Maryland Senate Democratic Caucus Comes Out for Crony Capitalism
The Maryland Senate Democratic Caucus briefly today came out in support of crony capitalism and reckless debt spending.
For a time on their Facebook page, the Caucus lamented that the Board of Public Works voided the lease at State Center.
Ironically, the post was deleted after Red Maryland helpfully pointed out that one of the critics of the was one of the members of the Maryland Senate Democratic Caucus, State Senator Rich Madaleno
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It’s interesting, but not all that unsurprising that the Maryland Democratic Caucus is sad the the lease was voided. As we have noted at Red Maryland in the past, the developers selected for this project were politically connected Democratic donors. The Maryland Public Policy Center noted that the State Center project was basically a wealth transfer of $127 million in taxpayer funds to connected donors, Maryland was run like a Banana Republic during the O’Malley Years.
The Senate Democratic Caucus support of the State Center lease actually gets worse when you know some more of the particulars around the lease itself.
The action the Board of Public Works took yesterday was the rejection the execution of the lease. The lease itself was signed by O’Malley in 2010 and was extremely disadvantageous to the state; the state would be basically paying $35 per square foot to a politically connected donor to lease office space in a building they own. Incidentally, the current going rate for office space in Baltimore ins $19 per square foot. Thanks to Martin O’Malley, taxpayers were to be on the hook for an 85% upcharge in rent just to keep Democratic donors happy.
At the time the lease was signed, State Treasurer Nancy Kopp (noticeably a Democrat) determined that the lease was not a capital lease, but that final determination would need to occur at the time of the execution of the lease, which turned out to be yesterday. A capital lease triggers issues because it become a capital project, requiring additional bonds. The Execution of the lease was not brought by the Department of General Services to the Board of Public Works until yesterday.
It was determined that the lease was going to be capital lease because it was going to exceed the 90% debt threshold needed to be classified as a capital lease. As it turns outm the debt threshold was 117% This was problematic for two reasons:
- The Board of Public Works cannot approve a capital lease without the explicit approval of the Maryland General Assembly and the Capital Affordability Board. Neither group had weighed in on the project.
- The Lease would puncture the debt ceiling and exceed the debt capacity, meaning no other capital projects could be funded in the state.
So what the Maryland Senate Democrats are doing is complaining that Governor Hogan and the Board of Public Works didn’t approve the execution of a lease in violation of state law that would have been little more than a handout to Democratic donors and would have recklessly imperiled the state’s ability to commit to any other projects.
Is it any wonder then that the Democrats want to pretend that they never supported something so irresponsible and reckless?