There They Go Again
Those purveyors of fine prevarication over at the Maryland Democratic Party’s blog are at it again.
This time their crack sleuths claim to have uncovered shocking evidence that Mary Kane “wishes Maryland were more like Texas”.
Absent from Kane’s dire picture of her home state is any mention of the actual state of the Texas’ economy in relation to Maryland’s.
At 8.2%, the unemployment rate in the Lone Star state is more than a point higher than Maryland’s. Texas’ bond rating (AA+) is lower than Maryland’s. Per capita income in Texas is about half Maryland’s. And Texas is currently facing an $18 billion budget deficit, caused in large part by the very tax policies cited by Kane as a model.
That’s ironic because absent from the Democrats clever little conceit are facts that actually show Texas’ economy “in relation” to Maryland.
Of course, contrary to their headline, Mary Kane never said she wished Maryland were more like Texas. She said Texas is doing pretty good because they don’t raise taxes on business.
The fact is that the comparison the Democrats want to make is impossible because Maryland and Texas aren’t comparable states. Maryland has a population of 5.7 million versus Texas, which has 27.8 million.
So yes the Lone Star State is naturally going to have a larger unemployment rate than Maryland because 22 million more people live there.
Comparing Maryland’s and Texas’ respective unemployment rates is the proverbial apples to oranges comparison because their economies are so different. Take away government jobs—the largest employment sector—and jobs relying on federal contracts from Maryland and our unemployment rate skyrockets. Texas on the other hand has other robust private sectors in it’s economy.
Yes Maryland has an AAA bond rating, but that is merely a façade of fiscal responsibility built on an all too familiar house of cards. Marta Mossburg noted in the Baltimore Sun:
At the state level, Gov. Martin O’Malley is equally beholden to bond traders, who, to his benefit, pick Maryland like a greasy bucket of finger-lickin’-good fried chicken.
He’s lucky. Investors’ willingness to scoop up state debt is a big reason Mr. O’Malley has been allowed to defer hard budget choices and paint himself as fiscally responsible. Exhibit A: The state’s stellar credit rating has allowed it to borrow hundreds of millions to pay for capital projects that should have been paid for in cash. This means that today’s streets are paved with tomorrow’s taxes. It also means revenue collected to upgrade wastewater plants, for example, is used for other purposes in the general fund, with bonds issued to replace the cash…
These are the same agencies now under congressional scrutiny for repeatedly giving AAA ratings to thousands of securities based on subprime mortgages held by people who could never repay them. It is also the same group of agencies upgrading thousands of governments across the nation in recent months even as state and local finances deteriorate.
Furthermore, unlike Maryland, Texas has a fiscally responsible steward at the helm in Governor Rick Perry. Yes, Texas faces an $18 billion budget gap but Perry also socked away $10 billion in a rainy day fund and has directed state agencies to trim five percent across the board. Also, unlike O’Malley, Perry turned down certain stimulus funds that would have saddled his state with future inflated budget baselines.
Whereas Maryland’s general fund spending grew under Martin O’Malley, Perry spent $1.6 billion less in his current budget from the previous plan.
Governor Perry cut taxes for 40,000 small businesses in Texas. Martin O’Malley soaked Maryland small businesses with tax increases and deleterious regulations.
However, if for a moment, we accept the Democrats’ premise that Maryland is comparable with Texas. Then Mary Kane is correct as latest Bureau of Economic data available show that Texas has grown it’s economy more than Maryland.
But we’re talking about Maryland Democrats and you can’t accept anything they say at face value.