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Counties Protest Possible Cuts

A dozen county leaders from across Maryland convened in Annapolis yesterday to warn against the consequences of cutting education funding and other local aid as a solution to the state's projected $1.7 billion budget shortfall.

Gov. Martin O'Malley (D) said this week that counties could take a big hit if lawmakers do not pass his revenue package in a special session that starts Monday. Some legislators have argued that counties should be part of the solution, given state aid to local government has swelled in recent years to about 40 percent of Maryland's general fund.

But several county executives and other local leaders said at a news conference yesterday that they would be forced to raise property taxes to make up for reductions in stae aid.

"Shifting the responsibility to local communities is not the answer," said Montgomery County Executive Isiah Leggett (D).

Raises for most county employees have outpaced those of state workers in recent years, and most counties have healthier reserves than the state, making them an attractive target for legislators.

By Anne Bartlett  |  October 26, 2007; 10:01 AM ET
Categories:  John Wagner  
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Comments

Hey, either we all share the pain in the Governor's proposal, or we all share the pain in our local jurisdictions, its an either/or proposition and I think the Governor's plan is the best we're going to get with Mike Miller as Senate President!

Posted by: RCD | October 26, 2007 10:29 AM | Report abuse

Of course they couldn't reduce spending now could they? Yup we'll have to raise taxes.

Posted by: FLvet | October 26, 2007 10:37 AM | Report abuse

Stop! Stop! There IS NO DEFICIT! When are we going to wake up and scream at these politicians to stop lying to us? They can continue to fund ALL of the current programs without raising taxes. They just aren't satisfied with that. People, don't let this happen!

Posted by: jj | October 26, 2007 10:41 AM | Report abuse

Here's a slam dunk, save $2,400,000,000 of tax payers dollars by stopping the construction of the ICC toll road.

Posted by: Donny | October 26, 2007 11:21 AM | Report abuse

The "deficit" is in a projected budget(the present budget is balanced till June 30, 2007) that INCREASES 8.5% over the present budget. Leggett who has been advocating increases in the state sales, income, corporate and gasoline taxes and opposes property tax limits now worries about some controls on spending. Keep in mind that aid to counties has increased from 32% of the state budget just six years ago to 40% today. I've turned in l3,000 signatures to place a charter amendment on the ballot in 2008 to make it more difficult to exceed the charter property tax revenue limit. Post editors and Leggett will oppose this charter amendment. As of now these knee-jerk tax increase supporters just don't want to talk about that charter amendment.

Posted by: Robin Ficker of Robin Realty | October 26, 2007 11:32 AM | Report abuse

As reported in today's Examiner:

"Montgomery Parks and Planning Department officials said the demands of overseeing the Intercounty Connector are so great they need four additional staff members who can focus exclusively on the 18-mile highway project. Planning Board members unanimously approved a request Tuesday from parks and planning department leaders to ask the County Council for a $206,000 special appropriation to fund the four one-year contract positions."

So now Montgomery County will have to cough up another $206,000 so that O'Malley can build the ICC. Yet O'Malley wants to cut aid to the counties.

Posted by: Julie Martin-Korb | October 26, 2007 11:37 AM | Report abuse

The ICC funding does not come from the general fund. The general fund is where the alleged "deficit" is located. Because there's no link between the general fund and the ICC, cutting ICC funding (much of which is Federal transportation $$ that can't be shifted to the state general fund) won't help the "deficit" one bit.

Furthermore, there are (or where when Governor Ehrlich left office) sufficient funds and/or anticipated revenues to fund ICC construction.

Posted by: MoCo Voter | October 26, 2007 11:45 AM | Report abuse

MoCo Voter, you are wrong. Here is the actual quote from the ICC Financial Plan, available at http://www.iccproject.com/PDFs/2007ICCFinancialPlanFinalS-21Sep07.pdf

"The State of Maryland has committed $264.9 million to the ICC Project to be paid out of the General Fund of the State Treasury."

Posted by: Julie Martin-Korb | October 26, 2007 12:02 PM | Report abuse

Here is another example of the lies and misinformation spread by Pro-ICC salespeople. Some of it may be unintentional, but the facts of how costs are continually rising past the quoted $2,400,000,000 are readily available. Tax payers will foot every last dollar of that cost. And indeed hundreds of millions of that will come directly from the Maryland General Fund. The pro-ICC lobby is really pushing this like used car salesmen. Unless we counter this crap and speak up...they will prove that you CAN get blood from a stone. Our wallets again.

Posted by: Donny | October 26, 2007 12:30 PM | Report abuse

I stand corrected, and I apologize for the inaccuracy of my post. Thanks to Julie Martin-Korb for the link. As she noted, approximately 11% (264.9 million) will come from General Fund revenues (of which $50 million has already been spent).

