32,524 recommended by the Planning Board.

However, the Council was tightly divided over a proposed amendment allowing developers off the hook if they include more affordable housing:

"Adding significant costs will have remarkable implications, if not death-toll implications, for affordable housing," said council member Nancy Floreen (D-At Large), who was joined by George L. Leventhal (D-At Large), Michael Knapp (D-Upcounty) and Valerie Ervin (D-Silver Spring).

Council member Marc Elrich (D-At Large) criticized some of his colleagues' focus on moderately priced housing. "To hang this process around affordable housing is a joke. What this county does is next to nothing," he said.

The amendment was rejected by Elrich, Phil Andrews (D-Gaithersburg-Rockville), Roger Berliner (D-Potomac-Bethesda), Marilyn Praisner (D-Eastern County) and Duchy Trachtenberg (D-At Large).

My guess is this battle is just a preview for the critical fight over how traffic congestion is measured. In growth-policy speak, these are called the Local Area Transportation Review (LATR) and the Policy Area Mobility Review (PAMR). The Council won't take test votes on that until next Tuesday. Developers are clearly unhappy about those proposed changes as well, though residents have consistently expressed anger over the lax standards at public meetings on the topic.

The Action Committee for Transit (ACT) and Coalition for Smarter Growth sent out a press release (not posted to either website yet) opposing the proposed changes which would tighten the policy (read: inch these measures a tad closer to measuring the real level of traffic). Indeed, the press release made it quite clear that ACT wants to push the pedal to the metal on development around Metro stops, claiming that development does not increase traffic in those area, using Rosslyn and Ballston as examples.

I imagine many in the County would be surprised to learn that Bethesda and Silver Spring are not experiencing sufficient development or increases in density. In any case, this press release demonstrates the close alliance between ACT, the Coalition, and development interests. Moreover, failing to tighten the LATR would hardly combat sprawl as it would allow more development not just by Metro but everywhere in the County.

The press release also doesn't mention one key fact: both the existing and the proposed policy already allow for substantially higher congestion by Metro stops. Even if the LATR changes are approved, density will still continue to increase around Metro stops at a rapid pace. Indeed, people on the other side of the debate argue that the controls still don't measure the impact of development on congestion in a realistic manner.

The County did approve measures related to tighten school capacity requirements. Existing rules allow developers to build new homes even if the schools are full by borrowing school capacity from neighboring school districts. According to the Post, the Council approved tighter restrictions than recommended by the Planning Board but did not go as far as County Executive Leggett suggested.

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Special Session Roundup

The Washington Post reports on the many bills being introduced during the special session. Sen. Forehand (D-Montgomery) wants to: "increase the tax on alcoholic beverages from $1.50 to $3.50 a gallon for distilled spirits, from 40 cents to $1 a gallon for wine and from 9 to 25 cents a gallon for beer." Meanwhile, Alex Mooney (R-Frederick) seems determined to prove that he is every bit the stupid jerk claimed by his political opponents:

Meanwhile, Sen. Alexander X. Mooney (R-Frederick) is pushing to cut state funding of the AIDS prevention needle exchange program in Baltimore. "They say, 'You Republicans should come up with something to cut,' " Mooney said. "Here's something."

There you go, budget problem solved. Of course, the increased cost to the State in higher costs for care for AIDS patients will probably make this "cut" a net expenditure. But it shouldn't hurt the Moon Man's inevitable congressional run.

Sen. Barbara Frush (D-Prince George's) has proposed to eliminate the ICC. That bill has been referred to the Rules Committee which is a fancy way of saying sent away to die. Meanwhile, Gov. Martin O'Malley outlined how he plans to raise the money if slots doesn't pass:

O'Malley would shelve his plan to roll back the state property tax rate from 11.2 cents to 8.2 cents per $100 in assessed value.

About $300 million a year in dedicated school construction funding would not materialize. Nor would $60 million a year in dedicated funding to universities that could be used to hold down tuition costs.

O'Malley's proposal to expand access to health care would help fewer people, becoming a $100 million-a-year initiative rather than a $250 million-a-year initiative once fully phased in.

The Baltimore Sun ran a similar story on O'Malley's plans if slots aren't passed in addition to another story on a site being eyed by Baltimore City as a slots location. Meanwhile, Lt. Gov. Anthony Brown ties BRAC sweeteners to passing O'Malley's tax plan. The Annapolis Capital has a general story on the General Assembly's debate over O'Malley's plan.

In short, O'Malley and Brown are starting to put the screws to the legislature to get their budget plan passed. Whether or not you like the plan, this is a smart move by the Governor as nothing is going to happen unless he start pushing hard for it.

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Proposal to Change MCDCC Membership

Senator Nancy King and Delegate Charles Barkley (D-39) have sponsored a bill to change the composition of the Montgomery County Democratic Central Committee. MCDCC currently has 23 members with two elected from each of the eight state legislative districts within the county and the remaining seven elected at-large. The bill would expand the size of the MCDCC to 27 members with three elected from each of the eight state legislative districts and the remaining three elected at-large. The composition of the Republican Central Committee would be left unaltered--the same as the MCDCC before the change.

A hearing for the King-Barkley bill is scheduled currently for November 8th at 7pm in the third floor hearing room of the Stella Werner Council Building in Rockville. A hearing on Delegate Saqib Ali's bill to require open votes for filling state legislative vacancies (cosponsored Delegates Gutierrez, Heller, and Montgomery) is scheduled for November 15th for 7pm at the same location (see also the Gazette article). However, one can imagine that both hearings will be postponed due to the special session.

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Gaithersburg Endorsements

The Gazette has endorsed Cathy Drzyzgula, Jud Ashman, and Ryan Spiegel for Gaithersburg City Council. Meanwhile Progressive Maryland, SEIU's Local 400, UFCW's Local 1994, and the Coalition of Asian Pacific Americans have endorsed Ahmed Ali, Carlos Solis, and Ryan Spiegel (see flyer below).

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Adam Pagnucco on the Budget: Part I

Adam Pagnucco of Crossing Georgia has been kind enough to share this detailed analysis of the budget. It's well worth reading to the end.

Foreword

I produced this series in response to Senator Richard Madaleno’s budget briefing for a group of bloggers, including myself, on 10/29/07. While the mainstream media has churned out many articles on the drama of the state budget battle, speculating about Governor Martin O’Malley’s political fate and the relationship between the Senate President and the Speaker of the House, they have often overlooked more substantive issues. Senator Madaleno deserves high praise for his efforts to educate the blogosphere about the largest budget crisis to face the state in more than a decade.

Time now for a bit of disclosure. I have been a researcher in the labor movement for my entire adult career and write from that perspective. I am also a resident of Madaleno’s district and have contributed to his campaign fund in the past. That said, my conclusions are my own and do not reflect the views of Senator Madaleno, my union or the rest of the labor movement.

