Tuesday, July 08, 2008

How to Get Clout in Annapolis, Part Two

In Part One, we covered the prevailing opinion of many about our county’s state legislators: they need to improve their effectiveness in protecting Montgomery’s interests in Annapolis. Step one in doing that is examining the incentives of the opponents.

One of the biggest obstacles to Montgomery’s clout in Annapolis is Senate President Mike Miller. Back in May, we offered this description of Miller’s practice of power:

Better than anyone, Mike Miller understands the volatile and fragile mix of ego, fear, hope, insecurity and the needy desire to be loved that defines most politicians. He knows how to push every one of those buttons. He praises obedient Senators as courageous. He predicts dire consequences for the wayward. He shuffles subcomittee chairmanships and vice-chairmanships like cards in an ever-winning hand. He elevates junior Senators above senior ones when they stick with the boss. A longtime Annapolis player told me, “We call him Big Daddy. When people screw up, he doesn’t get mad at them. Instead, he tells them he's ‘disappointed.’ No one wants to let Dad down.”
Big Daddy is a formidable opponent for anyone seeking more power in state politics, including Governors. Mike Miller wants two things: first, as many Democratic seats in the Senate as he can get, and second, making the holders of those seats dependent on him for money and support. Those two goals go together. As the Democratic Party pushes out into conservative areas (like the Baltimore suburbs, the Eastern Shore and Western Maryland) and increases its Senate ranks, the Democrats who hold those outlying seats are vulnerable. Both Miller and Governor O’Malley have an obvious incentive to direct as much campaign money and state funding to those districts as possible. If Miller can help those vulnerable Senators survive, they will be grateful – and obedient – to the boss. This will increase Miller’s stranglehold on power. But the strategy is only feasible if the resources controlled by Miller and O’Malley are directed to these fragile districts. That means they cannot be tied up in Montgomery County, especially if the delegations in Baltimore City and Prince George’s County are restive.

House Speaker Mike Busch has similar incentives as the Senate President, but he has a larger margin in his chamber and is generally more subtle than Miller. As for the Governor, he is focused on winning Baltimore County in his re-election campaign. So the three most powerful politicians in the state are united in one objective: directing state funding to just about anywhere else other than Montgomery County. Why? Because it does no good to them to shore up an area that is supposedly wealthy enough to take care of itself and liberal enough to vote Democratic no matter what. This is a severe problem for every Montgomery County politician, state and local.

Montgomery has carried this burden for a long time but now things are coming to a head. As we have previously chronicled, the tax hikes of the 2007 special session and the spending cuts of the 2008 general session have not eliminated the state’s long-run budget deficit. Since the legislature will not implement any more major tax increases prior to the next election year and many significant spending cuts have already been made, only two options remain: revenue from the slots referendum and sending teacher pension obligations, which are now mostly paid by the state, down to the counties. Montgomery budget officials tell me that if pension funding is shifted down from the state, the county would face an extra $120 million per year in costs or more. Putting that in perspective, each percentage point of the county’s 5% public employee union pay increase equals about $20 million. That means Montgomery County could cancel the entire pay increase for all of its unionized employees and still be unable to pay the cost of assuming state-funded teacher pensions. One high-ranking budget official described the fiscal impact of a state handoff of pension funding as “a nuclear explosion.”

Will Montgomery County be spared this fate if the slots referendum passes? Not necessarily, for three reasons. First, it will take several years for any casinos to be up and running. Second, slots revenues may not be as high as projected (currently estimated at over $500 million per year). Third, an election year is coming in 2010. The Governor and the legislative leaders will be looking to spend some serious money to get votes. If slots money is not enough, pension obligations may have to be shed. And that means a state-sponsored fiscal nuke will annihilate Montgomery County’s budget.

But our delegation can fight back. We’ll learn how in Part Three.