Lost On The Shore

Going Down?

As the national and global economies continue to deteriorate, we're fortunate that Maryland is in a better position than most states.  We're relatively wealthy, our economy is largely service based and a steady stream of Federal government expenditures supports much of the state economy. 

Nevertheless, we're definitely going to feel the effects.  A glance at the newspapers over the past couple of days reveals that state tax revenues continue to fall, the unemployment rate continues to climb and foreclosures are still climbing.

Many local jursidictions are taking steps to reduce their expenditures in view of expected revenue reductions in the coming years.  Montgomery County is negotiating with the employee unions to see if they can reduce or defer the pay raises that had been negotiated for the coming year and the county executive has proposed cuts in services.  Baltimore mayor Dixon has announced she will propose up to $200 million in cuts and Prince George's County is looking at possible cuts.

It would be nice to see the jurisdictions here on The Shore being a bit more proactive in looking at cuts.  In less than two months the new legislative session begins and we can be sure that the state is going to further cut support to local governments in an attempt to close the projected state shortfall of $1 billion or more. 

With Maryland's peculiar three-year cycle of real estate appraisal, the local governments have been somewhat insulated from the effects of falling property values, but that's going to change soon.  Because increases in assessments are phased in over three years, assessed values in many jurisdictions appear to be still rising.  But properties assessed in 2006 when values were high will be assessed again in 2009 and it's very likely that there will be a decline in values most places.  Thus the property tax base will begin to decline. 

So keep an eye on the county governments and see what steps they are taking to deal with the issue.  The sooner they start, the better.

Sidetracked

Well, it looks as thought the bid by the Club For Growth to put their man, Andy Harris, into Congress, may have been sidetracked.  After the first round of counting absentee ballots, Democrat Frank Kratovil's lead has increased to 2,003 votes.  Tomorrow the election boards will look at provisional ballots and then go on to count the remaining absentee ballots.  At this point it doesn't appear as though there are enough of these to help Andy Harris overcome Kratovil's lead.  Indeed, the Associated Press has called the race for Kratovil.

The First District was designed to be a Republican District.  Before this election, the Republicans had held the seat for 18 years.  A large majority of state legislative seats in the District are held by Republicans.  So how did Kratovil manage to eke out a victory?  Everyone has their opinion, of course.  Michael Swartz over at Monoblogue has this interesting take on the election.  I see four factors that led to Kratovil's apparent victory.

First, of course, is the defeat of Wayne Gilchrest in the primary.  Gilchrest was a moderate Republican who was much loved by many on The Shore, Republican and Democrat alike.  His defeat in the primary but the more right-wing Andy Harris with substantial out-of-state financial support was disheartening to many Eastern Shore voters and opened the door to a Democratic challenge.  

Second is the candidacy of Barrack Obama.  While John McCain handily won the Eastern Shore jurisdictions, Obama's candidacy bought a surge of new voters and bought many to the polls that may not have voted otherwise.  It appears that a large number of African-American voters, in particular, may have provided the margin to help push Kratovil over the top.

Kratovil was able to compete financially with Harris.  With Gilchrest out of the race, Kratovil was able to attract funds from the DCCC and other national sources to offset the resources that Harris was able to get from out of state.  If Gilchrest had won the primary, Kratovil would never have gotten that money and it would have been no contest, like many in the past.

Of course, having the Libertarian Candidate, Davis, in the race helped too.  If Andy Harris had gotten those votes, he would have been victorious.  

Republicans seem to think that Frank Kratovil is going to lay down a liberal voting record in Washington that will help defeat him in two years.  I don't think so; Frank seems to me to be a more conservative, 'Blue Dog', Democrat who will build a moderate voting record, splitting with his party when necessary to reflect the temper of his district.  In 2010, with two years of incumbency behind him, he will be in a stronger spot to defend his seat, particularly if he couples a moderate voting record with good constituent service and good fundraising.

After 2010, of course, the situation will change.  The surge in Democratic registrations this year will provide some flexibility to shift more Democratic voters into the First District when redistricting rolls around.  

So, for now, let's keep our fingers crossed that the AP is right and the 2,003 margin holds up.  Then we can take some time to relax and hopefully savor a victory before we start to look at 2010. 

The Voters Have Decided

It was an exhausting campaign that seemed to go on forever, but the voters have spoken (although it's not clear in some cases what they say) and it's time to look ahead.