Part One of this series begins to outline the Governor’s proposal for eliminating the state’s budget deficit. Part Two finishes detailing the Governor’s proposal and examines its reliance on progressive and regressive measures. Part Three proposes an alternative for relieving some of the plan’s more regressive elements.

Part One: The Governor’s Plan to Eliminate Maryland’s Deficit

Upon taking office, Governor O’Malley inherited a structural state budget deficit. Simply put, the state was on track to spend $1.10 for every $1 in tax revenue for two principal reasons: a 10% income tax cut in 1997 and billions of additional spending on education (commonly called the Thornton Plan) started in 2002. The Governor balanced his fiscal year (FY) 2008 budget primarily by relying on reserves, but now faces a $1.7 billion general fund deficit in 2009. Unlike the free-spending federal government, the state is required to balance its budget.

Over the last couple months, the Governor proposed a budget reduction and revenue package totaling $1.679 billion to fix the deficit in FY 2009. He would also increase spending on education, transportation and health insurance by $328 million while drawing on left-over money from FY 2008 of $316 million. The Governor has now called a Special Session of the General Assembly to fix the deficit and his plan will be used as a starting point by the legislators.

Mainstream media coverage has reported on the items in the Governor’s proposal and the accompanying political tumult, but has largely omitted a very important question: is the proposal fair? For those of us on the left, fairness in tax policy is often defined in terms of whether taxes are “progressive” or “regressive.” Progressive taxes fall disproportionately on the wealthy. Examples include rising income tax rates at higher income brackets and taxes on capital gains, dividends and inheritances. Regressive taxes fall disproportionately on the poor. Examples include sales taxes and lotteries.

Progressivity is a paramount question for many people who voted for the Governor. Most left-wing activists worked very hard to elect him because they viewed him as caring much more about working-class economic interests than his predecessor. How does his deficit reduction package deliver for the Left’s priorities?

I investigate this question by examining each item in the Governor’s proposal and characterizing it as progressive, regressive or neutral. At the end, I add up the revenue in each of the three categories to determine their relative composition. Let’s look at what the Governor is proposing.

Sales Tax

The Governor proposes to raise Maryland’s sales tax from 5% to 6%. The new rate would equal that of Pennsylvania and West Virginia and exceed that of the District (5.75%) and Virginia (5%). The sales tax increase is by far the largest single element in the Governor’s plan, accounting for 43% of his package in FY 2009.

Sales taxes tend to be regressive since wealthier people generally devote less of their income to consumption than do poorer people. Maryland residents overwhelmingly disapprove of any increase – it drew only 29% support in a Washington Post poll released on 10/24/07. But the sales tax has three big virtues: it is simple to change, raises revenues immediately, and generates huge amounts of money. Those factors make the sales tax a budget component that may be impossible for legislators to resist.

Sales Tax: Regressive, 43% of Package

Budget Cuts

The Governor has proposed $437 million of budget reductions in FY 2009 but has supplied few details. The Washington Post reported on 9/28/07 that the Governor intended to realize $169 million in savings in FY 2009 by lowering increases in the state’s education spending formula. (He would still increase education spending by $119 million.) Because the education spending formula would provide for smaller increases, the state’s savings would grow larger each year. The remaining cuts, comprising $268 million, are unspecified.

Since poor people depend more heavily on public schools than the rich, reduced increases in education spending would be regressive. Without more detail, it is impossible to determine the impact of the remaining reductions. For now, I classify them as neutral.

Education: Regressive, 10% of Package

Remaining Cuts: Neutral, 16% of Package

Tobacco Taxes

The Governor would hike tobacco taxes by one dollar a pack, raising $170 million in FY 2009. At least part of the money would be dedicated to expanded health insurance. While there is ample justification for raising the tobacco tax – especially if the money is used for health care – it is a regressive tax. Interestingly, the additional revenues are projected to fall over time, leaving future revenue for health care an open question. Wide public approval (69% in the Post’s poll) guarantees passage.

Tobacco Tax: Regressive, 10% of Package

Income Tax

The Governor would add two higher-rate income brackets at $150,000 in income ($200,000 for couples) and $500,000 in income. At the same time, he would decrease the rates on the first $15,000 in income ($22,500 for couples), expand the earned income credit and increase the personal exemption for seniors. The net revenue increase would be $162 million in FY 2009.

A few Montgomery County politicians have questioned this restructuring, fearful that rich people would have an incentive to live in Virginia. But this measure is one of the most progressive features of the Governor’s plan and is favored by 62% of respondents to the Post’s poll.

Income Tax: Progressive, 10% of Package

In Part Two, I finish examining the Governor’s proposal and calculate its reliance on progressive and regressive measures.

Adam Pagnucco is the Assistant to the General President of the United Brotherhood of Carpenters and has been employed in the labor movement since 1994. The views in this column are his alone and do not represent official statements from the union.

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Gaithersburg Election

The big elections this year in Montgomery County are in Gaithersburg and Rockville. The Gazette recently reported on a forum for Gaithersburg City Council candidates, though another article reports a lack of buzz around the elections. The first article also revealed some of the local political alliances:

[Cathy] Drzyzgula and [Jud] Ashman are running on a slate. Ahmed Ali, Solis and Ryan Spiegel, who did not attend the debate, are not running on a slate but say they support each other.

The Gazette has published another article summarizing the positions of the seven Council candidates--only three can be elected. The Gazette is also doing their usual series of profiles which are linked below; I also attempt to summarize some (though by no means all) of their positions based on these articles. If anyone has further information which they wish to share, please chime in. Candidates and overview of issue positions:

Ahmed Ali
increase police force by 10% if budget allows it, against higher taxes, for keeping existing day laborer center, no relation to the other Ali in the race.

Shawn Ali
city needs to work on infrastructure to help decrease crime and improve the community, likes the Kentlands but also wants to see more urban renewal, city should enact legislation cracking down on employers hiring illegal immigrants but police should not enforce immigration law, Saqib Ali's cousin.

Jud Ashman
for speeding up Olde Towne revitalization, wants more open government, more police officers and community policy, support day-laborer center, watch development carefully and make sure they provide infrastructure.

Cathy Drzyzgula
for more open government and bigger police force, likes recent environmental initiatives, favors current day laborer site, rather cut budget than raise taxes, active in home preservation, supports better enforcement of development codes.

Wilson Faris
wants term limits, against day-laborer center, has a blog, strongly favors revitalization of Olde Towne, need to aggressively push county for higher standards for education.

Carlos Solis
for a larger and better funded police force, "never" will vote for new taxes, get revenue instead from development permits, anti-development but unfamiliar with Aventienne development, supports current day-laborer center.

