O’Malley Math From Herb McMillan
The public relations blitz to revive Democrat Governor Martin O’Malley’s 37% approval rating is in full swing. Last week, posturing as fiscal conservatives, Governor O’Malley and liberal legislators claimed to have slashed Maryland’s budget by $1.1 billion since July 2007. It’s undisputed that they’ve raised sales, income, and other taxes by $1.4 billion. But if O’Malley actually made $1.1 billion in real cuts in conjunction with his $1.4 billion tax increase, wouldn’t Maryland have eradicated its $1.7 billion deficit and project an $800 million surplus, even without slots? Yet unless slots pass, Maryland projects a $600 million structural deficit just five months after the biggest tax increase in Maryland history. How is that possible?
It isn’t the economy. That resulted in a $300 million reduction of revenue estimates, so we should still have a $500 million surplus, even without slots. It isn’t that we don’t tax enough. Maryland had the 9th highest total tax burden per person before O’Malley’s tax hike.
It’s O’Malley’s spending. O’Malley hasn’t cut the budget, or used the $1.4 billion tax increase to cover the deficit. Last year’s budget spent $30 billion. This year’s budget spends $31.2 billion. That’s a $1.2 billion (4%) increase. A budget that increases spending by $1.2 billion hasn’t been cut. If state spending increases 4% per year for the remainder of O’Malley’s term, it will grow 13%. How many of us have paychecks that will grow that fast?
When tax and spenders like O’Malley say they’ve “cut the budget” it means “we’re spending more, but not as much as we want.” Maryland’s General Fund budget is driven by formulas that mandate automatic annual spending increases, regardless of need or results. Liberals spin legislation reducing mandated increases into “ budget cuts”, even when they still result in higher spending. This year, state education funding increased by 4%, but not by as much as the Thornton formula required. Using O’Malley Math, the education budget was cut even though education spending increased by $185 million.
That’s just part of the O’Malley Math equation. During the Legislative Special Session called to “fix” O’Malley’s $1.7 billion deficit, spending on new or expanded programs nearly equaled spending reductions. Additionally, 40% of the $1.4 billion tax increase went to increased spending, not deficit reduction. Total spending wasn’t cut, it was redistributed and increased.
When the Special Session ended in November, Maryland still projected a $377 million deficit. This year, despite a record tax increase, the legislature had to raid the Transportation and Chesapeake Bay Trust Funds to balance the budget.
O’Malley Math attempts to put a fiscally conservative face on a liberal agenda that equates more government spending to a better quality of life for everyone. Unfortunately, putting lipstick on a pig doesn’t make it a prom queen. The budget formulas mandating increased spending also require the redistribution of your tax dollars to other counties. The state spends an average of $6,270 in education aid per pupil. Montgomery County receives only $3,789 per pupil, while Baltimore City receives $11,235 per pupil. Anne Arundel County receives $4,356 per pupil, the fourth lowest amount in Maryland.
You are paying more in state taxes, but they aren’t being used to improve your quality of life. Seventy-six cents of every state tax dollar collected in Anne Arundel County is spent in another county. More spending isn’t improving our test results either. Advocates for Children and Youth noted that Maryland’s scores on independent national tests had failed to improve, despite a $2.2 billion increase in education funding since 2002. Students have performed only marginally better on state tests.
George Santayana noted that fanaticism consists of redoubling your efforts when you’ve forgotten your aims. Maryland’s budget has doubled, increasing by $15 billion in the last ten years. Yet test scores have shown little improvement, the Chesapeake Bay is no cleaner, and crime is worse. O’Malley’s solution is to…….spend more.
We cannot spend ourselves out of a deficit or tax and gamble ourselves into a better quality of life. To successfully resolve our problems, including the deficit, we must change the big government mindset that created them, not simply repackage spending increases as budget cuts.
With spending exceeding tax receipts, O’Malley plans to resolve his deficit with slots. That’s a tough sell. To many, Slots and cuts instead of higher taxes are arguably the lesser of two evils. Slots after a record tax and spending increase are just an additional evil.
As Maryland families struggle with higher taxes, rising gas prices, and sky-high BG&E bills, they’re going to feel what the numbers already show: O’Malley math doesn’t add up to a better quality of life.
Herb McMillan is President of the Maryland Taxpayers Association and served in the Maryland House of Delegates from 2003-2007. Data used in this column was obtained from the Maryland Department of Legislative Services.