Wednesday, December 31, 2008

State Error Shorts MoCo Schools $20-25 Million (Updated)

In a shocking memo only now making the rounds of Montgomery County’s political and educational communities, Superintendent of Schools Jerry Weast reveals that a mistake in state budget formulas resulted in aid underpayment to the county’s schools of $20-25 million in this current budget year. The result of this underpayment contributed to spending reductions this year and may help strain employee benefits next year.

In Maryland, state aid to public schools is driven by a wealth formula. “Wealthier” school districts receive less aid per pupil than “poorer” school districts. One component of this wealth formula is real property value as calculated by the State Department of Assessments and Taxation (SDAT). Districts with higher average real property values receive less money than those with lower values. (To view this year’s distribution of school aid, see page 17 of this document.)

In FY 2009, state aid for MCPS was actually cut because Montgomery County’s wealth level allegedly increased in comparison to other counties. At the time he learned of the cut, Dr. Weast claims he complained of an error in the calculations to the County Executive, County Council and state delegation. In a memo to the Board of Education released yesterday, Dr. Weast says he has been proven correct. SDAT now admits that it overestimated the value of real property in Montgomery County by $15.8 billion because it double-counted new homes. The result is that Montgomery lost $20-25 million in state aid due from the wealth formula. That money was instead paid out to other school districts in the state.

Dr. Weast also goes into great detail about the consequences of cuts in further state aid. If Montgomery County loses funding under the state’s Geographic Cost of Education Index (GCEI), a formula that routes money to districts with higher costs of education, and receives less aid under aspects of the state’s wealth formula, MCPS may not be able to fully fund its pension and health obligations. This endangers employee benefits after the school employees gave up $89 million of cost-of-living adjustments.

But that lies in the future. The present problem is the county’s loss of $20-25 million in mandated state aid in the current fiscal year (FY 2009), money that has already been allocated to other school districts in Maryland. That creates a gigantic political problem with multiple dimensions:

1. Who knew and what did they do about it?
In his memo, Dr. Weast said he suspected a shortfall all along and complained about it to the County Executive, County Council and state delegation. Did anyone investigate his complaint? If so, what did they learn? And when did they learn it? Dr. Weast believes the error was discovered as early as August 2008. Was it known earlier? And did anyone at the state level take steps to correct it?

2. Wasted conflict at the County Council
As we covered extensively on this blog, the County Council agonized over the FY 2009 budget. As late as the last days of discussion, County Council Members Phil Andrews, Duchy Trachtenberg and Roger Berliner were proposing furloughs of county employees that would save $20.5 million. The final budget agreement reduced the County Executive’s proposed tax hike by $20 million and called for $8 million in savings by both MCPS and the rest of the government. If the state aid had been calculated properly, these conflicts could have been avoided.

3. Distrust of the Governor
For some time now, Montgomery County’s leaders have felt growing distrust of Governor O’Malley. His unrepentant shorting of school construction money is one reason. MDOT’s significant cuts to both the Purple Line and the Corridor Cities Transitway while protecting funding for Baltimore’s Red Line is another reason. (The school construction money and transit funding were among the promises made by the administration to Montgomery’s delegation in return for their votes on the special session’s tax and slots bills.) This issue will deepen and exacerbate that distrust.

4. Who will act to recover the money?
At present, our informants are unaware of any state plans to pay back the $20-25 million Montgomery is owed in this fiscal year. Will the County Executive, the state delegation or anyone else call the administration to the mat on this one? If not, then what are the consequences to the state of shorting Montgomery County?

Readers, we now have the first burning political issue of 2009.

Update: The Washington Post quotes Governor O'Malley as saying that MCPS will get the $24 million it is owed and that the other districts can keep their overpayment. But Dr. Weast is now accusing the state of a "cover-up" going back several months. My sources say that County Executive Leggett spoke to the Governor on New Year's Eve and the understanding they reached was to "sit down soon to work this out."

Following is the complete text of Dr. Weast’s memo to the Board of Education.


Office of the Superintendent of Schools
Montgomery County Public Schools
Rockville, Maryland
December 30, 2008


To: Members of the Board of Education
From: Jerry D. Weast, Superintendent of Schools
Subject: FY 2010 Operating Budget: State Aid

On December 11, 2008, I transmitted my Recommended FY 2010 Operating Budget to the Board of Education. In prior years, when I sent me budget to the Board, I had the preliminary state aid estimates from the Maryland State Department of Education (MSDE). However, I did not receive the preliminary estimates for FY 2010 state aid for public schools until December 22, 2008.

On December 26, 2008, I informed you about these preliminary FY 2010 estimates for state aid. The revenue estimates include an increase in state aid for Montgomery County Public Schools (MCPS) of $71.1 million (17.8 percent) to $470.4 million. This is $50.3 million higher than the estimates included in my FY 2010 Recommended Operating Budget. These preliminary FY 2010 state aid estimates are subject to change in the Governor’s FY 2010 recommended budget due in January 2009. In addition, any change in state funding formulas made by the General Assembly during the 2009 legislative session will be reflected in the final FY 2010 state aid allocations next April. I expect changes in the revenue from the state by the time the General Assembly approves the budget.

The main reason for this significant increase in state aid is an increase of $57.4 million in basic Foundation aid primarily as a result of an apparent decrease in the relative wealth of Montgomery County compared to other counties in Maryland. Because state aid is wealth equalized, the share of state aid received by Montgomery County is higher than last year. According to the preliminary calculations, Montgomery County would receive $69 million of the $91 million of increased mandated state aid. These figures are a complete reversal from last year’s change in real property wealth, which resulted in MCPS losing state aid for FY 2009. However, the State Department of Assessments and Taxation now recognizes that the real property wealth calculations for Montgomery County were mistaken for FY 2009 by approximately $15.8 billion, possibly because of a double count of new homes. Last year, I informed the Board of Education I felt there had to be an error in the wealth calculation. We also informed the County Executive, County Council and our delegation of a possible error. However, no corrections were made last year. I have learned that the error was discovered as early as August 2008. Preliminary estimates are that we have lost between $20 million and $25 million of mandated state aid this year. The increase in state aid estimated for FY 2010 does not correct the error made last year but appears greater than it should be because of the FY 2009 error.

The FY 2010 state aid for Montgomery County includes $31 million for full funding of the Geographic Cost of Education Index (GCEI) as required by current law. However, GCEI funding is not mandated in the Governor’s budget. As you know, there is discussion that the Governor plans the current year’s allocation of GCEI funding by half, or $9 million. If the GCEI is not funded for FY 2010, MCPS would still receive an increase of $40.1 million over the FY 2009 approved budget instead of $71.1 million. This is only $19.4 million more than the $420 million estimated for state aid in my FY 2010 Recommended Operating Budget. The total of $420 million is an increase of $20.7 million over the FY 2009 state total.

Assuming this increase in state aid of $40.1 million, the operating budget request will have to be increased above the amount of my recommended budget by $19.4 million. The County Council cannot use this additional state aid to reduce the county’s contribution to MCPS because it would be in default of the state Maintenance of Effort requirement. Increased enrollment in FY 2009 requires the county to increase the local contribution to MCPS by $16.2 million. My recommended operating budget assumes that this increase in county contribution will come entirely from savings generated by MCPS this year rather than from new county tax revenues.

Therefore, as a result of these new preliminary state aid estimates, I am amending my recommended budget submitted to you on December 11, 2008. Because of the uncertainty of these additional state funds and the fact that we cannot count on this funding being available in April 2009, we cannot change the budget we have in place. The changes I am making will not affect the $35 million of reductions in the FY 2010 operating budget, the elimination of cost of living adjustments for our employees, or the $20 million in savings that will be generated from the freeze in the current year. My priority is to protect our employees as much as possible from reductions in future years to benefit programs. This can be done by using the additional state funds for expenditures in benefit programs that will require significant budget increases in FY 2011. As you know, my budget did not permit inclusion of $12.3 million scheduled for FY 2010 for the Retiree Health Trust Fund (OPEB). The contribution to OPEB could increase by as much as $24 million in FY 2011. If these additional state funds are available in FY 2010, we should try to adhere to the current eight-year phase-in of OPEB funding and add the $12.3 million to the budget.

Additionally, it is important to add resources to the Employee Benefit Plan (EPB) internal services fund to have sufficient reserves to absorb unanticipated increased costs for health care coverage for active and retired employees. As a result of decisions made last spring to fund the FY 2009 Operating Budget, the trust fund balance of almost $21 million at the end of FY 2008 will be reduced by as much as $10 million this year to fund EPB costs. In addition, my recommended budget for FY 2010 assumes we will need to reduce this fund balance even further. In order to avoid the possibility of a shortfall in the EPB fund that would need to be replenished in FY 2011 and to maintain an appropriate balance in the trust fund, I will recommend that an additional $7.1 million be approved for the fund.

Finally, if additional state aid beyond the $19.4 million is available next spring, I would recommend placing these funds in the MCPS Employees’ Retirement and Pension Systems plan. We anticipate significantly higher retirement payments in FY 2011 because market returns in FY 2009 will be far below actuarial expectations. This would require significant increases in employer contributions in FY 2011 to maintain the funded status of the program. Therefore, it would be prudent to make additional allocations into the plan if there is additional state aid next spring.

Because of the seriousness of the economic situation in the county, the state, and the nation, it is doubtful that MCPS will receive the additional $71 million of state aid. If the only change that is made is the elimination of the GCEI and we receive an additional $40.1 million in state aid, we should attempt to take pressure off of the FY 2011 budget that will result from significant increases for the health and retirement plans. I believe this is the more prudent action the Board can take. If we do not receive the additional $19.4 million above my preliminary projections for state aid, then we would need to eliminate these increases for OPEB and the contributions to the EPB trust fund in the spring.

I still am concerned about the error that was made last year which resulted in an underpayment to MCPS and an overpayment in a similar amount to the other school systems in the state. We should work with the County Executive and our delegation to pursue this with the Governor.