Ryan Spiegel
toughen development standards to help address school overcrowding, for a bigger police force, city should consider borrowing funds to pay for new aquatic and recreation center, against raising taxes.

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Roundup on the Special Session

Everyone is talking about the special session, opened yesterday with a speech by Gov. Martin O'Malley to a joint session of the legislature.

The Washington Post and the Baltimore Sun both covered the opening session. The Post ran stories on the difficulty of analyzing bills in the speedy special session and the tough calls which will have to be made. Tax mavens may also be interested in the comparison to other states in terms of tax burden.

The Sun has a story on Republicans doing what Republicans do: protesting against tax increases without making any concrete proposals for what to cut in the budget. The Sun's columnists, including C. Fraser Smith, Jean Marbella, Susan Reimer (against slots), are also talking about the session.

The Gazette reports that Peter Franchot has found religion in the fight against slots. Columnist Blair Lee has a hard hitting column claiming that O'Malley's plan would rob Montgomery blind and is driving people and business out of the County and State. Barry Rascover and Laslo Boyd tries to forecast the outcome of the session.

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Black Family Alliance

According to the latest Washington Post poll, black Marylanders are more likely than white Marylanders to oppose same-sex marriage. The newly formed Maryland Black Family Alliance has decided to do something to change those numbers:

‘‘About three years ago, when same sex-marriage bans began proliferating the nation, a group of African Americans across the state began saying ‘enough is enough’ and the time is now,” said James, a Rockville resident who ran for the House of Delegates last year.

Same-sex couples argue that the state is denying their right to marry.

‘‘My boyfriend and I feel that we deserve all the rights and responsibilities of marriage,” said H. Alexander Robinson, executive director of the National Black Justice Coalition, a gay rights advocacy group in Washington.

The court’s ruling ended three cases consolidated in Conaway v. Deane, which involved nine Maryland couples.

‘‘When [the lawsuit] didn’t go the way we had hoped, we realized that people don’t quite understand still what we’re trying to do for our family,” said Mikki Mozelle, one of the plaintiffs. ‘‘So, if you can bring understanding to the black community, where there is a lot of division about this, this is a good way to sit down and discuss the issues.”

For supporters of same-sex marriage, this is an important effort. Liberal anti-discrimination initiatives don't pass the General Assembly without strong African-American support. African-American female legislators have been leaders in the gay rights fight in the state legislature--Sen. Gwendolyn Britt (D-Prince George's) plans to introduce a pro-gay marriage bill in the Senate this year. However, not all of her African-American colleagues feel similarly:

‘‘I’m against gay marriage through and through, no exception,” said Del. Emmett C. Burns Jr., a Baptist minister, who called the Black Family Alliance ‘‘a loose confederation of individuals talking loosely.”

‘‘Equating homosexuality and civil rights are not an equation as far as I’m concerned,” said Burns (D-Dist. 10) of Woodlawn, one of the General Assembly’s most vocal gay rights opponents. ‘‘Whites can hide their sexual preferences and still get all of the rights that society has to offer. I can’t hide my blackness and get the rights that I’m due, so to say that this is a civil rights issue upsets me to no end.”

Black support is crucial for another reason. Any gay marriage bill will almost certainly be petitioned to referendum by the religious right. African-American support is crucial to any effort to win the battle of public opinion key to winning the referendum.

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The Good News and the Bad News for the Gov

The latest Gonzales poll contains some good and bad news for Governor O'Malley. First the good news:

o 60% favor a special session to deal with the budget deficit; 37% think it is not needed.
o People really like the idea of voting on slots, 84% approve and only 12% disapprove of the idea.

Now, for the bad news:

o O'Malley's approval ratings are pretty anemic; 46% approve and 31% disapprove of the job he is doing as governor.
o Of those who disapprove, 61% blame his proposal to raise taxes.

More interesting factoids:

o O'Malley is far more popular among women than men; only 39% of men approve of the job he is doing compared to 53% of women.
o Western Maryland is the only region in which more disapprove of O'Malley than approve but his ratings in the critical Baltimore suburbs are only 40% approve, 27% disapprove.
o Majorities support O'Malley's proposal to raise income (58%) and corporate (59%) taxes but the income tax proposal is less popular in Montgomery even though the Washington suburbs approve of O'Malley strong than any other area besides Baltimore City.

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Giving False Purple Hope

The Coalition to Build the Inner Purple Line has correctly figured out that the Governor's budget plan for the next six years contains no money to build the Purple Line. The Coalition's recent newsletter calls on supporters (in boldface no less) to press legislators to up the gas tax to fund the Purple Line:

Enhancing the transportation funding package with a gasoline tax increase would ensure that those who use the roads share the burden of road maintenance, and at the same time would provide revenues needed to build the Purple Line.

Utterly false. Let's imagine that a gax tax increase brings in another $200 million. Thirty percent of that amount gets sent to the counties to spend on transportation. No county, including Montgomery, is going to give up its share anytime soon, so only $140 million is left for the State after the checks to the counties have been cut.

However, this money would not be spent on the Purple Line. For starters, the Baltimore Red Line is clearly at the front of the light rail train in the governor's mind and, more importantly, his budget. Second, other areas of the State have to receive their share of funding for projects in their area and the Montgomery-Prince George's share of the gas tax would not be sufficient to fund such a megaproject. Third, Montgomery County has designated numerous other transportation projects ahead of the Purple Line for funding.

So don't waste a tank of gas driving down to Annapolis to lobby for a gas tax increase in the hopes of seeing the Purple Line sooner. A gas tax increase may serve a variety of useful purposes as County Executive Ike Leggett has argued. But building the Purple Line won't be one of them.

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The Governor meets MoCo Activists; it's a draw

You gotta to love MoCo town meetings, if we think an officeholder can be influenced with mass political pressure we can rally the proletariat at the drop of a hat. It need not matter why that public official is there. It is our time to let them know about a range of issues. And that is exactly what happened last night when Governor O'Malley came to Takoma Park MS. He wanted to talk budget and he got more, much more than that.

What made this event stand out was just a mere 16 months ago, candidate O'Malley -- then locked in a close battle with MoCo Executive Doug Duncan for the Democratic nomination for Governor -- came to the very same site and Takoma Park embraced him in large part because he was not "Developer Doug". Fast forward to October 24, 2007, and the same crowd disagreed with a key component of his budget fix: slots (he's in favor and the audience was not) and with the key highway initiative for MoCo: the ICC (he's in favor and the audience was not). As a group, we eagerly hissed the Governor at the mere mention of slots as part of any budget proposal; we were genuinely disappointed with his position on the ICC. Heck the question was what makes he so much more different than Duncan or Ehrlich on roads.

Tame by Comparison
Still hissing was far tamer than what he has faced in the past. Back in 2000, as newly elected Mayor of Baltimore, Martin O'Malley encountered a hostile group of Baltimoreans who questioned the wisdom of replacing a local African American Police Chief with a white one from NYC, "New York City!?! get me a rope".

