The Magazine

Doomsday for Maryland?

Martin O’Malley’s budget failure.

May 14, 2012, Vol. 17, No. 33 • By KATE HAVARD
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Annapolis

Photo of Maryland’s Martin O’Malley

Maryland’s Martin O’Malley

AP / Steve Ruark

Minutes before midnight on April 9, the last day of Maryland’s 90-day legislative session, the state budget suddenly and unceremoniously collapsed. The next morning, however, Gov. Martin O’Malley and the Democratic leaders of the Maryland house and senate signed a fallback budget that everybody agreed was what nobody wanted. 

O’Malley, whose achievements as mayor of Baltimore have landed him on short-lists for the Democratic presidential nomination in 2016, indicated his frustration, telling reporters, “I think the people of our state have reason to expect more of our elected officials.”

What the people of Maryland can reasonably expect now are budget cuts. While parts of a budget package passed that night, neither of the bills that included income tax and other revenue increases needed to fund the governor’s budget made it to a vote in both chambers. And once the governor’s proposal was dead, Maryland automatically reverted to a spending plan dubbed the “Doomsday Budget,” which encompasses more than $500 million in cuts, almost $300 million of them from education. It will go into effect July 1 unless the legislature acts to replace it at a special session set for May 14.

O’Malley called the education cuts a “damn shame.” The Doomsday Budget—so called precisely because it slashes the Democrats’ top programs—was never intended to become reality. It was meant to be a prop in a legislative game of chicken that seriously backfired. Now, one question could come back to haunt the ambitious governor, whose aspirations tend toward the city a little south of Baltimore: If O’Malley can’t keep a heavily Democratic state legislature in line, how could he possibly handle the U.S. Congress?

Martin O’Malley first shot to prominence in 1999, when he was elected mayor of Baltimore. O’Malley ran a single-issue campaign: He would fight crime in one of the most dangerous cities in America. To the people of Baltimore, who’d watched for years as bureaucrat after bureaucrat declared the city a lost cause, O’Malley was a bright light. Young, handsome, energetic, and occasionally ruthless, he was part JFK and part Batman.

Two years before Barack Obama’s keynote address to the Democratic National Convention, O’Malley was pushing hope and change. In 2002, with financing from the Baltimore Police Foundation, he launched the “Baltimore Believe” campaign, a massive media effort encouraging residents to take back their city from the drug culture. The message was not all warm and fuzzy. A four-minute television spot that aired on every channel showed prostitutes, drug addicts, and criminals in scenes of decay, interlaced with sad-eyed children and the howl of police sirens. It ended with a little girl going out to buy candy, shot dead in the street. The final voiceover had her brother saying: “I know there’s a fire in me. Please don’t let it go out.” The word “Believe” flashes on the screen. The media went wild, the magazine profiles glowed, and O’Malley was touted in Esquire as “the best young mayor in America.”

In the first summer of the campaign, drug treatment enrollment saw enormous gains. And 10 years later, Baltimore’s murder rate is still lower than it was when O’Malley took office. As he noted himself in a recent Baltimore Sun op-ed, “for the first time in more than three decades, [the city] reduced homicides last year to fewer than 200. Drug overdose deaths have been driven down to all-time lows. Juvenile shootings have been driven down 70 percent since 2007.” 

Yet O’Malley’s history as Balti-more’s reformer is not without its problems. The city’s population has sharply declined, and critics argue the reduction in crime is consistent with the smaller population. They also note that violent crime has dropped nationally, making Baltimore’s improvements merely part of a national trend. According to the most recent FBI numbers, Baltimore had 34.8 murders per 100,000 people, the third-highest rate in the country.

As governor, O’Malley has enacted several laws that make him popular with the Democratic base, but he is nowhere near the iconoclastic figure he once was. As mayor, he didn’t only take on crime. He fought Baltimore’s entrenched, molasses-slow bureaucracy. Now, as a Democratic governor in one of the wealthiest, bluest states in the nation settling into his second and final term, O’Malley is at the top of the food chain, with no one to grapple with. Major reform bills have taken a back seat to legacy legislation.