I will continue to keep you informed of further developments on this issue. If you have any questions, please call Mr. Larry A. Bowers, chief operating officer, at 301-279-3626 or Dr. Marshall Spatz, director, Department of Management, Budget, and Planning at 301-279-3547.


Copy to:
Executive Staff
Ms. Cullison [MCEA]
Ms. Cuttitta [SEIU Local 500]
Dr. Newman [MCAASP]


Friday, December 26, 2008

Hoisted from the Comments: Lacefield vs. Pagnucco

For those readers who missed it in the comments section, this exchange between myself and County Executive spokesman Patrick Lacefield about the county's proposed stimulus package is worth reading.


Don't believe everything you read. The Washington Post issued a correction/clarification today that makes clear there is NOT lost revenue from the proposal. Up to $50 million in impact taxes and permitting fees would be DEFERRED for a year for commercial and residential projects to help businesses stuck in recession mud and preserve jobs. Actually that $50 million is an estimate of what County govt. would take in if the economy is humming. Since it's decidedly not, even the deferral dollars are nowhere near that amount. In other words, we are deferring money that, mostly, we aren't getting because projects are not moving forward, something this initiative hopes, modestly, to affect. Permitting fees are an Enterprise Fund (that pays for Permitting Dept. expenses). Impact fees are in the capital budget. And so even this modest deferral has next to nothing to do with the County operating budget, much less the schools operating budget. The County Executive was looking to provide a modest boost for County businesses without it costing much at all. Since this is only a deferral, this proposal does just that.

Mr. Lacefield:

I consistently used the terms "delayed" and "deferred" to describe the disposition of the revenues. Your problem on that issue is with the Post, not with us.

But let's assume for a moment that you are correct: Business is not paying many of these fees now. What stimulus is produced by deferring fees that business does not even pay? In all my time in the building trades, I have never heard of a contractor creating a job because he was allowed extra time before refiling a building permit!

If the stimulus package has any value to business at all, it must involve actual (if only temporary) relief from fees. And if it does, the delayed revenues must be made up somehow. That is why the timing of the lost COLAs coming right before this stimulus announcement matters.

And that gets to the root of the problem. Someone in the Executive Branch needs to be able to connect these dots and provide good advice to Mr. Leggett. Someone needs to say, "Hmmmm... The employees just gave up their raises. Now is a bad time to bring in business and hand out nice stuff." It's just good political common sense. But no one did that. Why?


Wednesday, December 24, 2008

Crisis at WSSC

Last month, I wrote the following about the Washington Suburban Sanitary Commission (WSSC):

...If this agency is not reformed one way or another, things are going to get a lot worse. And then more pipes – and tempers – will explode.
I could not have imagined how soon - and how spectacularly that would come true!

Yesterday's life-threatening pipe break, in which the "road literally exploded," was the most predictable disaster in Montgomery County's history. Last summer's giant pipe rupture in Derwood, which shut down most of the county's restaurants for days, was supposed to be a wake-up call. But no one woke up! WSSC is in exactly the same dysfunctional condition that it was then, perhaps even worse.

Someone needs to take responsibility for this mess before people are actually killed. Here is what needs to happen so that WSSC can someday be an agency worthy of the taxpayers.

1. The WSSC Commission, comprised of three members from Montgomery County and three members from Prince George's County, must hire a new General Manager. The position has been vacant for almost a year(!)

2. The Commission must pass a capital plan to finance reconstruction of the pipes. They could not do so last February and the issue has festered ever since.

3. If the Commissioners cannot accomplish both of the above items in two weeks, County Executives Ike Leggett and Jack Johnson must dismiss the entire board and replace them. Every single one of them.

WSSC has been allowed to rot in its petty and destructive internal politics for at least a year. That must end as soon as possible. Or there are going to be more disasters, more "tsunamis" and ocean-style rescues, and possibly even loss of life.



Bad Boy Barve Gets a Lump of Coal

After the last few weeks, we may as well just rename this blog Maryland Politics Watch with Kathleen Miller. With the Examiner’s trouble-making reporter grabbing scoops left and right, how is an underpaid blogger supposed to compete? This time Ms. Miller’s target was MoCo’s wisecracking Bad Boy, House Majority Leader Kumar Barve (D-17).

The basic story in Ms. Miller’s article is that Barve and his wife, attorney Maureen Quinn, each purchased homes before they married and received principal residence designations on them from the State’s Department of Assessment and Taxation (SDAT). Principal residence status is important because it confers tax credits from the state and county. Barve and Quinn kept those designations after they married, earning credits on both properties.

The timing of the transactions is important. Ms. Quinn bought her home in Annapolis on 12/22/03. Barve bought his home in Gaithersburg on 8/4/04. The couple married in September 2004. Ever since, SDAT has applied principal residence status to both properties, triggering credits estimated by the Examiner at $5,844.88 on the Annapolis home and $3,575.13 on the Gaithersburg home.

The House Majority Leader (who is also the Chair of the House Revenues Subcommittee) provided this statement to us:

Before we got married, my wife and I bought homes and each of us filled out the form saying that the home was our primary residence – which was true. Everybody does this at settlement. We then got married and decided to keep both homes because we could afford both mortgages. We never changed the titles of the properties into joint names because the paperwork seemed unnecessary. If I died, she would get my property and vice versa. We occupy both homes (we live in Annapolis during session – thereby saving the taxpayers the cost of paying for a hotel room for me).

Three years later, our accountant said we would have to fill out a form to declare our Gaithersburg home as our primary residence so that we would get the Homestead credit for the property. We did this. Period.

There are some people who deliberately apply for the credit for investment properties illegally and we wrote the law with them in mind. The situation of a married couple not selling one home was not what we considered. If you recall, there was a news article last year about other legislators from both parties in this situation. Even when reading that article it never occurred to us that we might be in a similar situation.

Maureen and I have tried to be very diligent about NOT getting special treatment of any kind. And, we do whatever our accountant tells us to do.
Barve should fire his accountant. When I Googled “Maryland principal residence,” the very first search result was this SDAT regulation, which states in part:

In cases where spouses own two dwellings and claim each occupies one of the residences, the credit will be granted only on the one property used as the principal residence unless the couple is legally separated. There have been several court cases involving tax credits as well as Internal Revenue Service Regulations holding that the “notion of marriage” would be contravened to allow more than one residence.
In his statement, Barve references a law that was passed in 2007 by the General Assembly. That law, which Barve co-sponsored, was spurred by the work of tax activist Louis Wilen and was intended to crack down on landlords who illegally claimed principal residence status for properties they rented out. But the law’s requirement that citizens apply for renewals of their principal residence also ensnared many non-landlords, including several state legislators. In any case, the SDAT regulation prohibiting dual principal residence for married couples predates this law. The Examiner quoted an SDAT manager who said the prohibition “had been that way forever.”

Most of my informants declined to comment on this even on an anonymous basis. Two of them joked that Barve’s real problem is that his partner is of the opposite sex. One spy laughed, “Hey, if they had been an unmarried same-sex couple, this would all be legal!”

Kumar Barve has a lot going for him. He is whip-smart, wickedly funny, has a long institutional memory of the House as a fifth-term Delegate and holds a position of substantial influence. All of these things make him potentially a great asset for Montgomery County in Annapolis. But on the heels of his DUI guilty plea, he is now in the midst of his second negative story in a year. MoCo’s Bad Boy must stay out of more trouble. Can he do it?


Tuesday, December 23, 2008

Death of an Institution

By Marc Korman.

Comptroller Peter Franchot recently held a fundraiser in the lobby of the Chevy Chase Bank building in Bethesda. Alex Boyle, Vice Chairman of Chevy Chase, kicked off the event by welcoming everyone to the Chevy Chase Bank building, but then corrected himself to welcome everyone to the Capitol One Building. Montgomery politicians are going to miss more than Chevy Chase Bank’s lobby now that it is being bought by Capital One.

Capital One announced in early December that it was buying Chevy Chase Bank. Over time, Chevy Chase’s ubiquitous branches and ATMs will be converted to Capital One locations. We do not know yet if there will be branches that close, ATMs that disappear, or layoffs. But there is no question that the acquisition by Capital One will bring major changes to the forty year old regional institution.

One of those changes will be political. Chevy Chase Bank is one of seven individual banks with a registered state political action committee in Maryland. There are also PACs for the Banking industry and Mortgage Bankers in general. But of the individual bank PACs, none have been better to Montgomery County politicos than Chevy Chase Bank.

During the 2006 and 2008 cycles, the PAC made $37,200 in donations, $22,700 of which was to Montgomery politicians. That includes over $5,000 to Howard Denis, over $4,000 to George Leventhal and Doug Duncan, and $2,500 to Steve Silverman. Hans Riemer even scored $250, the only non-office holder to receive a donation.

The other individual banks with state PACs in Maryland are Bank of America, BB&T, First Mariner, Mercantile, M&T, and Provident. But none are based in Montgomery County like Chevy Chase is and they have been nowhere near as generous to Montgomery politicians. During the 2006 and 2008 cycles, Bank of America’s state PAC gave $12,350 to Montgomery candidates, First Mariner gave $4,000, Provident gave $2,500, and the others gave nothing.

Here is a complete breakdown of the individual bank donations to Montgomery politicians between December of 2004 and December of 2008.

