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O'Malley looks to put his record to the test

FinanceExecutive BranchElectionsBudgets and Budgeting

Martin O'Malley stood outside the Annapolis capital on a chilly January day more than three years ago, telling a jubilant crowd gathered for his inauguration that his priorities of boosting education and reducing crime "will require sacrifice."

As he now seeks the privilege of continuing to lead, the governor must convince voters that sacrifices made during his term - many unforeseeable in early 2007 - were worth the effort.

O'Malley, a Democrat, finished the fourth and final regular General Assembly session of his term last week, meaning his record as governor is nearly complete.

For the next few months, he'll be on a sales mission, trying to convince Marylanders that decisions he made during the worst economic downturn in generations put the state on solid footing.

At the same time, his political foes will try to define his time in office differently.

"A disaster," as former Republican Gov.Robert L. Ehrlich Jr., trying to get his old job back, has put it.

Less than a year after his inaugural speech, O'Malley steered through a sales tax increase and slots package in an effort to fix Maryland's finances for good. Then the economy tanked, and the stubborn downturn, which many think might finally be ending, "forced us, in pursuit of our goal, to play a lot of defense," O'Malley said in an interview last week.

An incumbent running in a year when voters seem angry at politicians in office, O'Malley could spend as much energy talking about the past as what he'd like to do over the next four years.

Still, said Donald F. Norris, chairman of the public policy department at University of Maryland, Baltimore County, "I think he runs with his record" rather than away from it, and willingly fields the brickbats from Ehrlich.

"Ehrlich is going to claim O'Malley is Satan incarnate, and O'Malley will claim the same thing about Ehrlich," Norris said. It's going to be absolutely great theater."

Arguably the defining moment of the O'Malley administration came early on, during a frenzy of legislative activity in November 2007. In a risky move, the new governor summoned the legislature for a rare special session. The goal was to make sure the state was collecting enough money to fix permanently an imbalance between spending and tax receipts.

Asking lawmakers to swallow a bitter pill that would clear the way for an ambitious agenda, O'Malley pushed through a sales tax increase from 5 percent to 6 percent, along with higher income taxes on the rich and on corporations.

O'Malley also cut income taxes for those on the middle and lower economic rungs, set the stage for legalizing slots, brought tens of thousands more onto Medicaid roles and set up dedicated funds for the Chesapeake Bay restoration and transportation.

"That was the crucible, wasn't it?" O'Malley said. "We had in that crucible of a special session not only the tough and unpopular choices, but we also had the seeds of some nation-leading progress."

The decisions made during that three-week period are sure to be debated vigorously in the months ahead.

Neil Bergsman, a budget director under former Democratic Gov.

Parris N. Glendening, says the taxes O'Malley raised put the state in a stronger fiscal position than most going into the recession.

"It is what made the difference between our difficult circumstance and the kinds of other catastrophes that they've had in other states," he said.

Nevada's governor, for example, has proposed cutting health care funding for the poor, including not paying for dentures, eyeglasses or adult diapers.

California considered borrowing $5.5 billion to balance its budget and is ending programs that provided health care to some million children.

But detractors say taxes raised during the 2007 special session set the state on a downward spiral. "We just make it more expensive to live and work here," said Christopher B. Summers, president of the conservative Maryland Public Policy Institute.

He and others point to a higher tax rate on Marylanders who earn more than a million dollars annually, a levy enacted in 2008 that critics say caused some wealthy people to flee the state. An analysis by the comptroller's office showed that the number of people making $1 million a year dipped by 30 percent from 2007 to 2008.

The special session also yielded the framework for Maryland's slot-machine gambling plan. Voters approved a constitutional amendment allowing the gambling program in November 2008, expecting the rapid arrival of $600 million in new revenue and an end to years of intractable debate on the subject in Annapolis.