My general point, however, still holds true - killing the ICC won't net $2.4 billion for the general fund, because 89% of the funds are from other sources (again, mostly Federal transportation funds). At best, you'll net about $215 million, and that assumes that you won't have any other off-setting transportation projects to deal with the traffic that the ICC would have handled.

I've never argued that the ICC would be free. My point is that the ICC isn't a major driver of the general fund deficit, and killing the ICC isn't a major solution.

Posted by: MoCo Voter | October 26, 2007 1:18 PM | Report abuse

Fair enough, sir. However, MoCo Voter, while $264,900,000 is only a small part of the taxpayers' $2,400,000,000 ICC burden - it's not just a drop in the bucket either. Contributing to the solvency in the Maryland General Fund is only a collateral-affect of cancelling the ICC.

The ICC toll road is a problem unto itself - requiring its own solution. The price of this unjustified project just keeps growing and its more and more work just to extract the truth about how much we will end up paying for it.

In 2006, the construction cost was estimated at $2,400,000,000. What is it up to now? Its not scheduled to begin collecting its $7 each way toll until 2012. You could hardly blame me if I begin to doubt if the toll will be limited to $7. Is $10 or $12 to be expected? Can you imagine paying $24 per round trip to drive from I-95 to I-270?

Its a personal question, but with a barrel of oil nearing $100, I'm sure most of us will not want to pay the price of ICC admission. Unfortunately, none of us will have a choice, but to pay up for the construction costs.

I've already agreed to disagree with a few pro-ICC folks, but just consider the above some fiscal food for thought. It goes for Virginians and District residents too - you will also pay for the ICC construction via your federal taxes.

Posted by: Donny | October 26, 2007 2:32 PM | Report abuse

Montgomery County government is bloated with inept, do-nothing workers. They need to stop negotiating with the union and pay the workers what they are really worth, which isn't much. Generally, the only county workers who are worth what they are paid are the police, the firemen (and firewomen), and the road people (DPWT). Start by firing 80% of the workers in Health and Human Services (HHS) and by firing at least 75% of the managers. There are way too many chiefs and not enough indians in Montgomery County government.

Posted by: Cut It | October 26, 2007 5:59 PM | Report abuse

Just stop the ICC and make local roads more efficient. Contrary to the few pro-ICC folks who stand to make money off the deal, the ICC is not necessary and it will remove the reason many of us love to live in maryland.

Posted by: Robert | October 26, 2007 9:03 PM | Report abuse

First of all I'm not even fully convinced that this whole deficit thing even exists. And if it does, why is it my problem?

Posted by: Why Me? | October 26, 2007 9:29 PM | Report abuse

Shifting the responsibility to local communities is not the answer," said Montgomery County Executive Isiah Leggett (D).

Most of the deficit is a result of the cost of schooling illegal immigrant children whose parents pay NO income tax at all. The irony of this is that Leggett (and his predecessory, Doug Duncan), along with the Montgomery County council, are responsible for making Montgomery County into a magnet for illegal aliens. O'Malley has also greeted illegals with open arms, even going so far as appointing the director of illegal alien promotion group CASA De Maryland, Gustavo Torres, to his transition team.

Posted by: Donald R. | October 27, 2007 9:21 AM | Report abuse

I have yet to read an objective, thorough explanation of what happened to the alleged surplus in the state budget that OMalley inherited? I'm a registered Dem. but if the current legislators vote for this proposed tax package, I may have to go over to the other side.

Posted by: BlueDawg | October 27, 2007 9:31 AM | Report abuse

Great-question..BlueDawg...The-surplus-was-already-committed-to-to-be-spent-by-Erlich.

Actually, the FY2007 budget that chalked up the deficit is Bob Erlich's last budget as governor. Funny, Bob didn't advertise on his way out - that his last budget was insuffiently funded. Its a good trick to play on whoever beats you in an election...and not uncommon. So, O'Malley must clean that mess up (due to Erlich's spending) by cutting spending, and raising taxes.

Summary: Erlich overspending....O'Malley cutting spending. What cannot be cut, must result in extra taxes. Generally, in MD, we pay out bills in full, so we know the tax is coming. The back and forth will be about how much and where will it come from. While I imagine fireworks...and some grandstanding...I figure we'll be dug out of the Erlich-pit in a couple years and can move ahead with O'Malley's vision for MD (whatever is shapes into by 2009). We'll make it though alright, but how well will we feel all depends on the "nitty-gritty" details they need to workout in Annapolis. I suggest we all keep our eye on the ball.