Chevy Chase MD PAC
Delegate Kumar Barve-$250
Councilman Howard Denis-$5,200
County Executive Doug Duncan-$4,500
Delegate Brian Feldman-$500
Delegate Brian Frosh-$250
Senator Rob Garagiola-$2,000
Delegate Sheila Hixson-$500
Councilman Mike Knapp-$500
County Executive Ike Leggett-$2,000
Councilman George Leventhal-$4,250
Council Challenger Hans Riemer-$250
Councilman Steve Silverman-$2,500
Total Donations in Maryland: $37,200
Total Donations in Montgomery County: $22,700

Bank of America MD PAC
Delegate Kumar Barve-$750
Delegate Bill Bronrott-$100
Delegate Sheila Dixon-$1,750
Comptroller Peter Franchot-$5,000
Attorney General Doug Gansler-$1,500
Senator Rob Garagiola-$1,100
Delegate Susan Lee-$250
Councilman George Leventhal-$700
Delegate Roger Manno-$250
Delegate Herman Taylor-$950
Total Donations in Maryland: $56,435
Total Donations in Montgomery County: $12,350

First Mariner Bank
Comptroller Peter Franchot-$4,000
Total Donations in Maryland: $6,800
Total Donations in Montgomery County: $4,000

Doug Duncan: $2,500
Total Donations in Maryland: $16,060
Total Donations in Montgomery County: $2,500

Branch Banking and Trust Company MD PAC
Total Donations in Maryland: $3,500
Total Donations in Montgomery County: 0


Horse Breeders or Kids?

A recent Examiner article on a proposal by Delegate Luiz Simmons (D-17) to strip a $100 million subsidy from slots to the horse-racing industry raises an interesting question: should slots money go to horse breeders or kids?

Delegate Simmons, perhaps second only to Comptroller Peter Franchot in his fire-breathing opposition to slots, believes that slots money should not be given to the horse-racing industry in a time of billion-dollar state budget deficits. He tells the Examiner, “I can’t stomach giving $100 million each year to bail out a dying business.” Simmons would rather use the money for education, health care and transportation.

Shaun Adamec, a spokesman for Governor Martin O’Malley, responded, “Slots, including the revenue generated by them, is an issue that has been debated for many years, and was ultimately decided by the voters in November.” Adamec’s implication is that Marylanders voted to give the horse racing industry $100 million a year. That, of course, is dead wrong.

HB 4 of the Special Session, which was the constitutional amendment providing for slots, authorizes them for “the primary purpose” of funding prekindergarten through 12th grade education as well as public school and higher education capital projects. It says nothing about horse racing. Neither does the actual ballot language, which only mentions education. Horse racing and other uses of slots money appear in SB 3, the authorizing bill, which was approved by the legislature but not by the voters.

It turns out that education, which is after all the “primary purpose” for slot machines, could be a casualty of the state’s budget crisis. In a recent Gazette article, Senate President Mike Miller said, “I don't intend to support any cuts in education,” but pointedly excluded teacher pensions and the Geographic Cost of Education Index (GCEI) from his definition of cuts. We have discussed teacher pensions before, but the GCEI issue warrants further discussion.

GCEI was part of the 2002 Thornton plan that authorized billions of dollars in new state spending on education aid. The purpose of GCEI was to steer additional aid to jurisdictions where the cost of education was particularly expensive. Former Governor Bob Ehrlich never funded GCEI, but Governor Martin O’Malley initiated a partial phase-in during the special session. The largest recipients of GCEI aid in this fiscal year are Prince George’s County ($23.6 million), Montgomery County ($18.4 million) and Baltimore City ($13.0 million). Thirteen of Maryland’s twenty-four jurisdictions receive at least some GCEI funding and the total amount this year is $75.8 million. (See page 16 of this document for the full distribution.)

In the aftermath of the recent cost-of-living concessions by Montgomery County’s school unions, I asked one of my labor friends what would happen if GCEI were eliminated. “We’ve given everything up,” my source told me. “It would go straight to the classrooms.” That is a calamitous scenario that few politicians would willingly embrace. But according to the Post, the state may now eliminate at least half of this funding.

While slots money will not be available in time for this year’s state budget, it will be rolling in soon enough. If GCEI is zeroed out this year, it may never come back. But if slots money is re-allocated away from the horse industry and towards education – which is of course the “primary purpose” for slot machines – then GCEI could be restored. So this creates one very important question for our state legislators:

Who’s more important? Horse breeders or kids?


Monday, December 22, 2008

Purple Line Alternatives and Greenhouse Gas Emissions

This guest blog is by David Salzman. I realize many are worn out from the Purple Line debate but let's keep it civil in the comments. Of course, a variety of viewpoints are expected and welcome on this controversial issue.

This posting provides an apples-to-apples comparison of the medium-investment light-rail transit (LRT) and low-investment bus rapid transit (BRT) vehicles competing for consideration in the inner Purple Line alignment. It analyzes their greenhouse gas performance with all the backup numbers, sources, and calculations spelled out in human-readable and spreadsheet-readable versions.

My objective is to facilitate further analysis, particularly reasoned comments explaining any disagreements with my data or methodology.

Since this blog is ultimately about politics, comments regarding the alignment of public policy with this quantitative evidence (or persistence of policy assertions in contravention of the evidence) are welcomed too.

The Bottom Line:

All of the electrified light-rail transit (LRT) options would emit far more carbon dioxide than displaced from riders' personal cars. In fact a 60-seat light-rail car (TCar) would need to pull 75 passengers from their cars to reach CO2 break-even. The most vigorously pursued option, a medium-investment LRT, would generate 73,049,938 net pounds of carbon dioxide annually (113,423,818 emitted minus 40,373,880 displaced from its new riders' cars), or 25.6 net pounds added per mile traveled per rail car (TCar).

In contrast, all of the bus rapid-transit (BRT) options would pull enough riders out of their cars to yield less total production of carbon dioxide. The most vigorously pursued option, a low-investment BRT running on compressed natural gas (CNG), would save 14,380,310 net lbs of carbon dioxide annually (9,591,681 emitted minus 23,971,991 displaced from its new riders' cars), or 6.61 net lbs of carbon dioxide removed per mile traveled per rapid-transit bus. The BRT system only needs to pull 8 passengers from their cars to reach CO2 break-even. By the Draft EIS's numbers, each BRT vehicle pulls 13 passengers from their cars.

I have imputed a schedule for the LRT from the table of service shown on page 3-3 of the Draft EIS. (Note that the LRT only delivers or collects 1800 passengers per hour each way at Bethesda during the morning rush hour, despite twice that capacity being needed for the document's own figures to tie together.) The notation "6 2-TCar" means six trains per hour, each comprising two 60-seat electrified rail cars.

5:00 - 7:00 AM 6 1-TCar trains per hour,
7:00 - 9:30 10 3-TCar,
9:30 - 4:00 PM 6 2-TCar,
4:00 - 7:00 10 3-TCar,
7:00 - 9:00 6 2-TCar,
9:00 - midnight 6 1-TCar

12:00 - 3:00 AM 3 1-TCar,
7:00 - 9:30 3 1-TCar,
9:30 - 7:00 PM 6 1-TCar,
7:00 - 9:00 2 2-TCar,
9:00 - midnight 3 1-TCar

12:00 - 3:00 AM 3 1-TCar,
7:00 - 9:30 3 1-TCar,
9:30 - 9:00 PM 6 1-TCar,
9:00 - midnight 3 1-TCar

This totals to 3372 TCar-hours per week, or 1.94 TCars per average train. 68.4% are off-peak.

The table grants the LRT an average passenger load of 89.1% in order to avoid the pollution from less-full trains, though this makes the estimated off-peak ridership absurdly high, e.g. more than 40 passengers all the way until 3:00 AM Saturday and Sunday mornings. The actual service level will consequently need to be higher, especially 5:00 - 7:00 AM weekday mornings, but that would disadvantage the LRT option further and I wanted to give it every reasonable benefit of the doubt since the hard numbers prove it to be such a gawdawful choice anyway.

NOTES for the spreadsheet below:

+ Two versions follow. The first is a straightforward table with all the data sources spelled out and entries explained; the second allows you to recreate the spreadsheet yourself and then waste countless hours trying to contrive a way to make the LRT less awful an environmental choice.

+ The carbon dioxide offset for getting people out of their cars onto rapid transit as new riders will diminish over time, though I don't include the effect. Passenger car technology improves faster than BRT technology, and BRT technology improves faster than LRT technology. In any case, cars turn over every 5 - 7 years on average, so the car fleet adopts gas-saving technology soonest.

+ Only "new trips" save gas by getting people out of their cars. The highest fraction of riders the MTA could stretch itself to claim would be new is 30.7% for the medium-investment LRT and 28.5% for the low-investment BRT. Everybody else would already be taking mass transit anyway, so they save no carbon offsets by switching to the new system. THIS IS AN IMPORTANT POINT.

+ I have not penalized the LRT for spending more carbon dioxide than the bus seat it pulls non-new riders out of, but probably should.

+ Be careful when interpreting the % occupancy figures. 100% occupancy means that every seat is occupied 3 1/2 times on average along the 32-mile circuit, since the average trip length is only 8.92 miles. The Draft EIS calculates the displacement of passenger car vehicle miles traveled (car VMT) for the high-investment LRT option (20,500 new riders), so I have derated the savings for the medium-investment LRT (19,200 new riders) and low-investment LRT (11,400 new riders). But the average trip length remains 8.92 miles whether the rider travels in a passenger car, BR bus, or LRT rail car.

+ I have set the expected MPG per average car in 2030 to the 2007 number of 22.4. Yes, it should be twice as high by then, and the CAFE standard for 2020 is 35 MPG, but I was trying to give the LRT every reasonable advantage to avoid the finding that it is browner and dirtier than cars, where the BRT is greener and cleaner.

+ There should be slight corrections for the vehicles getting heavier with more passengers, but the Draft EIS didn't take the time to deal with that so I'm not going to either.