But the complexity and details of the plan have been a burden. Slots parlors can only go in five locations spelled out in the constitution, and Maryland's tax rate on gambling proceeds is high. In part because of those factors, only three of five available slots licenses have been granted. No sites are open. No annual revenues are arriving.

"Very flawed," is how Ehrlich describes the program.

O'Malley blames the cumbersome design of the plan on the poisonous legislative atmosphere created by Ehrlich, who failed for four years to get a slots bill enacted. Nobody would like to see those dollars come in more than me," O'Malley said.

Electricity rate issues could also spark the campaign season.

O'Malley campaigned in 2006 on a pledge to roll back a 72 percent BGE rate increase, triggered by a deregulation plan passed by the Assembly years earlier. After chastising Ehrlich for being too close to utility interests, O'Malley found he could not undo the rate hike.

He's spent years trying to make amends. In 2008, the governor steered through the Assembly a $2 billion settlement plan with BGE parent Constellation Energy Group, which provided $170 credits for each customer.

In 2009, O'Malley tried unsuccessfully to re-regulate some parts of the state's power system, hoping to provide more savings for consumers.

The Senate approved his plan, but it failed in the House of Delegates, and O'Malley did not pursue it this year.

"I think that he is going to be wide open on the question of not getting anything done for the consumer," said state Sen. E.J. Pipkin, an Eastern Shore Republican. "To this day, I'm mystified that the governor didn't follow up on re-regulation."

It took the governor two years to get a speed-camera plan through the legislature, fighting off critics who complained of government intrusion and that the electronic devices were merely a revenue-generator for government.

After a failed effort in 2008, the camera bill passed last year, and several counties have installed the devices near schools and in road construction zones. They still spark strong feelings.

The governor put more of his political capital on the line a year ago, when he pushed for a repeal of Maryland's death penalty. A longtime opponent of capital punishment, O'Malley said the time had come to end the practice in Maryland, given flaws in the criminal justice system exposed in many states.

The legislature met him part way in 2009, limiting capital cases to those where there is DNA or other biological evidence, a videotape of the crime or a voluntary, video-recorded confession. The governor signed off on the restrictions - considered the most stringent of any death-penalty state - saying they were the best he could do.

Ehrlich has said he plans to raise the capital punishment issue during the campaign, noting that O'Malley has never signed an execution warrant.

O'Malley's tenure has been marked by repeated efforts to curtail government spending, and the budget plan adopted this year spends less than last year. Maryland's spending grew 25 percent in Ehrlich's four years, compared with 9 percent under O'Malley, although mandated education increases account for much of the difference.

At the same time, O'Malley has been loath to cut state aid to counties and cities. This year, he helped beat back efforts by Senate President Thomas V. Mike Miller to shift some teacher pension obligations to local governments.

Critics say that protection of local governments has come at a cost. State workers have been furloughed for three years in a row. This year's budget is balanced, but a $1.5 billion gap between revenue and expenses remains for next year.

At a bill-signing ceremony last week, Miller reminded O'Malley that more is needed. "Hopefully, next year we can put icing on the cake, Governor, and continue to restore the state's fiscal stability," he said.

"You've made great steps, but there are strides to make and we are going to get the job done."

Maryland's governor can tick off accomplishments: Wall Street analysts have reaffirmed the state's prized AAA bond rating. Tuition at the state's universities was frozen for four years (although a 3 percent increase is now coming). Crime is down.

Still, Republicans are far from impressed. Ehrlich dismissed the governor's tenure as "a lot of whining ... a lot of complaining and a lot of real and perceived enemies being the cause of his problems."

Whoever is the next governor could benefit if times get better, and there are glimmers of economic hope. Roughly 35,800 jobs added to the state's economy in March, the first time in two years that there's been a net increase. And tax revenue figures for the first nine months of the current fiscal year show that the state collected $47 million more than expected.

O'Malley wants to come back for more.

"I consider myself lucky to serve at a time when I'm needed," he said."The progress that we made, it was not inevitable."

Copyright © 2014, The Baltimore Sun
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