Back then O'Malley stood through six hours of having to prove he was not anti-black, last night the Governor need only sift through ninety minutes of questions on the evils of the ICC, housing atop the Takoma Metro, a push for paper ballots along with several other local issues. The only issue to not come up was about the Western Maryland Bear Hunt who had a dozen activists in the audience. Still to those who wanted to have a serious discussion of the structural deficit that will have to wait until the lawmakers reconvene on Monday in Annapolis; though a quarter of our MoCo delegation was in the audience taking this all in.

Prospects for the special session
I have queried about a dozen of our MoCo lawmakers and I have yet to find one who is for slots as part of the budget solution. And yet if slots are not part of the solution something else needs to give. I sure don't have the answer but the expectation game is so low for the Governor that any kind of a solution could be hailed as a victory.

Still why call a special session if you no deal in place. I guess we will now see if the Governor's Irish charm works outside of the Charm City.

So it is on to the next town meeting and another group of community activists and maybe a step closer to solving a budget mess that dates from the 1997 tax cuts and the passage of the Thornton Bill in 2002.

More Budget Talk
The Upcounty folks get a chance to talk about the budget this Sunday. Ok you don't get the Governor but you do get two Delegates and a former Sate Senator to outline some of the budget options.

The District 15, 17 and 39 Democratic Clubs are sponsoring a town meeting about the state budget options. Here are details:

Where
Casey Community Center, 810 S. Frederick Avenue, Gaithersburg 20877

When
Sunday, October 28, 2:30-4:00 pm (Doors open at 2 pm, program starts at 2:30 pm)

Who
Delegates Luiz Simmons (D-17) and Brian Feldman (D-15) will be joined by former Senator P.J. Hogan (D-39) to discuss the challenging issue of the forthcoming state budget.

More Information
Questions are invited and refreshments will be served. For more information contact Walt Sonneville at 301-869-4460 waltsonnevile@earthlink.net

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Take Back Bethesda!

The movement for a park at Woodmont East--the plot of land located between Mon Ami Gabi and Thyme Square at the corner Woodmont and Bethesda Aves.--has gone virtual at Take Back Bethesda! This plot of land is the last bit of open green space in what has become the heart of Bethesda.

If JBG and Federal Realty have their way, the County will abandon Reed St. and develop Woodmont East as a combined hotel, condo, and retail complex. The building would be fourteen stories tall in parts. If you want to see the proposed plans for yourself, you can find them on the Planning Board website though you have to go through a bit of a maze to get them:

http://mncppc.org/
Click on planning department under Montgomery (not Prince George's) County on the left side;
Click on development in the reddish "What's going on" box;
A new browser window will open, click on next in that window;
Enter project number of 920070070;
Click on search for related plans and reports;
Click on "select all" and then click on "search";
Click on the document labeled "11pages, Architecturals".

The development includes a plaza as open space as the public amenity which is required to justify the extra-high density of the project and get the Planning Board to approve it. However, opponents of the project argue that the plaza is being built on an existing easement and the developers cannot give to the County what it already has. Nor can the County accept as a public amenity property to which it already claims to have the rights. Additionally, the proposed building would cover much of the plaza starting on the third floor, making it less sunny and appealing.

According to Take Back Bethesda, the Greater Bethesda Chevy Chase, Edgemoor, and East Bethesda Citizens Associations have filed an application to have the area listed as Legacy Open Space so that the County could purchase and protect the area as a park. In any case, unlike many projects, this one will have to be approved by the County Council as well as the Planning Board.

Of course, one nice solution would be if the developers agreed to give a park to the County in the existing open area between Thyme Square and Mon Ami Gabi as the public amenity needed to justify optional method development. The money saved on lawyers and lobbying and and the gains in community goodwill might even make it worth it to project proponents.

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Franchot Attacks Special Session

Comptroller Peter Franchot attacked the special session called by Governor Martin O'Malley and his administration's proposals for balancing the budget in a letter to Senate President Mike Miller and House Speaker Mike Busch.

The strangest part of the letter is when Franchot says that there is no urgency on the question because the budget is balanced and can wait until the regular session. One might think the bond markets would like the State to get its fiscal house in order sooner rather than later.

My guess is that the relationship between the comptroller and the governor has turned from cold to icy. One wonders if it is too early to contemplate a primary challenge by Franchot against O'Malley. I don't think Democrats will necessarily appreciate Franchot working to undercut the governor so early in his term even if they agree with him on some of the issues.

Dear Friends,

As the Maryland General Assembly prepares to convene in a special legislative
session to discuss the Governor's slots and tax package, I wanted to share with
you a letter I sent today to the President of the Senate and the Speaker of the
House.  I hope you will take a minute to read through it and share your thoughts
with me on this extraordinary time in our State's history.

Peter Franchot
Comptroller


October 23, 2007

Honorable Thomas V. “Mike” Miller, Jr.
President, Senate of Maryland
State House
Annapolis, Maryland  21401

Honorable Michael E. Busch
Speaker, Maryland House of Delegates
State House
Annapolis, Maryland  21401

Dear President Miller and Speaker Busch:

As you know, Governor O’Malley has signed an Executive Order convening the
Maryland General Assembly to consider his proposed remedies for the State of
Maryland's $1.7 billion structural budget deficit.  The Governor's proposal
includes, but is not limited to, an increase in the State's sales tax, cigarette
tax and corporate income tax rates, an extension of the sales tax levy to
service transactions that are currently exempt, a fundamental realignment of our
State's personal income tax structure, and a plan to legalize slot machines in
Maryland.

Having served two decades in the General Assembly, including several years
as Chairman of a House budget subcommittee, I have been through similar fiscal
challenges and appreciate the Governor's desire to address our State's looming
budget shortfall in an aggressive manner.  As Maryland's chief fiscal officer,
however, I must question the timing and necessity of this approach.  Mindful of
the reservations each of you has expressed about a special session, I must
underscore the profound – and perhaps unintended – consequences of this
undertaking on Maryland’s economy, business climate and quality of life, and to
caution against acting in haste.


THE TIMING

The special session that will convene on October 29 will take place against
a backdrop of exceptional economic instability.  The collapse of the subprime
mortgage industry has effectively ended the most sustained housing boom of this
generation.  The recent, dramatic spike in foreclosures has created a national
surge in housing inventory just as stricter lending standards have compressed
the pool of potential buyers.  These well-documented national trends have also
been experienced in Maryland.  For example,

•       The foreclosure rate has increased by 57 percent in Maryland from the
first quarter of 2006 through the second quarter of 2007, compared to 41 percent
nationally;

•       The foreclosure rate for subprime Adjustable Rate Mortgages (ARMs) has
increased 200 percent in Maryland, compared to 115 percent nationally;

•       The median price of existing homes sold in Maryland declined by 0.6% in
August, compared to August 2006.  This was the second decline in just four
months, coming not long after 54 consecutive months of double-digit growth;

•       Existing home sales in August dropped by 25 percent compared to August
2006, and were 44 percent lower than 2004 and 2005 levels;

•       Today, Maryland’s housing inventory is at the highest levels of this
decade, and has increased threefold in just three years.