HUMAN-READABLE VERSION (Version 12/21/2008)

(c) 2008 by David B. Salzman, Ph.D.
The Bottom Line for MedInvest LRT v LowInvest BRT
0.53 lbs of CO2 emitted to move 1 passenger-mile in a car
39.76 lbs of CO2 emitted to move 1 TCar 1 mile
75.08 New passengers per 60-seat TCar for LRT to reach CO2 break-even
408% Avg 24x7 LRT occupancy needed to reach CO2 break-even
113,423,818 Gross lbs of CO2 emitted per year by LRT
73,049,938 Net lbs of CO2 emitted per year by LRT (corrected for displaced cars)
4.41 lbs of CO2 emitted to move 1 bus 1 mile
8.33 New passengers per 60-seat bus to reach CO2 break-even
13.9% Avg BRT occupancy needed to reach CO2 break-even
9,591,681 Gross lbs of CO2 emitted per year by BRT
-14,380,310 Net lbs of CO2 emitted per year by BRT (actually, savings)


Data Inputs: Comments Source
16.00 miles/route DEIS pg 6-3
60 seats/TCar DEIS pg 2-31
59 minutes/route for MedInvest LRT DEIS pg 6-3
3,372 TCarHrs/wk imputed from DEIS table 3-3
1738 trainHrs/wk imputed from DEIS table 3-3
550 Peak trainHrs/wk imputed from DEIS table 3-3
62,600 trips/wkdy DEIS pg 6-3
19,200 New trips/wkdy DEIS pg 6-3
$118.00 $/ton for coal in MD
$4.70 $/Mbtu for coal in MD
210.20 CO2 lbs/Mbtu from coal
33.1% Electricity Rcvd at TCar
62,640 btu/mile to power each TCar
22.4 Car MPG 2007
19.33 CO2 lbs/gallon of gasoline
1.63 Avg # passengers/car
-186,400 VMT/wkdy for HiInvest LRT option DEIS pg 3-9
1,031 btu/cf CNG cf refers to cubic foot of (UNcompressed) natural gas at STP
0.122 CO2 lbs per cf CNG
37,268 btu/mile of CNG BRT
40,000 trips/wkdy for LowInvest BRT DEIS pg 6-3
11,400 NewTrips/wkdy for LowInvest BRT DEIS pg 3-5
7,967 BRT miles/wkdy DEIS pg 4-87

LRT TCars:
60 seats/TCar
0.98 hours/route
16.00 miles/route
3,372 TCarHrs/wk
1,738 trainHrs/wk
550 Peak trainHrs/wk
68.4% % TCars off-peak
1.94 Avg TCars/train
3,291,986 seat-miles/wk

LRT passengers:
62,600 trips/wkdy
19,200 New trips/wkdy
30.7% % New riders
7,825 trips/Sunday (guesstimate 1/8 of wkdy)
328,650 trips/wk
100,800 NewTrips/wk
8.92 Avg miles/trip (independent of # of passengers per car)
89.1% Avg occupancy (concocted to be ridiculously high)
53.46 Avg riders/TCar
75.08 | NewPassengers for CO2 break-even (in a 60-seat TCar?)
244.79 | | Total Passengers for break-even (impossible to save CO2 in any LRT)

At power plant:
$118.00 $/ton in MD
$4.70 $/Mbtu in MD
12,553 btu/lb coal
210.20 CO2 lbs/Mbtu
2.64 lbs CO2:coal

At MedInvest LRT train:
33.1% Electricity Rcvd
4,158 effective btu/lb
62,640 btu/mile
15.07 coal lbs/mile
39.76 CO2 lbs/mile
2,181,227 CO2 lbs/wk
0.74 CO2 lbs/TripMile
2.42 CO2 lbs/NewTripMile

Passenger car stats:
22.4 Car MPG 2007
22.4 Car MPG 2030 Obviously this will be a lot higher as cars improve and fleet mix changes!
19.33 CO2 lbs/gallon
0.86 CO2 lbs/mile
1.63 Avg Passengers/car
0.53 CO2 lbs/PassengerMile
4.73 net avg CO2 lbs/trip

Car miles avoided:
-186,400 VMT/wkdy HiInvest
-171,346 VMT/wkdy MedInvest
-21,418 VMT/Sunday (guesstimate 1/8 of wkdy)
-899,565 VMT/wk MedInvest
-40,159 gallons/wk MedInvest
-776,421 CO2 lbs/wk MedInvest

CO2 emissions by MedInvest LRT:
2,181,227 LRT CO2 lbs/wk emitted
-776,421 car CO2 lbs/wk displaced
35.6% net/gross CO2 (needs to be negative for any net savings)
1,404,807 net CO2 lbs/wk emitted
73,049,938 net CO2 lbs/yr (the LRT emits far more CO2 than the cars it displaces)
0.48 net avg CO2 lbs/TripMile
1.56 net avg CO2 lbs/NewTripMile

Compressed Natural Gas:
1,031 btu/cf CNG
0.122 CO2 lbs/cf CNG
118.33 CO2 lbs/Mbtu CNG
37,268 btu/mile CNG BRT
4.41 CO2 lbs/mile CNG BRT

LowInvest BRT:
40,000 trips/wkdy
11,400 NewTrips/wkdy
28.5% % New riders
5,000 trips/Sunday (guesstimate 1/8 of wkdy)
210,000 trips/wk
7,967 BRT miles/wkdy
41,827 BRT miles/wk

CO2 emissions by BRT:
184,455 BRT CO2 lbs/wk emiitted
59.4% Car derating for LowInvest LRT
-461,000 car CO2 lbs/wk displaced
-149.9% car CO2 displacement
-276,544 net CO2 lbs/wk
-14,380,310 net CO2 lbs/yr
-7.36 net avg CO2 lbs/NewTrip (BRT displaces CO2)
44.81 Avg riders/bus
-6.61 net CO2 lbs/mile BRT-cars (the BRT saves CO2)
8.33 | NewPassenger for CO2 break-even (9th new passenger saves CO2)
29.22 | | Total Passengers for break-even (30th total passenger saves CO2)

+ It's easy to put the machine-readable version of the spreadsheet into Excel. First, select and copy it from below and paste it into a word processor. Replace all instances of the five-letters "[tab]" with an actual tab character (e.g. the two characters "^t" in the Replace dialog box in Microsoft Word). Now select the corrected version from your word processor, copy it, bring up a fresh spreadsheet in Excel, click once on cell A10, and paste. If the cell stating "This should be in cell B10" is not in B10 on your computer, then figure out how far off you are, undo the paste, click on a cell that will put B10 where it was supposed to be, and try again. Then check that cell B148 is where it should be too. You can clean up the formatting (percentages, number of decimal places, etc.) by referring to the human-readable version.

SPREADSHEET-READABLE (Version 12/21/2008)