Posted by: Donny | October 27, 2007 8:54 PM | Report abuse

"Ehrlich overspending"? Pass the crack pipe, Donny.

I see that I have to throw the red flag out on you once again. I know you're being paid or blackmailed to put these falsehoods out but you should let your conscience be your guide and stop trying to put a smiley face on O'Malley's tax increase of biblical proportions. The budget is balanced through FY 07-08. O'Malley's grocery list of new spending proposals is what is creating the looming deficit. This is not left over from Ehrlich's term.

Posted by: BG from PG | October 27, 2007 10:19 PM | Report abuse

Donny, your argument makes no logical sense. How could it be that Erlich was the one who overspent if the budget is balanced through 2008 and no new taxes were instituted during his tenure?

That said, I think calling O'Malley's new tax plan one of "biblical proportions" is disingenuous as well. I doubt Joe Taxpayer is going to see much change in their income or property taxes.

Posted by: Liz | October 28, 2007 2:29 PM | Report abuse

Havin'-fun,BG?...Those-facts-may-not-taste-good-to-ya....but-ya-gotta-eat-'em.

Fact:Erlich-raised-spending-every-year-in-office.

Fact:FY2007-which-we-are-still-struggling-through-was-Erlich's.

Fact:The-FY2008-budget-will-be-O'Malley's-first.

Fact:The-$2,400,000,000-ICC-toll-road-was-dead-until-Erlich-and-Bush-scraped-it-up.

Eat-'em-and-weep-BG.

O'Malley-is-no-angel-but-he-showed-Erlich-the-door....as-MD-wanted.

It's-not-easy-being-in-the-political-outhouse-but-its-your-turn-MD-GOP!

Gear-up-for-the-next-election-and-give-the-obstructionism-a-break....

Thanks.

Posted by: Donny | October 28, 2007 4:35 PM | Report abuse

Donny, let me explain this so that even you can understand.

The fiscal year runs from July 1st to June 30th each year. We are already in FY 2008. The Governor submits a budget proposal in January each year for the following FY. The 2008 budget (the current budget) is O'Malley's first budget and includes a modest increase of 2.5%. The budget is balanced through June 30th 2008. Ehrlich's last budget ended in June this year.

Posted by: BG from PG | October 28, 2007 6:41 PM | Report abuse

Well, as usual, the truth of the matter is that this isn't a Democrat problem, it isn't a Republican problem, it's an *everyone* problem.

Back in the late 1990s and early 2000s, when the tech boom had the stock market sailing along, the state was raking in tons of relatively unexpected money through its income taxes, especially on capital gains. As a result, the decision-makers in Annapolis, predictably, spent a lot more money (especially by committing to along-term ramp-up of education spending) and also decided to phase in a substantial income tax reduction (that seemed to go unnoticed by most voters).

As a result of those two decisions (a big increase in education spending and a big permanent tax cut) the state got itself in a structural problem, where the "normal" growth in its programs -- even without trying to expand what services it was trying to deliver -- became too expensive to fund with its existing revenue stream. Add in another serious uptick in the costs of some government functions (most notably health care for Medicaid recipients, as well as employee health care costs) and the situation just kept getting worse and worse.

Governor Ehrlich inherited this problem, and proposed slots as his principal new revenue source to address the problem, along with some budget cuts (yes, by "cuts" I and he both mostly mean slowing down anticipated rates of spending growth) and some raids on special funds -- taking money earmarked for things like road/bridge upgrades, and open space acquisition and pilfering it temporarily for the state's general fund. When the legislature failed to pass slots, these smoke-and-mirror tactics, along with some actual tax increases (including a little-recognized increase in the state property tax rate) were needed just to "patch over" the year to year budget problems through his four year term.

So, what of the "surplus" at the end of the four years? Really, all that happened was that the revenue forecasts were too low -- the "best guess" in Annapolis (and most everywhere) was that the robust economy would slow down in 2005 or 2006, and (basically) it didn't... a white-hot real estate market kept people earning and buying and kept the coffers fuller than imagined. So, the state made it to an election year with a temporary surplus (more revenues than were needed for *that year's budget*) but still a structural problem where the projected growth in revenues failed to keep up with the reasonable costs of continued service delivery. The temporary surplue just allowed a fairly painless patch-over of the structural problem for a couple of budget years -- basically the last Ehrlich budget (FY 07) and the first O'Malley budget (FY 08).

And that is where we are. The state has run out of cash from the one-time overachievement that caused a temporary surplus. It has committed to a new, higher level of school funding, and still is paying a ton of money for its Medicaid obligations... even while still feeling the pinch from its last tax cut enacted when times were really good.