The collapse of the housing market, in turn, has inspired a ripple effect
throughout the entire U.S. economy.  Just last week, Federal Reserve Chairman
Ben Bernanke warned that the troubles in the housing market could be a
“significant drag” on the economy.

The Dow Jones Industrial Average and other U.S. financial markets are in the
midst of a period of high volatility.  Consumer confidence has plunged, as
evidenced locally by the sluggish growth in state sales tax receipts that led to
last month's $130 million writedown of FY 2008 revenues.  The dollar has dropped
to an all-time low against the Euro, compounding concerns of higher oil prices
and inflation.  The Labor Department reported last week that applications for
unemployment benefits are far exceeding expectations, raising concerns that the
housing collapse will finally destabilize the nation's job market.  As a result
of these and other, similar developments, many national economists have elevated
the odds that we will enter a period of recession.

It is in a spirit of concern over the general direction of our economy that
I have recommended a more cautious and deliberative approach to addressing
Maryland's structural budget deficit.  In recent weeks, I have suggested that
our December presentation of revenue estimates would offer a much clearer sense
of Maryland's long-term economic outlook, as well as the dependability of the
funding streams that the Governor is counting on in his package.  The
availability of this crucial data, coupled with traditional economic indicators
that are duly reported by the media, argues in favor of taking up the Governor's
proposal during the regular 90-day session.  The politics of the day might argue
in favor of a more dramatic gesture.  From a budgetary and fiscal standpoint,
however, the current state of affairs makes this special session – and its
purpose – a high-risk proposition.


THE NECESSITY

In recent weeks, the media has reported warnings from senior O'Malley
Administration officials that, without a special session, the State's structural
budget deficit will mushroom.  Please  allow me to take this opportunity to set
the record straight.  There is no relationship whatsoever between the timing of
the next General Assembly session and the magnitude of Maryland's structural
budget deficit.  As you know, the structural deficit is loosely defined as the
negative balance between the sum of the State's ongoing spending obligations and
its ongoing revenues.  Unless we are required to revise State revenue estimates
downward, or unless the State makes any unfunded spending commitments between
now and January (which is highly unlikely), the structural budget deficit will
remain at $1.7 billion.

At the risk of restating the obvious, it is also worth noting that through
June 30, 2008, the State of Maryland has a balanced budget.  That, too, is
irrespective of the timing or outcome of the next General Assembly session.  It
has been suggested, by key lawmakers from both parties, that it would be more
appropriate to take up the Governor's package during the regular legislative
session, where it can be considered within the context of his FY 2009 budget
proposal.  Aside from affirming the basic logic of considering new revenues,
spending commitments and budget cuts at the same time, I will further
substantiate this approach by restating that there are no permanent costs
associated with proceeding in that manner.


THE CONSEQUENCES

The Governor's revenue package includes the most dramatic reform of
Maryland's tax structure in well over a generation and, in slot machines, a
proven catalyst for a broad range of social and economic ills.  It would
directly affect all Maryland residents, workers and tourists, as well as every
small business and corporation that has chosen to invest in our state.  Mindful
of its enormous ramifications, I must note that Governor O'Malley's plan was
constructed in private, introduced gradually by press release, and the details
have yet to be made available.  This makes review and evaluation of the plan
next to impossible, and further risks actions being taken that may have
unintended consequences.

For example, according to press releases that have been made available by
the Governor’s office, the plan includes a proposal to extend the sales tax levy
to property management services.  Although the details on this particular
provision are unclear, concerns about its impact on the State’s affordable
housing stock have already been raised.  In meeting with citizens and business
leaders throughout Maryland, I have heard numerous complaints that the costs of
this tax will simply be "passed through" to renters, many of whom are families
with low and moderate incomes who cannot afford further strain on their fixed
budgets.  My intent is not to render a personal opinion on this specific piece
of the plan, or any others.  Rather, it is to underscore the importance of
sharing this plan with the public in open, inclusive and unscripted public
forums.  I am afraid that the current timetable allows virtually no opportunity
for such stakeholder input, which could ultimately diminish
public confidence in the process and result in a product that negatively impacts
the Maryland economy and the taxpayers we represent.


In my view, the volatility of the U.S. and Maryland economies, the absence
of an immediate fiscal “crisis” and the lack of detail about the plan could all
combine to create a perfect storm of unintended consequences.  Rather than act
in haste, the fiscally prudent and practically wise thing to do would be to move
cautiously and deliberatively throughout this process.

Should you have any questions, or if I can be of assistance to either of
you, please do not hesitate to call.  Thank you in advance for your
consideration of these points.

Sincerely,

Peter Franchot
Comptroller

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The Chamber v. The People

The Gazette reports that the Montgomery Chamber of Commerce has taken a position on the governor's tax proposal:

The chamber specifically opposes raising state income taxes on high-income payers, a ‘‘mandatory unitary tax” on corporate profits and expanding the sales tax to include more business services.

Everything else in O’Malley’s package, including raising the sales tax by 20 percent and legalizing slot machines at racetracks, should be considered by the legislature, said Lisa Fadden, the chamber’s vice president for public affairs.

Today, the Washington Post released a poll showing the opinion of Marylanders on various tax proposals floated by the O'Malley administration (click here to see the graph). According to the Post poll, 69% favor increasing the cigarette tax, 68% favor slots, 66% favor upping the corporate income tax, 62% favor raising the top income tax rates, and 57% favor extending the sales tax some additional services.

However, only 29% like the idea of increasing the state sales tax from 5 to 6%--the Montgomery Chamber's of Commerce preferred option. The Chamber has its reasons. Montgomery Chamber President and CEO Gigi Godwin told the Gazette that ". . . onerous new taxes on business will harm Maryland’s ability to compete globally”. Godwin has a point though she should focus more on interstate than international competition.

As I discussed previously, higher income tax rates could encourage very affluent taxpayers to plump for Virginia or DC over Maryland if our tax rates are significantly higher than these jurisdictions. According to a previous article in the Washington Post, the proposed top tax rate for higher earners of 10% in Maryland would exceed the top rate of 5.75% in Virginia and 8.5% in the District of Columbia.

McLean could start looking a lot more attractive than Potomac to someone who earns $5 million per year; they would pay $191,250 less in state income tax in Virginia than in Maryland on income over $500,000. My guess is that impact would be felt slowly as the increase would be more likely to influence where people new to the region settle than cause current Maryland residents to pick up and leave. However, the impact on revenues would grow stronger over time.