A10[tab]This should be cell B10[tab]
A11[tab](c) 2008 by David B. Salzman, Ph.D.[tab]
A13[tab]The Bottom Line for MedInvest LRT v LowInvest BRT [tab]
A14[tab]0.53[tab]lbs of CO2 emitted to move 1 passenger-mile in a car
A15[tab]39.76[tab]lbs of CO2 emitted to move 1 TCar 1 mile
A16[tab]75.08[tab]New passengers per 60-seat TCar for LRT to reach CO2 break-even
A17[tab]408%[tab]Avg 24x7 LRT occupancy needed to reach CO2 break-even
A18[tab]113,423,818[tab]Gross lbs of CO2 emitted per year by LRT
A19[tab]73,049,938[tab]Net lbs of CO2 emitted per year by LRT (corrected for displaced cars)
A20[tab]4.41[tab]lbs of CO2 emitted to move 1 bus 1 mile
A21[tab]8.33[tab]New passengers per 60-seat bus to reach CO2 break-even
A22[tab]13.9%[tab]Avg BRT occupancy needed to reach CO2 break-even
A23[tab]9,591,681[tab]Gross lbs of CO2 emitted per year by BRT
A24[tab]-14,380,310[tab]Net lbs of CO2 emitted per year by BRT (actually, savings)
A26[tab]THE DETAILS[tab]
A28[tab]Data Inputs:[tab]
A29[tab]16.00[tab] miles/route from DEIS pg 6-3
A30[tab]60[tab] seats/TCar from DEIS pg 2-31
A31[tab]59[tab] minutes/route for MedInvest LRT from DEIS pg 6-3
A32[tab]3372[tab] TCarHrs/wk from imputed from DEIS table 3-3
A33[tab]1738[tab] trainHrs/wk from imputed from DEIS table 3-3
A34[tab]550[tab] Peak trainHrs/wk from imputed from DEIS table 3-3
A35[tab]62600[tab] trips/wkdy from DEIS pg 6-3
A36[tab]19200[tab] New trips/wkdy from DEIS pg 6-3
A37[tab]$118.00[tab] $/ton for coal in MD from
A38[tab]$4.70[tab] $/Mbtu for coal in MD from
A39[tab]210.20[tab] CO2 lbs/Mbtu from coal from
A40[tab]33.1%[tab] Electricity Rcvd at TCar from
A41[tab]62640[tab] btu/mile to power each TCar from
A42[tab]22.4[tab] Car MPG 2007 from
A43[tab]19.33[tab] CO2 lbs/gallon of gasoline from
A44[tab]1.63[tab] Avg # passengers/car from
A45[tab]-186400[tab] VMT/wkdy for HiInvest LRT option from DEIS pg 3-9
A46[tab]1031[tab] btu/cf CNG from cf refers to cubic foot of (UNcompressed) natural gas at STP
A47[tab]0.122[tab] CO2 lbs per cf CNG from
A48[tab]37268[tab] btu/mile of CNG BRT from
A49[tab]40000[tab] trips/wkdy for LowInvest BRT from DEIS pg 6-3
A50[tab]11400[tab] NewTrips/wkdy for LowInvest BRT from DEIS pg 3-5
A51[tab]7967[tab] BRT miles/wkdy from DEIS pg 4-87
A53[tab]LRT TCars: [tab]
A54[tab]=B30[tab] seats/TCar
A55[tab]=B31/60[tab] hours/route
A56[tab]=B29[tab] miles/route
A57[tab]=B32[tab] TCarHrs/wk
A58[tab]=B33[tab] trainHrs/wk
A59[tab]=B34[tab] Peak trainHrs/wk
A60[tab]=1-B59/B58[tab] % TCars off-peak
A61[tab]=B57/B58[tab] Avg TCars/train
A62[tab]=B54*B56*B57/B55[tab] seat-miles/wk
A64[tab]LRT passengers:[tab]
A65[tab]=B35[tab] trips/wkdy
A66[tab]=B36[tab] New trips/wkdy
A67[tab]=B66/B65[tab] % New riders
A68[tab]=B65/8[tab] trips/Sunday (guesstimate 1/8 of wkdy)
A69[tab]=5*B65+2*B68[tab] trips/wk
A70[tab]=B67*B69[tab] NewTrips/wk
A71[tab]=(-B107/B70)[tab] Avg miles/trip (independent of # of passengers per car)
A72[tab]=B69*B71/B62[tab] Avg occupancy (concocted to be ridiculously high)
A73[tab]=B72*B54[tab] Avg riders/TCar
A74[tab]=B73*B91/B100[tab] | NewPassenger for CO2 break-even (in a 60-seat TCar?)
A75[tab]=B74/B67[tab] | | Total Passengers for break-even (impossible to save CO2 in any LRT)
A77[tab]At power plant:[tab]
A78[tab]=B37[tab] $/ton in MD
A79[tab]=B38[tab] $/Mbtu in MD
A80[tab]=(1000000*B78)/(2000*B79)[tab] btu/lb coal
A81[tab]=B39[tab] CO2 lbs/Mbtu
A82[tab]=B81*B80/1000000[tab] lbs CO2:coal
A84[tab]At MedInvest LRT train:[tab]
A85[tab]=B40[tab] Electricity Rcvd
A86[tab]=B80*B85[tab] effective btu/lb
A87[tab]=B41[tab] btu/mile
A88[tab]=B87/B86[tab] coal lbs/mile
A89[tab]=B88*B82[tab] CO2 lbs/mile
A90[tab]=B89*B56*B57/B55[tab] CO2 lbs/wk
A91[tab]=B89/B73[tab] CO2 lbs/TripMile
A92[tab]=B91/B67[tab] CO2 lbs/NewTripMile
A94[tab]Passenger car stats:[tab]
A95[tab]=B42[tab] Car MPG 2007
A96[tab]=B95*1.000[tab] Car MPG 2030 Obviously this will be a lot higher as cars improve and fleet mix changes!
A97[tab]=8.788*2.2[tab] CO2 lbs/gallon
A98[tab]=B97/B96[tab] CO2 lbs/mile
A99[tab]=B44[tab] Avg Passengers/car
A100[tab]=B98/B99[tab] CO2 lbs/PassengerMile
A101[tab]=B100*B71[tab] net avg CO2 lbs/trip
A103[tab]Car miles avoided:[tab]
A104[tab]=B45[tab] VMT/wkdy HiInvest
A105[tab]=B104*B65/68100[tab] VMT/wkdy MedInvest
A106[tab]=B105/8[tab] VMT/Sunday (guesstimate 1/8 of wkdy)
A107[tab]=5*B105+2*B106[tab] VMT/wk MedInvest
A108[tab]=B107/B96[tab] gallons/wk MedInvest
A109[tab]=B97*B108[tab] CO2 lbs/wk MedInvest
A111[tab]CO2 emissions by MedInvest LRT:[tab]
A112[tab]=B90[tab] LRT CO2 lbs/wk emitted
A113[tab]=B109[tab] car CO2 lbs/wk displaced
A114[tab]=1-B115/B112[tab] net/gross CO2 (needs to be negative for any net savings)
A115[tab]=B112+B113[tab] net CO2 lbs/wk emitted
A116[tab]=52*B115[tab] net CO2 lbs/yr (the LRT emits far more CO2 than the cars it displaces)
A117[tab]= B91*(1-B114)[tab] net avg CO2 lbs/TripMile
A118[tab]= B117*B92/B91[tab] net avg CO2 lbs/NewTripMile
A120[tab]Compressed Natural Gas:[tab]
A121[tab]=B46[tab] btu/cf CNG
A122[tab]=B47[tab] CO2 lbs/cf CNG
A123[tab]=1000000*B122/B121[tab] CO2 lbs/Mbtu CNG
A124[tab]=B48[tab] btu/mile CNG BRT
A125[tab]=B123*B124/1000000[tab] CO2 lbs/mile CNG BRT
A127[tab]LowInvest BRT:[tab]
A128[tab]=B49[tab] trips/wkdy
A129[tab]=B50[tab] NewTrips/wkdy
A130[tab]=B129/B128[tab] % New riders
A131[tab]=B128/8[tab] trips/Sunday (guesstimate 1/8 of wkdy)
A132[tab]=5*B128+2*B131[tab] trips/wk
A133[tab]=B51[tab] BRT miles/wkdy
A134[tab]=B133*B132/B128[tab] BRT miles/wk
A136[tab]CO2 emissions by BRT:[tab]
A137[tab]=B125*B134[tab] BRT CO2 lbs/wk emiitted
A138[tab]=B129/B66[tab] Car derating for LowInvest LRT
A139[tab]=B138*B109[tab] car CO2 lbs/wk displaced
A140[tab]=B141/B137[tab] net/gross CO2 (needs to be negative for any savings)
A141[tab]=B137+B139[tab] net CO2 lbs/wk
A142[tab]=52*B141[tab] net CO2 lbs/yr
A143[tab]=(B139/B88)/B86[tab] net avg CO2 lbs/NewTrip (BRT displaces CO2)
A144[tab]=B71*B132/B134[tab] Avg riders/bus
A145[tab]=B125*B140[tab] net CO2 lbs/mile BRT-cars (the BRT saves CO2)
A146[tab]=B125/B100[tab] | NewPassengers for CO2 break-even (9th new passenger saves CO2)
A147[tab]=B146/B130[tab] | | Total Passengers for break-even (30th total passenger saves CO2)
A148[tab]This should be cell B148[tab]


How Not to Deal with Labor

Kathleen Miller's account of the budget argument between County Executive Ike Leggett, County Council Member Duchy Trachtenberg and MCGEO President Gino Renne reveals just how bad the county's financial situation is. But even worse is the state of its relations with its labor unions.

As someone who has been in the labor movement for more than 14 years, it is difficult to imagine any poorer handling of public sector labor relations than I am witnessing now. The school unions just gave up $89 million in COLAs, most of which is now being used to finance $50 million of meaningless giveaways to business. And now MCGEO is being threatened with further cutbacks. For what? More giveaways to other groups in the county?

The building trades unions have occasionally engaged in concessionary bargaining over the years, notably during the recession of the early 1980s. We did it so that our employers could preserve jobs and protect their competitiveness. It would have been unthinkable for our employers to use those concessions to give discounts to suppliers or freebies to their favorite business partners. In fact, we were all squeezed by the recession together. And we survived by concentrating on the bottom line: solvency and a return to profitability.

So long as the county is handing out benefits to some groups while eliminating compensation and jobs for its employees, it will have no credibility with its workforce. The entire process of bargaining will be more painful, more difficult and more personal. And those involved, from the union leaders down to the rank-and-file, will never forget it.

If deficit reduction is the goal, then the last thing the county should do is delay revenues. The county should apply the savings from the unions directly to the deficit. But if the county's real goal is to practice hardball and play favorites, then all it has to do is keep doing what it is doing. This could very well be a long, hard, bitter budget season with big-time consequences in 2010.


MPW Interview (Updated)

I am the subject of the Examiner's three-minute interview today.

Update: My friend Hans Riemer posted this comment on the interview:

I read MPW all the time. It's a great blog. But I'm a little concerned that Pagnucco gave the Examiner a photo with sunglasses. I mean who does that?? What does Pagnucco have to hide? Maybe it's time for someone to watch the watcher...
That's what I get for making fun of his Facebook profile picture with Obama!


Is This Really Stimulus?

The Post wrote a short article on County Executive Ike Leggett's stimulus proposal on Friday. But in scrutinizing the details, we have yet to find where the "stimulus" is!

Here are the eleven components of the proposal from the county's press release:

1. Increase Local, Small Business Reserve Program (LSBRP) gross annual sales thresholds for local small businesses in the wholesale, retail and services sectors to $5 million from the current levels of $2 million for wholesale businesses or $2.5 million for retail goods and non-construction services, and to $14 million from $7 million for construction services and manufacturing. Also proposed is to increase the employee complement limits from 15 to 30 for wholesale and retail businesses, from 20 to 40 for manufacturing businesses, and from 25 to 50 for businesses in the service and construction sectors.

2. Increase the required percentage of Local, Small Business Reserve Program (LSBRP) participation in annual contracting from the present level of 10% to 20%.

3. Generally, delay up to 18 months, the effective dates of new legislation and regulations that have a substantial economic impact on business.

4. Allow, upon request, deferral of payment of permitting fees and impact taxes for a period of up to twelve months from their current due date.

5. Increase permit application expiration period to eighteen months for those permits associated with new residential and commercial construction.

6. Increase expiration period for inactive building permits to twelve months.

7. Extend the validity period for existing Adequate Public Facility reviews from five (5) years to seven (7) years.

8. Provide an economic and fiscal impact analysis as part of any legislation or regulatory change. The analysis to include an assessment of the impact on both the County and the parties being regulated.

9. Unbundle large County contracts. County requirements that have traditionally been bundled together for administrative and cost savings benefit should be scrutinized as candidates for unbundling.

10. Create a Local Business Networking Forum to provide networking opportunities for small businesses to connect with potential partners.

11. Hold business fairs in the evenings and/or weekends at several county locations, such as the Regional Services Centers. Limit participation to small businesses with annual revenue of $5 million or less.
Items 1 and 2 are legitimately helpful since they steer more money to local and small businesses (although perhaps we should have been doing this all along). But can anyone tell me which of these other measures actually create jobs? Item 4, which delays impact tax payments, may actually slow down the county's ability to build roads and schools. Item 7 prolongs APF reviews for development projects, enabling a developer to sit on a project longer and perhaps leading to delayed construction. Item 8, requiring fiscal impact analysis, is already essentially performed by county staff on new bills. And items 10 and 11, which set up networking forums and business fairs, are already performed by the county's Chambers of Commerce. Not a single new job will be created by Items 3 through 11.