First, he signed the Maryland DREAM Act, which grants in-state tuition to certain illegal immigrants or, as O’Malley calls them, “New Americans.” Then it was time to invite Lady Gaga to the governor’s mansion “to discuss eliminating bullying in MD.” Next up: gay marriage, which the governor signed into law on March 1, after a botched attempt in 2011

But the governor doesn’t need legislation to attract media attention. Since becoming head of the Democratic Governors Association, he’s been making the rounds of the news shows. In the furor over the Obama-care regulation requiring religious institutions to provide free birth control, O’Malley—a Catholic—said on CNN that opponents of the measure, including members of the Catholic hierarchy, were doing “too much hyperventilating.” Asked about Virginia’s record of job creation, O’Malley quipped, “Nothing says jobs like transvaginal probes.” 

Virginia is a touchy subject with O’Malley. “You see the governor on television saying Maryland is creating jobs at 2.5 times the rate of Virginia. That’s just flat-out malarkey,” said former Republican candidate for governor Ellen Sauerbrey. Now co-chair of Maryland Business for Responsive Government, Sauerbrey says that while O’Malley’s been spending time on issues with appeal to Democrats nationally, Maryland’s economy has suffered. “In the 2007 session, he had the largest tax increase of anyone in Maryland’s history, and $800 million of that was direct hits on Maryland business. You just hear constantly that Maryland is not a friendly place to expand.” 

Sauerbrey’s list of businesses that have left Maryland or decided not to come here since 2007 is impressive: Northrop Grumman (gone to Virginia), Black & Decker (Connecticut), Hilton USA (Virginia), Volkswagen USA (also Virginia), and SAIC (Virginia again). “Here, businesses are seen as collateral damage to the goal of growing government,” Sauerbrey said.

And grow government has. In his five years at the helm, O’Malley has proven himself the paradigm of the tax-and-spend governor. Between 2007 and 2011, annual spending adjusted for inflation grew nearly 11 percent. The state’s structural deficit now exceeds $1.1 billion. This year, O’Malley proposed hundreds of millions in tax, fee, and rate increases, including a sales tax on gas and a “flush” tax. While some observers called his budget courageous, critics complained that another round of tax increases was a bridge too far. “The rank and file Democrats were palpably annoyed,” says House of Delegates minority leader Anthony O’Donnell. “They didn’t want to walk the plank for O’Malley. He doesn’t have to get elected again, and they do. These Democrats care about their state, and he’s leaving it in a state of decline.”

Christopher Summers, of the Maryland Public Policy Institute, notes that Maryland has gotten into the bad habit of spending more money than it takes in, then satisfying the balanced budget requirement by raiding its dedicated funds, especially the Transportation Trust Fund. A critical component of the governor’s failed revenue plan would have applied Maryland’s sales tax to gas, adding about 18 cents per gallon. This would replenish the Transportation Trust Fund, O’Malley said, to pay for improvements in infrastructure.

“The Maryland taxpayers have already paid for the infrastructure improvements,” Summers said, “and the Maryland politicians have spent it on other things.” As the governor’s own blue ribbon commission points out, “approximately
$1.1 billion” transferred from the transportation trust into the general fund “has not been, and is not scheduled to be, replenished.” 

O’Malley and Speaker of the House Mike Busch say the revenue bill failed not because of fed-up Democrats, but because the senate president, Mike Miller, held the bill hostage in an attempt to force through a series of bills extending gambling in the state. Miller asserts that the House of Delegates simply didn’t have the votes for the governor’s tax bill. Either way, O’Malley is already battling the perception that the collapse of the budget was a result of his incompetence.

A recent editorial in the Washington Post claimed the legislative session fell apart because Maryland Democrats were “distracted by ego contests among their leadership,” and urged O’Malley not to call the special session, suggesting that “Doomsday” might actually be healthy for the state: “The truth is that if lawmakers in the General Assembly were to stay home … the effect would be to cancel plans for a tax increase; spare the state a senseless expansion of casino gambling; eliminate some dubious spending programs; and ensure that Maryland’s $35 billion budget still manages to grow by a respectable $700 million, about 2 percent. None of that sounds exactly like doomsday.”

Undeterred, O’Malley invited the house and senate leadership to the governor’s mansion to begin working out the details of a special session. On Friday, the governor finally made the May 14 session official. 

Legislators and analysts alike expect O’Malley to use the specter of “Doomsday” to his advantage, firing up some of the more reluctant special interests (like the teachers’ unions, whose pensions and retirement plans are threatened) to fight for his tax plan. With Democratic supermajorities in both houses of the legislature, O’Malley will likely get his way. But will he recover his reputation? “He’s [been portrayed] as someone who gets people organized and gets things done,” says Ellen Sauerbrey. “This has really tarnished him.”

Kate Havard is a student at St. John’s College.

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