Slots

After many years there is finally a clear decision that we will have slot machines in Maryland.  The vote was not close; slots won in every jurisdiction with a 400,000 vote margin statewide.  The issue now moves to implementation.  The Governor is already moving to identify and appoint commission members who will oversee the bidding for the licenses.  In Baltimore, the city has already moved to purchase land in South Baltimore which the city hopes will be used for a casino there.

Those opposed to slots haven't given up, of course.  There are going to be zoning battles and other rear-guard actions.  The fact that slots won in every jurisdiction, though, is going to give local politicians pause in how hard they can fight to delay the inevitable.  In Anne Arundel County, for example, slots won overwhelmingly, as they did in Baltimore City, Allegany County and Cecil County.  Here in Worcester, it was a little tighter although there was a majority in favor of slots.  

The state is going to have to be very open and transparent in how they issue regulations, select operators and manage the process.  Any hint of collusion or back room deals could delay things for a long time.

Early Voting

The constitutional amendment to allow early voting also passed by a large margin.  To me it seems that the primary effect of this will be in the large jurisdictions of the Western Shore where voters frequently encounter large lines on election day.  Given the busy lives that many live, the ability to choose one of several days on which to vote seems as though it will make life a bit easier and perhaps improve turnout.  Since the large jurisdictions are primarily Democratic, it will likely improve Democratic margins statewide, but it's hard to tell how much.  I guess we'll find out in 2010.

First District

It's definitely a nail-biter here.  As expected, Frank Kratovil did well on the Eastern Shore while Andy Harris did better on the Western Shore - particularly in Harford County.  Kratovil's 900 vote margin in Tuesday's voting will have to withstand more than 28,000 absentee ballots that have been returned in the district.  Registered Dems outnumber Republicans by about 300 in the number of returned ballots and the majority of the ballots are from the Eastern Shore, where Kratovil led in every county in Tuesday's voting.  While counting might continue for several more days as more ballots arrive, chances are we'll know the winner tonight.  I'm hoping Frank will pull it out - I think the odds are in his favor.

Presidential Voting

Barack Obama received 61.4% of the votes on Tuesday compared to 37.0% for John McCain.  As expected, Obama's huge margins in Baltimore City, Baltimore County, Montgomery County, Prince George's County and Howard County overwhelmed McCain wins in the smaller jurisdictions. 

The impact of the large number of newly registered voters was felt across Maryland, though, as John McCain trailed George Bush's 2004 share of the vote in virtually every jurisdiction.  The Republican Party is going to have to rethink its strategy if it is going to have any chance in 2010 to win a statewide office or elect a significant number of state legislators.  It will be interesting to watch. 

Final Voter Registration Numbers

The Maryland State Board of Elections has released the final voter registration numbers for next week's election and the numbes are encouraging.

With strong voter registration efforts by both parties this year, the number of voters registered in Maryland has increased by 320,247 this year to a total of 3,430,364.  This represents an increase of more than 10% in less than a year.  The bulk of the newly registered voters - 227,770 - listed themselves as Democrats while only 41,882 registered as Republicans.  An additional 50,595 were affiliated with one of the smaller parties or registered as independent.  

This is more bad news for the Republican party in Maryland.  The number of Republican voters increased by only 4.7% while the Democratic voters were up by 13.3%, slightly expanding the more than 2 to 1 lead Democrats have in the state.

As expected, the five largest jurisdictions in the state - Montgomery, Prince George's, Baltimore and Anne Arundel Counties and Baltimore City - accounted for the bulk of new registrations.  Together they signed up 222,923 new voters.  The vast majority of these - 175,779 - were Democrats while the Republicans counted only 18,745 new voters in these jurisdictions.  

Here on the Lower Shore, the trend was the same although the numbers were much, much smaller and the Democratic dominance not quite as great.  Somerset, Wicomico and Worcester counties signed up 5,812 new voters together.  Of these, 3,311 registered as Democrats and 1,133 registered as Republicans - almost a 3 to 1 Democratic lead in this supposedly conservative part of the state.  

All of this, of course, is going to make it even more difficult for Republicans to be any kind of political force in Maryland.  Their tiny representation in the Maryland legislature is going to grow even smaller - even more so as redistricting after 2010 moves more seats to the big counties on the Western Shore - already Democratic strongholds.  

