Lost On The Shore

Items of Interest

It's been a soggy couple of days on the Shore and we're looking at a few more before we finally break into our late spring and summer weather.  While I'm waiting I want to catch up on a few items of interest that caught my eye over the past week.

Energy prices continue to rise. Gasoline prices set a new record in Maryland this week.  Gasoline prices nationwide reached an average of $3.67 a gallon and oil reached $126 a barrel.  Gas prices here on the Shore ranged from about $3.55 to $3.65 while in the high priced areas of Montgomery County prices were in the $3.75 - $3.85 range with one station posting $3.97 and a station in DC was asking $4.05 for regular.  Diesel prices are higher everywhere. 

The tourism industry here on the Shore relies heavily on vacationers driving over the Bay Bridge from the DC/Baltimore area and down from the Philadelphia area.  With the peak summer driving season starting in a few weeks, the ability of consumers to absorb these increases could have a dramatic impact on the economy here.

On the electricity side, BG&E posted their new rates and PEPCO Holdings announced that their first-quarter profits doubled from last year.  It looks like a difficult summer on the electricity front, also.

Transportation  In a related development, the New York Times today reported that higher gas prices are driving record crowds to mass transit.  Mass transit systems are struggling to cope and equipment shortages are becoming apparent as is apparent both in Baltimore and Washington.  With a huge proportion of the state's transportation budget tied up in the InterCounty Connector, the state and local jurisdictions are going to have to look hard at their budgets to see where they can free up some funds to expand mass transit options.

Here on the Shore, there's little mass transit to speak of.  In Ocean City, though, the town is encouraging visitors to rely on its bus system while visiting there.  A crowded summer weekend can easily overtax the system there and they are going to have to be careful to ensure they have enough capacity.

On a brighter note, the state has announced that construction will begin next year on the MARC station in Edgewood.  With thousands of new jobs coming to the Aberdeen Proving Grounds, this station will be a critical part of the transportation infrastructure there. 

Health  A recent study in New England shows that teenagers in places with strict smoking bans in restaurants were forty percent less likely to become regular smokers.  Apparently, huddling outside restaurants and bars to take a puff isn't 'cool'.  Lower smoking rates among teens will help keep health care costs from growing so fast.  Every little bit helps.

Real Estate The number of home sales continues to decline in Maryland.  The National Association of Realtors, as they have every recent month, said that the turnaround is about to start, but almost no one else seems to think so.  Spring is normally the peak selling season, but it doesn't seem to be happening, at least here on the Shore.

In many states, local jurisdictions are facing severe budgetary problems as falling assessments lead to reductions in property taxes.  Here in Maryland, the problem is not quite so urgent as our three-year assessment system means that assessed values are still rising in most jurisdictions.  Some counties, though, like Montgomery and Prince George's, which have come to rely heavily on transfer taxes, are suffering as home sales decline sharply.  All local jurisdictions need to be very careful in committing to future costs, though, as the same three-year assessment cycle which is helping them now will be hurting them in the future as new assessments drop.

[The photo is of Thomas Point Shoal Light] 

SCHIP Rides Again

I hear from a couple of places that there's going to be another SCHIP vote on Thursday (Oct. 24).  The revised legislation will contain a few changes from the bill that was vetoed earlier:

• an explicit prohibition on benefits for illegal immigrants
• a one year phase-out of adults in the program as opposed to the two-year phase-out in the earlier version
• an explicit prohibition against providing benefits to children in families

It's possible there may be a couple additional changes including an asset test.

All of the Maryland delegation except for Roscoe Bartlett voted to override the President's veto of the original bill.  I expect the same for this bill.   While there have been rallies and other pressure in Bartlett's district, I doubt that he'll support this.  But it won't hurt to contact him and urge him to support this legislation; maybe he'll see the light.  His office phone # is 202-225-2721 and the fax number is 202-225-2193.

