Legislative Updates By Delegate Mike McDermott

Feb. 2nd, 2012

The Governor Who Broke the Camel’s Back

Thoughts on the State of the State

By Delegate Mike McDermott

Every beast of burden has a limit where the proverbial “last straw” brings an end to any future.  In his State of the State Address, Governor O’Malley seemed intent on finding out exactly where that end may be with Maryland families and businesses.

The speech contained nothing new.  Within the first few minutes, the governor blamed former President Bush for Maryland’s current problems.  Perhaps it would have been best if the governor had ended on that note, but he proceeded to tell us how he was going to “strengthen Maryland families and small business” by increasing a multitude of their taxes.

The Governor does not understand the negative impact his gas and income tax hikes  will have on Maryland families.  Although he aligns himself with the “common man,” he recently could not identify the average price of gas, bread, or milk in Maryland, because his staff shops for him. (WJZ - Vic Carter interview with Gov. O’Malley on 1/31/12).  This could be part of the problem.

If O’Malley gets his way, Maryland’s gas tax will rise to 58.9 cents per gallon, making it the fifth highest in the nation. (Baltimore Sun, “MD Could get 5th Highest Gas Tax Under O’Malley Plan” by Jay Hancock.) This is not exactly the direction to move in if we want to protect our struggling families and make our state competitive and business friendly.  In fact, rural Marylanders will bear the brunt of the tax increase, since they consume more fuel than their urban counterparts.  Likewise, every item we ship or receive on the Shore will have this cost passed on to us as consumers, robbing families of what remains of their discretionary funds.

Perhaps the saddest indictment for this current state of affairs is how these budget debts will be passed on to coming generations. The governor and the Democrat leaders like to call this “investing in the future,” but what responsible parent gives their child a credit card that is already maxed out?  In Maryland government, it has become a common practice for us to build playgrounds for our children that their children will pay for.  Maryland citizens already carry more personal debt than their neighbors in 47 other states  (Yahoo Finance July 26, 2011). This does not even include our student loan debt. We can pass the buck, but unfortunately our children won’t be able to.

The growth the governor seeks is in the public sector.  The jobs he seeks to preserve or expand reside with the government.  When jobs are already dwindling, every dollar spent in the public sector is just one more dollar pulled from the private sector.   We need our construction crews busy building homes, factories, and office space based upon the actual consumer need that expands the economy.  It is a flourishing private sector that generates the jobs that provide the taxes to support the infrastructure projects of which the governor is so fond. Our private sector must drive our recovery.  Small business and entrepreneurs must lead the charge. The governor can help by clearing obstacles.  He alluded to this in his speech, and I encourage him to do more in the years left in his term.

The governor is a big-government guy; government is his natural fall-back position.  If the private sector will not build his project, he is apt to have the state build it, regardless of the risk or cost. Off-shore wind finds itself in this camp. It is too risky to garner private support - or it would already have been done. We have seen this in Delaware just last month with the evaporating private sector support for these projects. Yet the governor is attempting to go against the winds of a common-sense market place by advancing the idea that the tax payers and rate payers of Maryland should hamstring their collective futures by agreeing to subsidize Big Wind. “Feeling good” can be the by-product of a good decision, but it can also be used as an excuse to do that which makes no practical sense.

This administration refuses to drill for vast natural gas deposits in Marcellus Shale, so we import our gas from Pennsylvania and pay more for the privilege. We boost their state’s economy at our own peril. That does not make any Maryland family “feel good” about their pocket book.  There are ongoing private ventures centered on land-based wind and solar energy. Both are funded by the private sector and profitable. Why are we not encouraging and expanding these successes?

The speech’s premise that private sector growth is driven by public sector expansion is a flawed approach that we have seen on even grander scales in the form of various federal stimulus programs in recent years.   We cannot expand the public sector without damaging the private, and we cannot spend our way out of our deficits. No matter how many times you say otherwise does not make it so.