Perhaps the Republican Party in Maryland should rethink their strategy of throwing out anyone but the most extreme conservatives and allow some moderate voices into the party.  It would certainly be a breath of fresh air and might bring back some of the voters who have been alienated by the relentless negativity.  But, as long as people like Bob Ehrlich and Andy Harris continue to run the party, I don't think the Dems have much to worry about on a statewide level.

Still Ticking

The Bureau of Labor Statistics reported that Maryland's unemployment rate rose in September to 4.6% from a rate of 4.5% in August.  More than 138,000 Marylanders are looking for work but unable to find it - an increase of about 33% since the beginning of the year.

Yet, the unemployment rate in Maryland is still well below the national unemployment rate of 6.1% and far below the rate in some of the traditional industrial states like Michigan (8.9%), Illinois (7.3%) and Ohio (7.4%) and some of the 'new industrial' states like South Carolina (7.6%) and Mississippi (7.7%).

The basic reason for our performance, of course, is that Maryland shed its manufacturing jobs many years ago and the economy today is primarily a 'knowledge economy' focused on the health and government sectors. 

In the 1950s, the steel mill and shipyard at Sparrows Point (partially picured above) employed 31,000 people.  Today, employment there is 3,500.  The largest private employer in the state is now Johns Hopkins Medical Center.  In 1950, one out of three jobs in the Baltimore area was in manufacturing.  Today, it's one out of twenty and most of those are manufacturing high-tech items such as missiles and missile launchers, defense electronics and radar systems and medical devices. 

Many more in Maryland are employed in the thriving biotech industry along the I-270 corridor and in the new biotech parks outside of Baltimore.  The sector continues to grow - yesterday the Army dedicated it's new biodefense lab at Fort Detrich in Frederick.  The Baltimore area added 70,000 new jobs between 2000 and 2007.  At the same time, the Cleveland area lost almost as many and the Detroit area lost some 250,000. 

Of course, this hasn't come painlessly.  Tens of thousands of workers who spent their entire lives working for Bethlehem Steel at Sparrows Point ended up losing their health care, their life insurance and finally their pensions as the company failed.  Retired GM workers will lose their health benefits soon. 

While the knowledge economy has bought considerable income and some resistance to economic downturns, most of its jobs are not open to those with just a high school diploma or less.  A knowledge economy requires knowledge workers and that's where our education system comes in.

With the budget problems the state faces, it's tempting to make cuts to state aid to community colleges and higher education.  The Governor and the legislature will need to resist this temptation because it's the availability of skilled and productive workers that attract high-tech companies to Maryland. 

Much has been made of the Tax Foundation's rankings showing Maryland falling from 24th to 45th in its business tax climate rankings.  But, of course taxes only are one of the factors businesses consider when they decide where to locate.  To look at another perspective, the Milken Insitute publishes an annual State Science and Technology Index which ranks states in terms of their technology and science assets and their ability to leverage those assets to achieve economic growth.  Maryland ranked second this year, behind only Massachusetts. 

So yes, taxes are higher here than I would like.  But I'd rather be where we are economically than where Michigan, Ohio, South Carolina or Mississippi are. 

Budget Cutting...

The Maryland Board of Public Works (pictured above), consisting of Governor Martin O'Malley, Comptroller Peter Franchot and Treasurer Nancy Kopp, met last week to make cuts to the state's budget.

The cuts total either $300 million, $297 million, $348 million, $345 million or $280 million depending on where you get your news.  They are necessary to address smaller than expected tax receipts - a reflection of the slowing economy and falling home prices.  The cuts are certainly a precursor of more to come as the state struggles with a projected $1 billion deficit in the coming year.

The cuts that were approved span a wide variety of programs and functions with some setting the stage for the deeper cuts to come next year while others are one-time adjustments or changes in accounting which don't appear to have any real effect on state expenditures.  Let's take a look at some of the cuts.

About $16 million was cut from the University System of Maryland - a 1.5% reduction.  While this won't result in tuition increases this year it's almost certainly a harbinger of more cuts to come in next year's budget.  Another $6 million comes from reduction in grants to private colleges and universities in the state.  More than $8 million comes from reduced subsidies for Community Colleges.

About $21 million in savings will come from reductions in this year's rate increases for certain health care providers with another $22 million of 'savings' coming from using special funds rather than the general fund for some state Medicaid expenses. 