   

S-Chipping Away

Well, the House vill vote Thursday on overriding the President's veto of the State Childrens' Health Insurance Program (SCHIP) reauthorization and expansion.  Indications are that the veto will be sustained although the vote will be close.  Wayne Gilchrest will likely vote to override the veto, insulating himself from the pressure being placed on a number of Republican congressmen in the northeast over the vote.

For some time, Democrats have been chipping away at moderate Republicans in the northeast part of the country.  The 2006 elections sharply accelerated this process.  Casualties included:

• Rob Simmons (CT-02)
• Nancy Johnson (CT-05)
• Jeb Bradley (NH-01)
• Charlie Bass (NH-01)
• Sue Kelly (NY-19)
• John Sweeney (NY-20)
• Sherwood Boehlert (NY-24)
• Melissa Hart (PA-04)
• Curt Weldon (PA-07)
• Mike Fitzpatrick (PA-08)
• Don Sherwood (PA-10)

Democrats are hoping to take advantage of the controversy over SCHIP by pushing hard at remaining northeast Republicans, particularly in New York and New Jersey, where there are Democratic governors and strong local support for the program.  Several Republican members from Pennsylvania are also under strong pressure to override the veto.

Now, most northeast Republicans have had a reputation as fiscal conservatives but social moderates, which has put them out of touch with the core of the Republican party which seems to have become socially very conservative but has been running up huge deficits during the time they controlled both the Congress and the White House.  So it's ironic that a fiscal issue is being used as a lever against the remaining Republicans in the area.

Congressman Gilchrest's strongest primary opponent, Andy Harris, has announced that he has raised a considerable sum of money during the second quarter, making him the strongest primary challenger Gilchrest has had in years.  It will be interesting to see if Gilchrest moves a bit more to the right as a result of this strong challenge from the right. 

My understanding is that the DCCC considers Maryland's first district to be a second tier race - Gilchrest has won by comfortable margins for years, but if Gilchrest loses the primary or is forced to move farther to the right and a strong Democratic challenger emerges, things could get interesting.

Follow-Up

I just thought I'd take a moment to post some brief updates to some of my earlier posts.

Save The Bay?

As I posted earlier. we all say we want to 'Save The Bay', but we don't seem at all willing to take the steps necessary.  On Wednesday, The Capital reported that Anne Arundel County engineers had calculated that removing existing pollution and retrofitting stormwater systems to prevent new pollution in county waterways would cost about $5 billion - that's billion with a 'b'. Anne Arundel's current storm drainage fee generates about $300,000 a year.

Today The Sun reports that a fee on new development proposed by the county executive, which would generate about $5 million a year is in trouble.  A competing proposal by environmentalists which would levy an annual fee on all property owners and raise about $30 million is not under consideration.  Republican Councilman C. Edward Middlebrooks agreed that more resources are needed but suggested that the fee proposed by the county executive might be a dreaded "TAX".

Well, of course it is.  Taxes are the way we collectively raise money to address common needs.  It always amazes me how those who champion 'personal responsibilty' don't feel we should be responsible for addressing the effects of dumping our wastes in the public air and waterways. 

As I said in my earlier post, Marylanders like to say that we love our environment and want to 'Save The Bay', but our actions would indicate otherwise.

How Much Is Enough?

In an earlier post I discussed how educators expect all of their budget requests to be fully-funded, without question.  Governor O'Malley has had the nerve to propose a freeze on the inflation index in the Thornton Plan, which would reduce education funding by the state by about two percent. 

Now the inflation index used for the Thornton Plan bears little relation to the CPI index published by the Federal Government; for the current year, it's 5.7%.  State spending on K-12 education has increased from $3.12 billion in 2003 to $5.16 billion in the current fiscal year, an increase of about 65% in five years.  That's a lot of money.

Every problem with education can, in the eyes of educators, be solved only by throwing more money at it, but they balk at telling us what we will get for it in terms of performance.  Apparently educators' performance can't be measured.  Compare that to the proposal by Comptroller Peter Franchot that an additional $30 million be allocated to his office for improved information technology and some additional staffing.  With that, he says, he can collect an additional $200 million in unpaid taxes over the next four years.  Sounds like a good investment to me.