Income taxes could impact business indirectly. As Joel Garreau explained well in Edge City, when businesses move, they always move closer to the home of the CEO. If more CEOs live in Virginia, more business could go there as well. Of course, higher corporate tax rates would provide a nice business reason for the move.

The impact on affluent taxpayers has made increasing income tax rates somewhat less popular in Montgomery than elsewhere in Maryland. Even if you don't earn more than $150,000 and would not pay higher rates, it isn't hard to figure out than the vast majority (over 80%) of the money would be paid by people in Montgomery and most of it would not be coming back here. According to the Post, only 54 percent of people surveyed in Montgomery favored increasing income tax rates compared to 62% statewide.

Still, a majority of people in Montgomery appear to favor the increase, and my guess is that support is a lot higher in among the people who vote in the crucial Democratic primary. Legislators from solid Democratic districts (e.g. Districts 16, 17, 18, 19, and 20) would probably be safe voting for the increase even though several represent the most affluent voters in the state. Legislators from more marginal Montgomery districts (e.g. Districts 14, 15, and 39) may feel more intensely cross-pressured between their primary and general electorates.

Moreover, Maryland's wealth rests primarily not on a relatively flat state income tax level but the quality of education and infrastructure. We have never been regarded as a low tax state. However, the quality of services is far higher than many other places. In Montgomery, the quality of the school system is an obsession in which we can pride--I remember when I went to college and was floored to learn that people elsewhere actually vote down money for schools. An educated workforce is critical to the State's future continued success. What would the Chamber cut out of the budget?

The one place where the Chamber and the people appear to have a meeting of the minds is on slots, though support for the proposal in Montgomery and Prince George's is heavily conditioned on none of the machines being located here:

Almost two-thirds in Montgomery and 56 percent in Prince George's favor allowing slots as part of the effort to trim the budget gap. But that support would dip sharply if slots were allowed in their counties. Only about four in 10 Montgomery and Prince George's residents would support them in that case.

Although a vote for slots is widely viewed as a tough vote for Montgomery legislators, it may not play so badly with the people. Legislators in Montgomery may find it easier to vote for slots than other tax increases. Of course, it would be very interesting to have a survey of Democrats and Democratic activists and primary voters. My guess is that they are less supportive than the electorate as a whole.

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On Political Pulse

On Thursday, October 25th at 9 p.m. and Tuesday, October 30th at 9:30 p.m., MD Delegate Brian Feldman (Democrat from Potomac), who is the Chair of the 24 member Delegation from Montgomery County in the MD House of Delegates, and MD House of Delegates Minority Leader Tony O'Donnell (Republican from Calvert County) will debate the Special Session that will commence in Annapolis on October 29th on Governor Martin O'Malley's proposals to solve
the $1.7 Billion state budget deficit.

Political Pulse is on Channel 16 TV in Montgomery County.

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The People Who Really Matter

In passing, I've heard a bit about the massive fires which they're having in California. Has anyone else noticed that the coverage seems to focus ridiculously on the plight of celebrities? Is it possible to have a television story about the fires without covering the latest celebrity in Malibu whose home is threatened? I know Sting and now poor Jane Seymour may have lost homes but somehow I imagine that they will manage.

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Know Nothings in the 2008 Election

Americans often tout our country's diversity and how the ancestors of most Americans came here from somewhere else seeking a better life. When I was a kid, the Smithsonian hosted an exhibit called "A Nation of Nations" which sums us up about as well as our national motto of "E Pluribus Unum" or "One Out of Many."

On the other hand, Americans don't often tout our history of nativism which has a long if undistinguished pedigree. The anti-Catholic Know Nothings rode high in the 1850s, founding the ironically named "Native American Party". Former President Millard Fillmore carried Maryland on an anti-immigrant ticket in 1856. I guess the people forgot that the Colony of Maryland had been founded as a Catholic refuge and named for a Catholic Queen.

America is currently going through yet another of its cycles of high immigration followed by nativism. Although his presidential campaign is going nowhere fast, U.S. Rep. Tom Tancredo has managed nonetheless to attract a few headlines with his extreme anti-immigrant rhetoric:

"Look at what has happened to Miami. It has become a Third World country. You just pick it up and take it and move it someplace. You would never know you're in the United States of America. You would certainly say you're in a Third World country," Tancredo said.

Less widely reported is that Tancredo received a standing ovation at the Family Research Council so-called "Values Voters Summit" in DC this past weekend when he tried out the same line according to someone I know who attended. The right-wing National Review bloggers seemed to miss that particular sound bite though they discuss other glorious moments in Tancredo's speech here and here. Suffice it to say that it is a good thing Mary and Joseph didn't look for shelter in Tancredo's manger.

While Tancredo will not get far in his quest to be the next Millard Fillmore, the Washington Post reports that the desperate Republicans are likely to turn to anti-immigration as a theme in the 2008 elections. They've certainly done it before. Pete Wilson won reelection as governor of California in 1994 by running against illegal immigrants. His campaign commercials showed immigrants sneaking over the border with the voiceover saying "They keep coming and coming."

Pete Wilson won one more term but alienated Latinos permanently. The share of Latinos registering as Republicans dropped to near zero and California Latinos became a loyal Democratic voting bloc. In contrast, at the same time, the Republican governor of another state with a large Latino population reached out to Latinos and dramatically increased his share of the Latino vote. His name? George W. Bush.

Of course, as President, Bush did not choose to act on immigration under his popularity was in the toilet and he couldn't get immigration reform through Congress. Even so, Bush is positively progressive on the issue compared to many of his fellow partisans. My guess is that this is one aspect of the Bush legacy that Republicans will choose not to embrace.

Immigration doesn't just roil American politics. There were riots in the capital of Switzerland (yes, really) over this question during their recent election campaign. The Swiss People's Party has gradually risen from the fourth to first largest party in the land by combining opposition to the EU with opposition to immigration. Their election propaganda in the recent campaign showed three white sheep kicking a black sheep off of a Swiss flag.

Efforts to make it easier for people to naturalize have failed in Switzerland. In 2003, a major of Swiss voted against making it simpler for third-generation Swiss who resided legally in the country to gain Swiss citizenship. Over one-fifth of Swiss residents are not Swiss citizens so the high number of non-citizens remains a bit problem.

Perhaps we should be thankful that the 14th Amendment, which says that all people born in this country are citizens of the United States by right, prevents immigration from being a multi-generational nightmare here. While only a relatively slim majority of Latinos are citizens, over four-fifths of Latinos under age 18 are citizens. Latinos are also the fastest growing group of voters in the country. Republicans should consider that fact before they turn 2008 into our big immigrant bashing election.