About $26 million in savings will come from abolishing 790 vacant positions including 181 in the Department of Health, 200 public safety positions (including 100 correctional officer positions), 100 positions in the Department of Human Services and 76 positions in the Departments of Natural Resources, Environment and Agriculture (these include 31 Natural Resource Police positions.)

In the category of funny money, $20 million was claimed as a savings by deferring a payment from the General Fund to the Transportation Fund for the ICC.  Another $46 million was 'saved' by eliminating a payment on the estimated $15 billion liability the state has for health benefits for retired employees.  Almost $7 million in 'savings' come from deferring spending on major IT projects and about $3 million in 'savings' comes from using the proceeds from the Regional Greenhouse Gas Initiative auctions in lieu of general funds.  

The one-time savings of almost $80 million are good, but will do little to help with cutting next year's budget.  The same is true of the $40 million in fund swaps.  They are essentially a one-time exercise in capturing excess amounts in some of the special funds which can't be replicated next year.  

I'm also concerned about just 'abolishing' vacant positions.  This kind of decision implies that every position is equally important to the functioning of the state government.  That's clearly not the case.  It would be good to see some actual analysis that identifies and eliminates lower priority functions and programs and preserves those that are considered more important.  I'm hoping I'll see that when the Governor submits his budget proposals for next year.

It's going to be a difficult budget and the legislature is going to have its hands full trying to assess the reductions.  Local jurisdictions in Maryland are already facing sharp reductions in their budgets.  Given the nature of the Maryland state budget it's almost impossible to craft the required budget reductions without significant reductions in aid to local jurisdictions.  Everyone had better be preparing for the pain ahead.

[The painting of A Woman and Two Men is by Jan Vermeer and was done in 1669 or 1670]

Maryland Voter Registrations Surge

Voter registrations continue to surge in Maryland and most of the surge is going in the Democrats' direction as recent numbers from the Maryland State Board of Elections confirm. 

As of October 15, there were 3,360,846 registered voters in Maryland of which 1,898,571 were registered as Democrats and 919,240 as Republicans with the remainder being either independent or members of smaller parties.  This represents an increase of 83,622 registered voters just since September 19. 

Those 83,622 voters include 58,099 registered as Democrats and 10,090 registered as Republicans - a stunning advantage of more than 5 to 1 over the last 26 days.  Projections by the Board of Elections indicate that, for the full year, Democratic registrations will outnumber Republican registrations by about 3 to 1. 

Indeed, the interest in this election has generated a very high number of new registrations.  Hopefully the Board of Elections has deployed enough voting machines and election workers to accomodate all those who wish to vote.

With turnout expected to be very high, it's important that there be enough machines and election workers to allow everyone to vote.  This is particularly important in areas such as Prince George's County which registered almost 17,000 new voters in the last 26 days.

Montgomery County registered almost 15,000 new voters during the same period and Baltimore City registered nearly 11,000.

Here on the Lower Shore, the numbers are much smaller. In Worcester County, 730 new voters were registered between September 19 and October 15.  318 are Democrats and 264 are Republican.  In Wicomico County there have been 1,154 registrations during the period including 669 new Dems and 269 new Republicans.  Over in Somerset, of 262 new voters, 173 are Dems and only 53 are Republican.

Of course, as others have pointed out, these new registrations affect not only this election but the state and local elections coming up in two years.  Former Governor Ehrlich, who indicates he wants a rematch with Martin O'Malley, will have that much harder a time.  And Republican chances of gaining ground in the state legislature will be that much slimmer. 

[Note: the painting Canvassing For Votes was done by William Hogarth in 1755 and is one of his series of four on The Humours of an Election.]

Winter Is Coming

We know both from the calendar and from the changes in the weather that winter is on the way.  On top of the economic problems we already face, the Energy Information Administration has already issued warnings that the cost of many heating fuels will be higher this winter than the last.  Homeowners that heat with oil will face bills that will be about $450 higher than last year and those who heat with electricity, natural gas or propane will also face increases.  On top of that, there are indications that this winter could be colder than last winter, particularly in the east.

We should begin planning now to prepare our homes for the winter so that we can keep our bills within reason and do what we can to conserve energy.  But many Marylanders lack the resources to weatherize their homes and may be faced with heating bills this winter that they cannot manage.