The County Council has already moved on real stimulus by jump-starting a number of state projects through issuing liquor bonds. Further borrowing to finance transportation work would lead to more job creation and more long-lasting investment than any of the items above. (Perhaps the county should start by resurfacing the streets in the neighborhoods destroyed by WSSC.)

And finally, this proposal double-crosses the county's workers. The school employees just gave up raises totaling $89 million for the purpose of deficit reduction. Instead, most of that money will now be used to finance the above package that will cost $50 million in delayed revenues according to the Post. Lost employee raises will definitely have a negative impact on the economy, and now they will be replaced by a costly "stimulus" proposal that may not create a single new job.

Deferred revenue, little or no job growth and wasted county employee wage concessions. I guess I have to give this proposal credit for one thing: multi-tasking!


Sunday, December 21, 2008

New Report: Maryland Budget Situation "Devastating"

The Maryland Budget and Tax Policy Institute just issued a new report on the state budget. Its conclusions are as dark as can be imagined.

The main points of the report are:

1. Economic growth in the state "has all but ground to a halt and has perhaps now reversed." Consumer spending, the housing market and the retail sector may not have hit bottom and job losses are likely.

2. The state budget deficit now stands at $391 million for the current fiscal year (which ends on 6/30/09) and $1.87 billion for the next fiscal year.

3. The state's Spending Affordability Committee's recommended increase of 0.7% is the lowest hike in its 25-year history and would fall well short of inflation. The committee recommended reducing the state workforce by 1,000 positions. Currently, there are 3,300 vacant positions not including legislative and higher education employees.

4. The employee furloughs recommended by the Governor will only contribute less than 9% of the amount needed to balance the state budget.

5. The authors write:

The spending cuts needed to address budget gaps of this size would lead to a catastrophic threat to state programs and Maryland's most vulnerable families and citizens... An all-cut solution to the budget may not be practical. It's time to re-open revenue options as part of a comprehensive budget solution.
This last bit of advice is unlikely to be heeded. The vast majority of the state politicians I talk to agree with Senator Nancy King (D-39), a member of the Senate's Budget and Taxation Committee, who recently told the Gazette, "There is absolutely no interest in any taxes at all."

That sentiment will prevent the state from doing anything about its Crisis in Transportation. And now we will see its impact on education, health care and public safety, which together account for 83% of the state's budget. We are about to find out what "devastating" really means.


Friday, December 19, 2008

Ike Leggett's Letter to County Employees

County Executive Ike Leggett sent the following letter to county employees last night.

Dear Fellow County Employee:

On behalf of nearly one million Montgomery County residents, I want to thank you for all that you are doing on behalf of our County.

Montgomery County is a great place to live, work, play, raise a family, and grow a business. Your professionalism, dedication, and commitment to excellence help make Montgomery County one of the finest communities in the nation.

You are a valued member of Montgomery County’s team. That’s why I want to share directly with you information about the enormous challenges we are facing.

The County must resolve our current economic difficulties, caused by the housing slump, the national recession, and the State’s budget crisis. As with all local jurisdictions, Montgomery County faces a large budget gap between our projected resources and the services we expect to provide for the next fiscal year that begins July 1, 2009. We now expect that shortfall to be at least $500 million. And this figure does not include possible reductions in state aid for Montgomery County that have yet to be decided. The state has just doubled its previous estimates of its shortfalls for this fiscal year and next. Also, we do not yet know when we’ll see the “bottom” of our nation’s economic crisis.

Last year, County residents received significant state and local tax hikes. With the hardships many families are facing, we cannot impose a further burden on them. That’s why I have pledged not to increase taxes again. This means that the County’s budget recommendations for next year, which I will release in March, will include substantial reductions in projected spending.

No one could have anticipated the extent of this current economic crisis, but you have been a partner over the first two years of my administration as I have worked diligently to reduce County government agency spending and to provide a budget plan that is sustainable not only for the short term, but for our long term futures as well. From a 14 percent increase in the year before I took office, I reduced the budget increase to 6.7 percent and, then, last year, to 1.5 percent. I have initiated a hiring freeze and eliminated 225 positions. My current six-year capital budget increased by only 1 percent compared to an average of 25 percent for each of the previous two cycles.

But these measures are not nearly enough in this current economic crisis.

When the County Council passed the fiscal year 2009 budget last May, there was an $8 million gap remaining for resolution this year. Two million dollars of that gap will be met through better-than-expected savings from our early retirement program and from limiting senior management pay. I have also proposed two possible furlough days for all County government employees to save the remaining $6 million. In the near future, I will inform you whether furlough days are necessary for this current year. I, as well as all my senior managers and department directors, will be furloughed if County employees are asked to make such sacrifices.

The remaining budget gap we are projecting for next year is still daunting. The County Council has just approved $33 million in reductions that I proposed to help reduce spending for this fiscal year. This savings would be applied to help with our $500 million gap for FY 2010. Still, we have a long way to go to make up the projected shortfall, which may further increase due to additional state budget reductions and the ongoing national economic downturn.

Most recently, I asked all County departments for a second round of reductions from the original proposed budget levels for the next fiscal year. I am asking for a 7 percent reduction in non-Public Safety tax-supported departments, 5 percent for proprietary funds, and 3.5 percent for Public Safety departments and the Department of Health & Human Services.

I know that none of this is easy for you and your family. But Montgomery County is not immune from the current economic downturn.

I’m confident our County will weather these difficult challenges – and ultimately come out far stronger. It won’t be easy, but working together we can make it happen.

I will stay in regular touch with you as things develop. And I hope you won’t hesitate to contact me at

I wish you and yours a happy, healthy and safe holiday season.

Isiah Leggett



By Marc Korman.

At December’s Maryland Democratic Party meeting, the Party’s 2008 Election Report was distributed. The Governor affectionately referred to the numbers within as PartyStat, in line with his various initiatives through the years like StateStat and BayStat to use numbers to improve government’s effectiveness. The numbers are impressive.

Maryland has not gone Republican since the Reagan landslide of 1984 and, of course, Obama got our 10 electoral votes. 1,628,995 Marylanders voted for Obama, an increase of 294,526 voters from Kerry’s share in 2004. In fact, Obama increased on Kerry’s share of the vote in every county in the state. Here in Montgomery, the increase was 5.6% (40,508 voters). The largest increases in the Democratic column were in Charles County (11.8%, 14,281 voters) and Frederick County (9.3%, 14,510 voters).

Maryland is not thought of as a battleground in presidential elections, but it is thought of as an ATM. We maintained our ATM reputation in 2008, providing just over $19 million in donations to the Obama campaign. At the same time, the state party raised $2.9 million.

But Maryland’s contribution was not just financial. Marylanders also gave their time and energy to the winning effort. The state made 1.4 million phone calls to battleground states and sent 3,600 volunteers to Pennsylvania and Virginia during the last weekend of the election. 2,852 Marylanders actually moved to battleground states during the election. Maryland projected the greatest effort for the Democrats to other states except for California, which has 30 million more people and almost 6 million more registered Democrats. According to the Governor, the effort of Marylanders in battleground states was recognized by the governors of Pennsylvania, Virginia, Ohio, and elsewhere.

Given the success of the Ficker Amendment, it was not all sunshine and roses for Democrats in Maryland. But at the presidential level the state really came through for Barack Obama. To all of you who were a part of these efforts, whether it was writing a check, crowding into an Obama office to make phone calls, dialing from home, or hoofing it in Virginia or another state, thank you.


Thursday, December 18, 2008

Maryland State Santa

From AFSCME Maryland.


Long Knives for Franchot, Part Four

The Knives of Annapolis are getting longer every day for Peter Franchot. But L’enfant Terrible of Takoma Park may just stick it to his enemies before they stick it to him.

Peter Franchot was first elected to the House of Delegates in 1986. So what did he do? He immediately ran against then-freshman Congresswoman Connie Morella in a “notably aggressive” campaign. Franchot then embarked on a long career of press-hounding, glory-seeking and blood-feuding (especially with former pariah Delegate Dana Dembrow). After he was re-elected to his fifth term in 2002, Franchot became hungry again for higher office. And he soon found a convenient target: the increasingly erratic Comptroller, William Donald Schaefer. Franchot quickly began dogging Schaefer and capitalizing on his every mis-step. Here is just one example: shortly after Schaefer criticized a McDonald’s employee for not speaking English, Franchot organized a news conference at which Latino leaders and Democratic legislators denounced him. Franchot’s surprise win in 2006 was the product of four years of courtship of the labor, environmental and minority communities: the heart of Maryland’s left.

Franchot has never lost his edge and remains the favorite against any rival. Here’s why.

1. Franchot is the only statewide candidate for the office.
Prior to 2004, then-Delegate Franchot was known only in Montgomery County and mainly in his home turf of Takoma Park. But his campaign against Schaefer and his crusade against slots have turned him into a true statewide figure. Only Governor O’Malley and the two U.S. Senators are better known than Franchot. Jim Smith, Brian Feldman and almost every other possible contender are local or regional candidates at this point who must work to build name recognition outside their home areas.

2. Franchot has never stopped running for Comptroller.
Consider this: since being elected, Franchot has raised a total of $1.1 million – nearly equal to the $1.6 million he raised during the previous four years. He has retired nearly all of the $750,000 home mortgage debt he incurred in his run and has spent $223,767 on salaries for campaign staff through 10/24/08. That’s right – he has been paying campaign staff ever since his election. One of his salary recipients was none other than Scott Arceneaux, the former campaign manager for Doug Duncan who later headed Marylanders United to Stop Slots. Arceneaux received $15,000 from Franchot in January and February 2008 before joining the anti-slots campaign (and launching the ad that was so hated by Annapolis Democrats).

3. Franchot’s press skills far exceed any opponent.
This is obvious but also extremely important. Franchot understands how to work the press better than any other politician in Maryland. He is always ready with a great quote and is constantly creating a story – exactly the things that reporters love. Do Democratic primary voters really care that he has offended Big Daddy? Of course not – all they know is his name. And that is more than the vast majority of them know about any of his potential opponents.