Special Session

It seems clear that our Governor is going to call a special session of the legislature.  The Washington Post reports that the Governor has decided to call a special session to consider his tax and revenue proposals, perhaps beginning as early as late October.  I think this is a risky move for him.  The result could be passage of one or two items on which there is general agreement (at least among the democratic majority) and the rest will be discussed to death.  This could leave us with the worst of both worlds, a higher sales tax but no income tax reform, no property tax reductions, no low-income tax credits and, of course, no slots.  Let's hope he gets some solid proposals together before the session so there can be a fair and open debate on the proposals. 

State Childrens' Health Insurance Program

(WPA Arts Project, 1938)

As promised, the President has vetoed the extension of the State Childrens' Health Insurance Program (SCHIP).  The legislation would have extended the program for five years and expanded it by $35 billion over the five years to cover additional children.  All of the state's congressional caucus voted for the legislation except for Roscoe Bartlett (R). 

About 100,000 children in Maryland are covered under the program and state officials estimate the legislation would have allowed an additional 42,000 to be covered.  These children are from families who earn too much to be eligible for Medicaid, but not enough to afford private health insurance. 

Now it seems odd that the President, who did not veto a single bill during his first term and has vetoed only three others, and who has signed huge, budget-busting, pork-laden appropriation bills without a murmur, has suddenly found the religion of fiscal restraint with this bill.  The bill passed the Senate with a bipartisan majority sufficient to override his veto.

While the majority isn't big enough to override the veto, the Dems are taking the opportunity to run TV ads in the districts of 13 vulnerable republicans.  It appears the override vote will be delayed to allow time for these ads to run. 

Now it may be that the President is trying to give Republican congressmen and chance to shore up their reputation with their fiscally conservative base, but it seems odd that he would do this when he has a $195 billion war funding request pending.  Polls show that some 75% of Americans support the SCHIP expansion and a majority wanting to reduce spending on the Iraq war.

Locally, Congressman Wayne Gilchrest voted in support of the bill.  While his vote will likely anger some of the more conservative voters on the Shore, it will likely help cement his moderate reputation here.  Apparently, despite rumors that Andy Harris has had a good fundraising quarter, Gilchrest is not shifting to the right yet. 

Up in Smoke

Governor Martin O'Malley announced yesterday his intention to propose a doubling of the state's cigarette tax from $1 to $2 per pack.  Revenue from the increase would be used to reduce the state's deficit and to make healthcare more affordable for poor Marylanders.  The increase would give Maryland the 7th highest tobacco tax.  Delaware recently increased it's tax to $1.15 per pack.  The rate in Pennsylvania is $1.35, 55 cents in West Virginia and 30 cents in Virginia.  The SCHIP recently approved by the House of Representatives would raise the federal cigarette tax by 61 cents a pack.

A cigarette tax increase was approved in the Maryland House of Delegates in the spring but failed in the State Senate, partly because Senate leaders wanted to address the overall budget situation first.  It remains to be seen how it will be received as part of a larger revenue package.  There has generally been widespread support for tobacco tax increases, but some resistance is to be expected both from smokers and from merchants fearful of seeing some of their business evaporate as smokers go across the state borders to get their smokes.

On a personal note, if the increased cost of smoking makes you want to quit, I am impressed by a remarkable new drug, Chantix®.  I know three lifelong heavy smokers who have been able to quit completely in the past several months with the help of this drug.  (Disclosure: I have a daughter who works for the drug's manufacturer: Pfizer) 

Child Health

(Dr. Schreiber of St. Augustine gives an typhoid innoculation at a rural school in St. Augustine County, Texas in April of 1943.  Library of Congress Collection)

It's worth noting that SCHIP expansion (conference report) passed the House yesterday by 265-159; better than I expected but not enough to override a veto.  The Senate is expected to pass the bill later this week and the President has promised a veto.  Congressman Gilchrest voted in favor of the bill.