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On Slots and Peace in Our Time

Gov. Martin O'Malley is making the case that the best way to end Maryland's long battle over slots is to call a "truce" and let the voters decide:

O'Malley has increasingly suggested that the best way to reach an accord on slots may be for the legislature, in effect, to agree not to resolve the issue -- and instead ask voters whether to welcome expanded gambling to Maryland. "We have beaten this dead horse into a coma, and we need to resolve this issue," he said. "It has been a monkey wrench in the workings of our democracy for the last five years."

A referendum, which would likely appear on the 2008 presidential ballot, would require legislative approval. It would require support from three-fifths of the House and Senate, a higher threshold than a bill directly legalizing slots.

But O'Malley has been trying, with at least some success, to persuade slots foes to support a referendum as a way to put the issue to rest.

"If there's an impasse over slot machines, a referendum may be the answer," said Sen. Thomas M. Middleton (D-Charles), who said he does not support expanded gambling. "I think it makes it easier for folks to say, 'All right, I'm opposed to slot machines, but I'm willing to let the voters decide.' "

It is a tempting idea. However, even this solution may be hard to achieve in the special session. After all, the Republicans have expressed their unwillingness to vote for slots as part of their overall determination to deny O'Malley a major success in a special session. Moreover, Sen. Rona Kramer accurately points out that the same problems which plague passing any slots bill will also undermine a slots referendum bill:

"It's not as simple as saying, 'We're going to put it on the ballot,' " said Sen. Rona E. Kramer (D), chairwoman of the Montgomery County Senate delegation. "How are we going to deal with the details? And the devil is in the details on this one."

Any slots referendum would have to decide the same key points which have inhibited agreement on this question. Getting a majority of both houses of the General Assembly to say yes to the idea of slots is doable. Agreement on a specific bill is far more difficult.

And why should slots opponents agree to a referendum? Polls suggest that slots could receive approval from the electorate. From their perspective, it is easier to kill slots in the General Assembly. Moreover, proponents have not shown any ability to enact a slots bill into law, even with heavyweight support from Senate President Mike Miller and the current and former governor.

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Bush's Allies Disappearing

British Prime Minister Tony Blair has already retired and been replaced by Gordon Brown who has been removing British troops from Iraq steadily but quietly in a calculated effort to withdraw with minimum impact on the much vaunted special relationship between the UK and the US.

Yesterday, Poles turned out the incumbent government in favor of a party which wants to withdraw troops from Iraq and work more closely with the EU. Incidentally, this move also ends Poland's interesting experiment in having identical twins hold the offices of President and Prime Minister simultaneously. The editorial in the Economist, hardly known for its far-left politics, may jar some on the right here:

Primitive politics, xenophobia, and high-handed attitudes to the niceties of democracy and the rule of law, have been shown to be electoral liabilities, not a surefire route to success.

Australia is expected to join the club next month. According to the Economist (subscription required for this one), Prime Minister John Howard's Liberals lag about 12-points behind Labour.

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Republican Purges Continue?

What the Club for Growth has led nationally, Bob Ehrlich is now following in Maryland.

The Club for Growth is right-wing organization dedicated primarily to defeating relatively moderate Republicans in primaries. Some of their more recent prominent efforts included supporting primary challenges to Pennsylvania Sen. Arlen Specter and Rhode Island Sen. Lincoln Chafee. While the Club for Growth has an ardor for tax cuts, they don't feel very strongly about child health care. Major recent priorities for the Club include permanent repeal of the estate tax and calling for Republicans to sustain President Bush's veto of SCHIP reauthorization.

Former Gov. Bob Ehrlich has decided to follow the Club's modus operandi and endorse Rep. Wayne Gilchrist's (R-Eastern Shore) primary opponent, state Sen. Andrew Harris:

This is not an easy race, incumbents have a lot of advantages," Ehrlich said. "Being a party-builder is part of the job description. ... When I talk about a team player, I'm talking about a congressman who would support a sitting Republican governor doing difficult things in the minority in Annapolis, Maryland, when [Democratic leaders] Mike Busch and Mike Miller had all the cards. I didn't get that. Andy will deliver that because he understands what it means to be a team player.

In other words, it is payback time. Apparently, Gilchrist wasn't sufficiently supportive of Ehrlich's belief in confronting Democrats on every occasion--a not-so-brilliant strategy in a state where Democrats outnumber Republicans more than 2-1 in the legislature. Notice how Ehrlich uses "team player" the same way President Bush talks about "bipartisanship". In both cases, they mean doing only exactly what fearless leader wants.

Are Republican bloggers appear ready to follow where Ehrlich leads? Monoblogue, a member of the Wicomico Republican Central Committee, is running a Club for Growth ad that Glichrist is a liberal (oh, the horror), though Brian Griffiths thinks that the numbers just don't ad up for Harris.

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Town of Chevy Chase Sold

In shocking news, the Town of Chevy Chase Town Council announced that the Town has been sold to a joint venture by Federal Realty and Caesars Palace. The Town's residents will all move into a single giant 25-story condo building located at the south end of the Town. Mayor Lena Barnes will announce the sale at a press conference in front of the Town Hall at the Leland Center today.

County and state officials worked overtime to make the deal happen. In a special 3:30am Columbus Day session, the County Council adopted a zoning text amendment (ZTA) changing the zoning of the Town in the Master Plan from R-60 to CBD-3. Labor Secretary Tom Peres successfully lobbied the administration for a casino license for Caesars Chevy Chase which will open at Leland Center in Fall 2008. Mike Maden of the Maryland Transportation Administration (MTA) agreed that all Purple Line trains would be painted the color of asphalt in order to color coordinate with the new paved trail and to open a bike connection through Elm St. Park to the new Town Hall/Casino.

Town residents gushed about the plan to reporters: "With all the storm drain and water main problems, it just wasn't viable to maintain a community of single-family homes over the long term" said David Lublin, a member of the Town's Long-Range Planning Committee. Another resident explained in a telephone interview that "The $20 off coupon to Barnes & Noble is what sealed the deal for me."

However, not all residents are happy with the plan. One local progressive activist expressed displeasure that her suggestion to paint "Kucinich 2008!" on the sides of the building facing downtown Bethesda and the Chevy Chase Country Club had not been adopted. "I think the Town needs to be a leader on these questions" said the resident in a statement issued on recycled, oatmeal-colored paper.

The Chevy Chase Urban Partnership (CUP) applauded the plan, issuing a statement headed "You Can't Stop Progress!" CUP promised that it would consider running a shuttle from downtown Bethesda to the new Town of Chevy Chase Building starting in 2015 but only if funding is forthcoming. Sen. Rick Madaleno, a member of the Budget and Tax Committee, promised to do his best to secure money for this purpose from the State but said "It's going to be a tough fight in today's climate with so many projects competing for scarce transportation dollars."