4. Franchot can avoid responsibility for any problems.
The leaders in Annapolis have been making an unusually large number of tough decisions over the last two years – raising taxes, cutting spending, calling for slots – and there is more to come. But Franchot need not sully himself in the dirty details of it. He can merely stand on the outside and criticize the unhappy outcomes. Are you a moderate Democrat in the Baltimore suburbs who disliked the special session’s tax hikes? Peter Franchot, who has criticized the special session since Day One, agrees with you. Are you a liberal in Montgomery County who dislikes spending cuts? Peter Franchot, who called for a blue-ribbon commission instead, agrees with you. Are you a slots opponent? Of course, Peter Franchot is on your side. Who cares about whether Franchot has genuine alternatives for closing the state’s budget deficits? Such tactics infuriate Franchot’s enemies (especially Big Daddy) but they make for great politics.

5. Franchot’s strength in the Washington suburbs is tough to overcome.
In the 2006 primary election, Franchot received more votes from Montgomery and Prince George’s Counties (111,912) than did Janet Owens (60,088) and William Donald Schaefer (38,154) combined. No Baltimore-area politician will be able to beat Franchot in the state’s two largest Democratic jurisdictions. As of 10/31/08, there were 589,064 registered Democrats in Baltimore City and Baltimore County vs. 696,537 in Montgomery and Prince George’s Counties. Another fact: of the 202,122 newly registered Democrats between 10/31/06 and 10/31/08, 46% came from Montgomery and Prince George’s. Doug Gansler’s victory over Stu Simms proved that a candidate from the Washington suburbs could finally defeat a Baltimore candidate in a statewide race. Peter Franchot, who currently has more statewide name recognition than does Gansler, could very well prove that again.

6. His potential rivals may already be too late.
Franchot effectively started his race against Schaefer at least two years prior to election day. He needed that time to build his case against the incumbent and form alliances outside his home jurisdiction. Neither Jim Smith nor Brian Feldman nor anyone else has begun a similar effort – yet. If anyone wants to take on Franchot, they must obtain the support of the Governor and Big Daddy and start raising money and making the rounds as soon as possible. It will take that long to mount a winning challenge against one of the most hyper-competitive campaigners the state has seen in a long time.

And Franchot’s fanatical nature may be his greatest edge. One of my informants told me, “I’m done betting against Peter Franchot. I’m not saying he’s a lock to win. But every time I’ve bet against him, I’ve been wrong.” Another longtime political observer told me, “A race against Franchot is not for the faint of heart; he is fearless and will go down fighting.”

Peter Franchot’s next election campaign is well underway. Phase One was his opposition to the unpopular special session. Phase Two was the anti-slots campaign. Franchot has already established his message: Don’t Trust Annapolis Politicians. He will use it against anyone backed by the Governor and Mike Miller. He will argue that his opponent – whoever it is – is a “machine politician” under control by “gambling interests.” He will implore the Democratic primary electorate, a group well to the left of the general electorate that voted for slots, to retain him as its protector. Franchot's campaign will claim that only he can be trusted to look out for the poor, the weak and the victims of poorly-conceived tax hikes and spending cuts.

And so there are many long knives waiting for Peter Franchot in Annapolis. But the Comptroller just may have the longest – and the bloodiest – knife of them all.


Wednesday, December 17, 2008

Fall of the Blogs

Two of Maryland’s most prominent blogs stopped publishing last week. We remember both of them today.

Free State Politics was a member of the first wave of left-wing political blogs in Maryland. Founded in March 2005 on Blogger, it was eventually taken over by contributor Isaac Smith and moved to a separate site. From the beginning, FSP was intended to be a community blog. Any reader could start an account and begin writing. If the content was really good, the blog’s moderators had the ability to promote it to the front page.

And the content was often a cut above. In addition to Isaac, the site featured MCEA Board Member Eric Luedtke, Annapolis blogger Paul Foer, Crablaw author Bruce Godfrey, the impish “Gilbert” from Takoma Park and the virulent “Lefty” from parts unknown. Through the fall of 2007, FSP was often the most-read political blog in the state. And it spawned a direct challenger: Red Maryland, a conservative multi-author blog with its own roster of dogged and occasionally deranged bloggers.

But on Wednesday, Isaac Smith posted this:

I've been doing this unofficially for a while now, so I might as well make it official: I'm putting this blog on hiatus for the foreseeable future. Free State Politics has been a labor of love for me for the last year and a half or so, but it's not something I can attend to with anything near the level of commitment it deserves. It was easier when it was a side project I was doing during grad school, but trying to fit in blog posts (and good ones, at that) with my current work situation -- i.e., underemployed and trying to find a better job in the midst of a world-historical recession -- just isn't feasible anymore. I want to thank my other co-bloggers, in particular Eric, Andy, OnBackground, and Bruce, for all their contributions, which usually were better than my own. Hopefully soon I (or someone else) can give this site a reboot; until then, enjoy Maryland Politics Watch, Lost on the Shore, and other Maryland political blogs out there.
Thanks for the news, views and fun, Isaac.

PolitickerMD ceased operations last Friday. As we wrote a year ago, PolitickerMD was started in late 2007 as part of a network of state political news sites owned by New Jersey real estate millionaire Jared Kushner. These sites looked like blogs, but actually functioned more like online MSM sites complete with paid staff.

According to Politico, the Politicker network is downsizing from seventeen states to six states. One of the lost states will be Maryland. Politico reports that the dropped sites will remain online but not be updated. Kushner is even leaving open the possibility that one or more of them might be revived if justified by financial considerations.

PolitickerMD had great potential but never lived up to it. On the positive side, it was truly a statewide site. Its reporters went into every corner of Maryland and reported on events from Annapolis power struggles down to town council elections. On the negative side, its stories rarely contained any perspective. Many of them were little more than short snippets, quick quotes or links to Post or Sun articles. But they did provide fodder for commentary by others.

And so not even the blogosphere is safe from the historic dislocations in the media that we are witnessing. For-profit sites are buffeted by the same economic forces that are battering print and television journalism. Amateur sites are plagued by the demands of time, work and real life that consume the rest of us.

Goodbye, FSP and PolitickerMD. We’ll miss you. But we also eagerly look forward to the next generation of Maryland blogdom.


Long Knives for Franchot, Part Three

Baltimore County Executive Jim Smith is a logical choice for Governor O’Malley and Senate President Mike Miller to launch a challenge against hated Comptroller Peter Franchot. But what if Smith decides not to run? Is District 15 Delegate Brian Feldman the answer? We asked our spies and, as usual, they did not disappoint.

Brian Feldman is a two-term Delegate from Potomac. When he first ran for the House in 2002, three of the four members of the district delegation (Senator Jean Roesser and Delegates Jean Cryor and Richard LaVay) were Republicans. Democratic Delegate Mark Shriver had just lost a Congressional primary to then-District 18 Senator Chris Van Hollen. In the general election, Feldman finished just 683 votes behind Cryor, then a two-term veteran and the sole surviving Republican. In his second term, Feldman earned an Economic Matters subcommittee chairmanship and became Montgomery County’s House Delegation Chair in 2007. In our MPW poll, Feldman was voted the 15th-most influential elected official in Montgomery County.

Feldman is an unusual figure in this county because he has admirers across our political spectrum. Moderates and liberals alike praise his intelligence, patience and hard work. In fact, despite my best efforts, I have not located anyone who despises him. (Trust me – that is rare for a politician.) As a CPA and a tax lawyer, he is extremely well qualified to be Comptroller. His reputation as a consensus builder would make him an attractive alternative to the Governor and Big Daddy, who above all do not want more Franchot-esque eruptions.

So does Brian Feldman have what it takes to defeat Peter Franchot? Here is what four of my best-connected informants have to say:

Spy #1:

Basically, Brian has to tap into the vast hatred that Peter has in the Democratic Party right now. Also, Jim Smith has to NOT run. So, yes, Brian could win. If Jim Smith did not run, O’Malley would gladly put Brian (or any reasonable person) on his ticket. Being from Montgomery County, Brian would be best. Brian would not need to raise as much money as Peter, he would just need to be on Martin's Team.

One other thing, Brian could develop a really good argument -- governmental efficiency. He could expand the portfolio of the Comptroller to include internal management audit control, sort of an “Inspector General” type function. He could make a lot of hay by training his sights on specific examples of governmental waste starting with the Comptroller’s Office. This could be embarrassing for Peter. He could also go after auditing abuse - always a perennial favorite.

Of course, Peter is still the favorite to win because the voters like him. But the election is still a long ways off.
Spy #2:

I can’t believe it really. It certainly is true that Brian has a good background for it, given his time in the legislature and the fact that he's a lawyer and a CPA. For a legislator he's a better than average fundraiser, but would have to step it up big time for a statewide run.

No doubt Peter has angered many in the Democratic establishment, but how many of those people will really pony up with time and money to help Feldman?

Peter did a lot to grease the skids a few years prior to his run by rallying up the progressives. Brian would need to make tons of friends and can’t just be the anti-Peter.

Now I tend to be a skeptic, but I'm guessing it’s just a crazy rumor, and if I were Brian, I wouldn’t confirm or deny it. I would just smile and be glad that people were talking about me in a good light. The more you get talked about in political circles about “big” things, the slightly more likely that good things happen.
Spy #3:

Personally, while I think Feldman would be the best fit for Comptroller based on his background, experience, smarts and temperament, I’d like to see him as Speaker, Majority Leader, or Economic Matters Chairman -- and I don’t think any of these are out of the question. He presents a strong viable alternative to some others seen as being in the running for those spots -- and his leadership talents are very, very strong. I don’t think that it hurts Feldman to be mentioned in the article. In fact, I think it helps brand him as a viable statewide leader overall, and gets people thinking about him for a near to mid term leadership spot.
Spy #4:

O’Malley should be careful about encouraging challengers to Franchot for Comptroller, since it could just persuade Franchot to run against O'Malley.