  Fortunately the state Office of Home Energy Programs offers assistance in a number of ways for low-income Marylanders.  The Maryland Energy Assistance Program offers assistance with home heating bills.  They also offer limited assistance in repairing or replacing broken furnaces.  The Electric Universal Service Program offers assistance to low income customers with electric bills.  The Weatherization Assistance Program offers help to certain low income residents for things such as weather stripping, caulking, plastic window covers, etc. 

Information on all these programs can be found here.  On the Lower Shore you can contact your local Shore Up! office.  Shore Up! is the coordinator of home energy programs for the Lower Shore.  You can also find information and apply for these programs at your county social services office. 

The economy is bad; lots of people are without work and energy costs are high.  But these shouldn't be a reason for going without heat this winter.  If it looks like you or your neighbor might not be able to afford to heat your house this winter, contact the Energy Assistance Program now.  Help is available.

[The painting was done in 1839 by Andreas Achenbach and is in the Hermitage Museum in St. Petersburg]

The Race Goes On

With just about a month until election day, there are a few things that seem clear.

In the Presidential race, Obama/Biden will win in Maryland and win big.  Of course, this was a foregone conclusion from the beginning and neither party has mounted a presidential campaign here because of that.  Obama's lead seems to be growing, though and he seems to be doing well in the neighboring states of Pennsylvania and Virginia.  He has a solid lead in Delaware.  West Virginia could go to McCain, but much depends on the economy.

On a congressional level, seven of Maryland's eight seats seem to be safe for incumbents.  The only question is in the First District.  Here Frank Kratovil and Andy Harris are campaigning hard to succeed Wayne Gilchrest.  At this point, it looks as though Kratovil will do well on the Eastern Shore, but Andy Harris will do well in the portion of the district on the Western Shore.  Polling seems to be very close.  The Democratic Congressional Campaign Committee has put a lot of money into the race and we'll see if that makes a difference in the home stretch.

Both parties are working actively to register voters and provide grass-roots support.  It's instructive to look at voter registration numbers.  As of October 2, there were 193,223 registered Democrats and 189,858 registered Republicans in the District.  Another 67,155 were either unafilliated or registered to a smaller party.   In the past six days (since 9/26) 669 voters had newly registered as Democrats in the district while 471 had newly registered as Republicans.  Voter turnout is expected to be high - more than 80% of registered voters.  Last minute registrations and get out the vote efforts might prove to be crucial in this race.  The registration deadline to vote in the general election is October 14 at 9:00 pm.

The big question on the ballot this year will be a referendum on approving the licensing of slot machines in Maryland.   Lately the opponents have been waging a shrill campaign against the question (I get two or three e-mails a day from them).  Supporters have been relatively quiet.  It will be interesting to see if the fiscal problems in Maryland at both the state and local levels brings out more support in the next month.  It's amusing to see former Governor Bob Ehrlich, who strongly supported slots when he was governor try to justify his opposition to them now as something other than raw political jealousy.  At this point I'm betting (wagering? gambling? venturing?) that the question will pass, but it won't be as easy as it looked six months ago. 

More Clowns

The financial resuce bill which was introduced in the House today represents a compromise that was negotiated between the Rebublican and Democratic leadership and which addresses most of the objections to the administration bill which I raised here earlier. 

Well, we saw more clowns today in the House vote on the financial rescue bill.  While the Democrats delivered the votes to pass the bill, Republicans, voted against the bill in large enough numbers to sink it.  Apparently and incredibly, they claim that they voted against the bill because Nancy Pelosi hurt their feelings by pointing out how badly the Bush administration had mismanaged the economy.  

Rather than do what is necessary to try and save the economy and the country, the Republicans decided, like spoiled children, to hold their breath until the economy turns blue.  And amazingly, they did this on a Monday after five large bank failures over the weekend - one in Belgium, one in Germany, one in the UK, one in Iceland and Wachovia here in the U.S.  (Of course the FDIC insists that Wachovia didn't 'fail', but Citicorp snapped it up for $1 per share vs. $60 per share it was trading at a year ago and FDIC had to absorb a lot of the losses.

Of course, once it was apparent that the bill was failing, the stock market dropped like a stone - down 600+ as I type this.  Lest you think that this affects only big investors, keep in mind that more than half of Americans have their retirement savings invested in the stock market.  

Look for more corporate failures in the next several days as the Republican members of Congress pout.  It would be nice if they cared about their country more than they care about defending their disgraced President.