Regrettably, since the "truth" isn't very sexy and doesn't make [insert group you dislike here] look really bad compared to everyone else, it isn't in particularly wide circulation in the public discourse.

Whose fault is it? Probably everyone's. They committed to aggressively funding education with no new revenue source to pay for it, even while accelerating their own mammoth income tax cut... and in the years since have not found the resolve to fix the problem that they all know has been sitting there. Expedient solutions have been the order of the day. Like most days.

They've basically just run out of smoke and mirrors.

Posted by: Nicholas D | October 28, 2007 8:38 PM | Report abuse

Nicholas D, thank you for your detailed and non-partisan explanation. We need more of that here. With that said, I think we should be putting the tons of education funding under a microscope. I already feel the pinch of the 52% from my property tax which goes to education.

Posted by: BG from PG | October 28, 2007 10:07 PM | Report abuse

Exactly - thanks Nicholas. Though we disagree on small interpretive details...but agree on most facts, perhaps we can put an end to a lot of MD GOP O'Malley bashing. While a few Marylanders do not see the wisdom and necessity in providing the best education possible to Maryland's children (yes- even someone else's children), most of us are not ready to begin slashing the education budget...which naturally requires expansion every year. What do these folks expect, when nearly 20,000 families move here during the BRAC transfers?

Posted by: Donny | October 29, 2007 8:06 AM | Report abuse

Yeah Donny, as if O'Malley hasn't done some bashing of his own. But I do agree that there is a need for education in this state, judging by some of your posts.

Posted by: BG from PG | October 29, 2007 1:37 PM | Report abuse

Oh, O'Malley is no angel. I am strongly opposed to his positions on the $2,400,000,000 ICC toll road and slots. He is also a politian, but I would like to see what good he can do once he gets out of Erlich's wake. If no good comes from him... thats what elections are for. Thanks.

Posted by: Donny | October 29, 2007 3:34 PM | Report abuse

What happened to BELIEVE?
BELIEVE the Governor's lies? NOT IN THIS LIFETIME!

The Governor and Maryland elected Officials live sooooo comfortably in their 6-figure worlds. (Too bad for us - most MD citizens only average $40,000 or less.)

As far as performance evaluations go, can readers recognize the past years of inadequate performance our Governor O'Malley (and Mayor Sheila Dixon) has made in maintaining a positive difference for Maryland???

Maryland is the 19th largest state - NOT THE LARGEST - Keeping this in mind, LET US review, students:

This is the largest sales tax increase (from 5 to 6%)in MD history ...

Maryland has the highest crime/murder (38%) rate per (100,000) capita EVER (broken, needs to be fixed)...

Without additional plans to increase Police and Fire protection services on Maryland streets...

Baltimore City has the lowest graduation rate for elementary and high school students...

40% of our city students go on to college... Out of that 40%, 20% (from Baltimore City) are graduating seniors (Help me out here: NO "students left behind" ? )...

Most city schools lack the basic resources (fax machines, copiers, air conditioning, computers, copy paper, etc) to provide effective learning environments to teach students effectively...

ALL sectors of our livelihood will be in jeopardy because citizens will stop spending...

Ma and Pa businesses will lose customers (who won't be able to afford their goods) and will be forced to close...

Mid-Large sized corporations will lose sales. Thus, in order to maintain the bottom line, they will move out of state ...

Self employed persons will be destitute and lay off employees of skill...

Unemployment will be at an all-time high...

MD citizens won't be able to afford their homes and will face foreclosure or rental eviction...

Gas and energy bills will skyrocket causing riots and deaths for insufficient bill payments...

OH - BUT AS A POSITIVE, if you need a lawyer, there won't be any additional sales tax administered - courtesy of O'Malley ESQ.


WAKE UP MARYLAND! THIS IS A TRAVESTY!
THIS IS AN OUTRAGE!

FOR THE SAKE OF A FUTURE POLITICAL PLATFORM IN THE WHITE HOUSE - OUR GOVERNOR IS PULLING THE CARPET FROM UNDER OUR HARDWORKING FEET!

WHY NOT CURTAIL spending? (We teach our kids: If you can't afford that candy bar, you don't get it.)

Where is the system of checks and balances (or) the state's financial books/receipts so I can see WHERE my money has in fact BEEN allocated?

How about both - the Governor and the Mayor - set a positive precedent by taking a 20% annual income cut (on the same lines as a TAX ME MORE) JUST TO show Maryland Citizens how it's done...and to demonstrate that O'Malley and Dixon still have our best interests at heart???

Such a selfless action could win over the hearts of Americans nationwide and politically lock in O'Malley votes for the White House!

anything to help out Maryland, My Maryland?

Posted by: Plan B | November 1, 2007 2:49 PM | Report abuse

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