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Immigration Follies

Prince William County has a deficit of around $10 million. Solution? Spend over $14 million over the next five years to deny services to immigrants:

The supervisors committed just $325,000 yesterday toward the police measures, which are projected to cost $14.2 million over five years. County staff members have said that the costs will be minimal for the new service restrictions.

Programs that are now off-limits for illegal immigrants include bus tours for senior citizens, leadership training programs for adults, and rental and mortgage assistance. The measures also prohibit illegal immigrants from getting business licenses.

Yup. Free bus tours for seniors is what keeps illegal immigrants in the country. Meanwhile, Takoma Park is living up to its reputation as the uberliberal municipality of the region by denying its police permission to pickup immigrants wanted for serious crimes, as Gilbert of the Granola Park blog reports:

The INS agency, since renamed Immigration and Customs Enforcement (ICE) is now part of the Department of Homeland Security. It now maintains a data base of wanted persons that includes “deported felons.” According to the city’s background paper “deported felons” includes “persons who have been convicted of felony drug trafficking, felony firearms trafficking, or a serious violent crime” who have been deported but have re-ported themselves.

Chief Ricucci requested the council review sanctuary law and create a loophole that would allow city police to arrest these deported felons. This small change would keep the law, and the spirit of the law intact, he said.

The huge crowd that turned out to speak against any changes to the law disagreed with that, however. There were a few exceptions, notably a foreign-born woman who said that her family had played by the rules and waited their turn in line to become legal immigrants, so she urged the council to make the changes requested by Chief Ricucci in order to keep the city safer.

That was not to be however. The Mayor and council, following a long, impassioned citizen comment period and a presentation from the police chief, turned him down unanimously. It was not a hard put-down, though. It wasn’t an unreasonable request that the chief was making, they said, but, as the Mayor said, she was concerned with the impression even a small change to the law would give. She did not want to feed the current national anti-immigrant hysteria, nor did she want to create anxiety among the city’s immigrant population.

Maybe it's just the unseasonably warm fall weather but local governments around the region seem a little touched at the moment on the immigration issue.

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On Political Pulse

Amy Presley, the President of the Clarksburg Town Center Advisory Committee ("CTCAC"), will be on the "Political Pulse" TV Show on Thursday, October 18th at 9 p.m. and Tuesday, October 23rd at 9:30 p.m. to discuss the latest controversy between the County Government and citizens in Clarksburg.

The controversy relates to whether the County is going to implement "special taxing districts" in Clarksburg to recoup from residents there tens of millions of dollars that developers previously incurred for infrastructure costs. Based on published reports, if the special taxing districts are implemented, residents of the special taxing districts in Clarksburg would have to pay an average of $1,500 per household annually for 30 years.

Political Pulse is on Channel 16 TV in Montgomery County.

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Ali Files Bill to Open Central Committee Votes

Delegate Saqib Ali (D-39) has filed a bill which required members of the County Central Committee to vote openly instead of by secret ballot when casting votes to replace members of the General Assembly. Here are his thoughts on why: This summer was a most remarkable time for Montgomery County's Legislative Delegation. We had 2 State Legislators (Senator Hogan and Delegate Goldwater) resign only months into their 4-year terms. Because of a domino-effect, another vacancy in the House of Delegates was created when a sitting Delegate moved up to the Senate. (Full Disclosure: I unsuccessfully applied to fill the vacancy left by Senator Hogan) Most people expect that when such a vacancies arise, they would be filled by a special election or perhaps by Gubernatorial appointment. They would be wrong. Pursuant to the Maryland State Constitution, Article 3, Section 13 (which you can see by clicking here), legislative vacancies are filled by an awkward process: The Central Committee of the Party and County of the vacating legislator (got that?) submits a list of names to the Governor. The Governor must choose one of those names. Traditionally, the Central Committees force the Governor's hand by sending a "list" of only one name. Since Montgomery County is now all-Democrat, that means that the Montgomery County Democratic Central Committee (MCDCC) effectively chooses the replacement. Are ya with me so far? Good....

What is the MCDCC? The MCDCC is a group of 23 volunteer Democratic activists from throughout Montgomery County who carry out the day-to-day functions of the Democratic Party. They meet on the second Tuesday of each month in a very modest office in Kensington. Most members of the MCDCC are solid, hard-working people doing quite a thankless job. Click here to see a listing of the MCDCC members. How Does the MCDCC Appoint Replacement Legislators? When a vacancy occurs, The MCDCC publicizes the vacancy and accepts applications from any interested candidates. At their regularly-scheduled meeting, the 23 members vote. It takes a majority (12) votes to win. So if nobody gets 12 votes right away, they drop the lowest vote-getter(s) and repeat until somebody gets 12 votes. It's similar to instant-runoff voting. Now here is the big problem: All Members of the MCDCC vote by secret ballot. This means that these crucially important elections are decided by a small group of well-connected party-insiders in complete secrecy without any transparency or accountability to the hundreds of thousands of Montgomery County residents that elected them. This should trouble anyone who is an advocate of open, honest government. It certainly troubles me. I don't know who my elected MCDCC members voted for. And neither do you. Private citizens vote secretly of course. But would you tolerate it if your Congressman, Senators and State Legislators made their most important votes in complete secrecy? Of course not! As an elected official I vote publicly all the time. If I can't publicly defend my votes, then shame on me. Not only does the secret ballot deprive County residents of accountability, but it warps the normal "campaigning" process (ie: lobbying the 23 members) in strange ways due to mistrust and double-dealing amongst the members. Furthermore, this Gazette article makes very clear that by employing this secret ballot, the MCDCC has violated rules of the State Democratic Party. Many people are actively criticizing this process. You can read some of their criticisms here, here and here. For these reasons, I - along with Delegates Gutierrez, Montgomery and Heller - have introduced a bill (MC 808-08) entitled "Transparency in Appointments Act". This bill would prohibit the use of secret ballots by County Central Committees. You can see it by clicking here. But we need your help to get this bill passed into law. If you support open, honest government, please take the time to do all of the following: Contact the MCDCC by phone (301-946-1000) and email (montgomerydems@msn.com). Ask them to "Stop the Secrecy" by endorsing MC 808-08. Sign up to testify in support of this bill by clicking here. The hearing will be held at 6:30 pm on Thursday November 15th at the County Council Building (100 Maryland Avenue, Rockville). We need you there! Encourage all your Montgomery County Friends/Family/Relatives/Co-Workers to do the the above 2 steps. I am counting on the good people of Montgomery County to stand up and fight against secret dealings in their government. By the way, this bill should not in any way be construed as criticism against our new Senator or two new Delegates who are fine individuals and friends of mine. This is simply about sensibly reforming a flawed process and shining sunlight where it is needed for future appointments.

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