Feldman is one of several bright, smart, handsome young men from Montgomery County who don’t want to wait forever to move up the ladder but may have to wait for a long time, since Chris Van Hollen has to wait to run for Senator Mikulski’s seat and Rob Garagiola has to wait to run for Chris Van Hollen’s seat.

Basically I think it would be a mistake for Brian to give up his House seat for a long-shot statewide race right now, unless he’s really prepared to end his political career at this relatively early stage.
Brian Feldman has many supporters in the county who believe he could move up in Annapolis. They would hate to see him leave politics prematurely. But if he actually became Comptroller, he would excel in the job. Would the voters understand that? Not if Peter Franchot has his way. And the incumbent Comptroller is not done yet – not by a long shot. We conclude in Part Four.


On Political Pulse

Michael Busch, the Speaker of the Maryland House of Delegates will be on the "Political Pulse" TV Show on:

--Thursday, December 18th at 9:00 p.m.;
--Tuesday, December 23rd at 9:30 p.m.;
--Thursday, December 25th at 9:00 p.m; and
--Tuesday, December 30th at 9:30 p.m.

Political Pulse is on Channel 16 TV in Montgomery County.

Speaker Busch will discuss the economy, the deficit that the State is facing, the upcoming 90 day Legislative Session which starts in January, 2009, some issues regarding Montgomery County and what it's like to be the Speaker.


Tuesday, December 16, 2008

Edgerley Resigns at DBED

The Baltimore Business Journal is reporting that David Edgerley, Maryland's Secretary of the Department of Business & Economic Development (DBED), is resigning.

This story does not have as many political implications as David Weaver's resignation, but you do have to feel for Edgerley. Consider the following three events that were not his fault:

1. The colossal anti-union website scandal that started under his predecessors and revealed the fault lines between labor and the O'Malley administration.

2. The slide in the state's business tax climate from 24th to 45th in one year when no other state dropped more than three places.

3. The fact that DBED will now have to take budget cuts and furloughs like every other department in state government.

Given the above (especially item two), selling the state to business might be just as appealing as trying to sell saltwater to fishermen!


What Does Weaver's Departure from Franchot's Office Mean? (Updated)

Maryland Moment is reporting that Comptroller Peter Franchot's Chief of Staff David Weaver has been hired for the same position by Congressman Chris Van Hollen. This is big news but its full meaning is unclear.

David Weaver is one of Montgomery County's smartest and most-respected political operatives. He served as Doug Duncan's spokesman for 12 years and ran a media-friendly political operation for Franchot. My sources singled out Weaver for special praise in my Long Knives for Franchot series, which I have now had to edit. “He’s the last person I would want to go up against,” said one spy who has known Weaver for a long time.

Weaver was one of Franchot's biggest weapons but now he is gone. A staff job for Chris Van Hollen is definitely attractive. But is there more to this? Does David Weaver know something that the rest of us don't?

Update: Delegate Bill Bronrott (D-16) released this statement:

David Weaver is one of the most talented and decent people I have ever met in my three decades in politics and public policy. I spent nearly eight years on Capitol Hill as an aide to the previous Democrat who represented Maryland's 8th Congressional District -- Michael D. Barnes. I know from that experience and from a decade representing part of the 8th District in the General Assembly that Congressman Van Hollen and the people he represents will be extremely well served with David Weaver as Chief of Staff.
Here's what some of our undercover informants had to say:

David is going back to his legislative roots. He’s a smart guy and will thrive on the Hill. Leaving “Peter the Isolated” for “Chris the Hero” is clearly a big step up for him.

Weaver was much too smart to be working for the Comptroller. Guess he had to because there wasn't anything else at the time, but it is a huge win for Van Hollen to get someone of his caliber.

David has outstanding political instincts and has likely concluded that the long-term upside potential of hitching his wagon to the Franchot show horse is exceedingly limited while the downside exposure of being tied to, and tainted by, this guy is huge.

David Weaver is very talented in managing both political and communications strategies. Despite what many think, they are separate disciplines. David is unusual in that he can do both at a very, very high level. This is a real loss for Peter Franchot. Peter's formula for success relies on generating ink and stirring the political pot with a populist message. It's a house of cards, a bubble that so far he's been able to stay on top of. I wonder if David's departure is the first step in the bursting of the Franchot bubble. Never count Peter out, but this is a big loss. If you're Weaver and Van Hollen calls, why wouldn't you take the job? As head of DCCC and liaison to the White House, Van Hollen will be right in the middle of the political intrigue at both ends of Pennsylvania Avenue.


Maryland's Request for Stimulus Money

Following is a letter from Governor Martin O'Malley to Congressman Chris Van Hollen requesting federal stimulus aid. The Governor sent identical letters to the rest of the state's Congressional delegation.

State of Maryland
Office of the Governor

December 8, 2008

The Honorable Chris Van Hollen
U.S. House of Representatives
2412 RHOB
Washington, DC 20515-2008

Dear Congressman Van Hollen:

Last week, I had the opportunity to join governors from across our nation at a bi-partisan meeting with President-Elect Barack Obama and Vice-President-Elect Joe Biden. I am pleased that the incoming Administration has moved quickly during the transition process to secure input from the nation’s governors with regard to the economic challenges facing the states.

We discussed, in large part, the fact that governors continue to be faced with the unfortunate necessity of making strong cuts to programs that their constituents need the most and looking to their own workforce to make sacrifices to this end. One of our requests was that, in beginning work on an economic recovery package, the new Administration work with the Congress to provide governors with maximum flexibility to respond to the very unique needs of their communities.

Specifically, we encouraged them to consider some of the following priorities as they collaborate with you:

An expansion of unemployment insurance – to preserve workers’ expiring benefits;

Medicaid funding (in the form of increased Federal Medical Assistance Percentage) for states so that they can continue to provide health care to the growing populations that need it in these difficult times;

An aggressive investment in the kinds of “ready-to-go” infrastructure improvement projects – construction and/or repair of roads, bridges, tunnels, transit systems, parks, sewers, energy efficiency upgrades, information technology systems, (health IT, public safety and other services) and schools, to offer only a few examples – that can immediately put America back to work in a targeted and efficient manner; and

A flexible block grant to states that can be used to craft the most appropriate solutions to the very unique challenges they face.
As you prepare for the start of the 111th Congress and continue efforts to address the national economic crisis, I wanted to provide you with an update on the changing dynamics impacting Maryland’s transportation, public works and housing infrastructure programs. Several pieces of federal legislation are proposed for expedited action in January, many of which would provide much needed relief to the strained transportation system, provide the resources necessary to initiate construction of priority projects in our State, and create hundreds of new jobs to recharge the flailing state and national economies.

Speaking specifically to our transportation needs, due to declining revenues this summer and fall, the Maryland Department of Transportation (MDOT) made budgetary deferrals of over $1.1 billion to the State’s six-year transportation improvement program. Prolonged impacts of vehicle titling requirements and motor fuel taxes will require us to make even deeper cuts into the capital programs for transit and highways as well as pare back the operating budgets of all MDOT agencies. We therefore stand ready to make immediate use of federal funding, should it be provided to states through Congressional action.

MDOT has identified at least 50 projects with a total estimated cost of more than $310 million that could be underway or advertised within 180 days of enactment of federal infrastructure funding provisions in an economic recovery bill. Among these projects are $100 million in highway resurfacing, $50 million in bridge rehabilitation, and $15 million in safety improvements that would provide guardrails, traffic signal upgrades and accessibility improvements. Another $18 million could go to Baltimore area transit needs, $48 million to MARC rail projects, and $83 million for aviation. Furthermore, full funding is needed for the Army Corps of Engineers Operating and Maintenance budget to ensure that critical dredging projects in the Chesapeake Bay do not slip, endangering maritime safety, the flow of commerce and the environmental health of the Bay.

Moreover, the Maryland Department of the Environment (MDE) has identified more than 100 much needed water and wastewater infrastructure projects with a total estimated cost of nearly $1 billion that could commence construction within the required time frame. Many of these projects will significantly and directly benefit the Chesapeake Bay by reducing nutrient pollution to the Bay and its tributaries. They include construction of new or upgraded wastewater treatment plants, installation of enhanced nutrient removal technology at wastewater treatment plants discharging into the Bay or its tributaries, the replacement and upgrade of sewer lines with inadequate capacity to reduce sewer overflows and storm management projects to reduce runoff of pollutants into streams and other water bodies.

In addition, the Maryland Department of Housing and Community Development (DHCD) has identified a range of infrastructure projects nominated by nine small local governments as well as 14 affordable rental housing projects that will help address critical needs across the State. The finance and construction of both types of activities has been severely limited in the wake of the ongoing challenges in the financial markets. The infrastructure projects, which total $100 million, range from water and sewer projects in BRAC-impacted Aberdeen to street improvements in Berlin to a police station in Laurel. The affordable rental housing projects total $119 million in construction costs and would create 1,080 units to serve individuals with disabilities, seniors, and families. These developments include projects that will revitalize public housing, build capacity in BRAC-impacted jurisdictions, and preserve existing affordable housing units. The projects will help address Maryland’s projected shortfall of 151,000 affordable/workforce rental housing units while creating an estimated 1,600 full time equivalent positions during construction stimulating $66 million in wages and salaries.

Not only would an infusion of funds keep hard-working people employed, it would allow us to deliver infrastructure improvements that will last beyond the immediate economic crisis.

We urge you to give us the tools to initiate work expeditiously, by waiving matching requirements and according us the flexibility to apply the funds in line with our needs as envisioned in the Consolidated Transportation Program for federally eligible highway and transit projects. For our part, I pledge these funds will be administered in a timely and accountable manner; if we cannot activate these “shovel ready” projects in the time allotted by statutory rules, we will return the money to the federal government. But make no mistake: I have no doubt about our ability to deliver these projects.

Thank you for your continued dedication to the State of Maryland and for your strong support during a time when everyone stands ready to pitch in for the greater good of the nation.


Martin O’Malley