Larry Hogan's surprising victory will scramble Annapolis; here are some of the key questions about how divided government will work:

Can Hogan budget differently?


Gov.-elect Larry Hogan made slowing the growth of state spending and cutting taxes the two most identifiable themes of his campaign, but since the election, his rhetoric has undergone a shift in tone. Where once he talked about $1.5 billion in waste, fraud and abuse that had supposedly been identified by auditors, he is now talking about "strong medicine" and hard decisions for the state budget, which has been thrown out of balance by weaker than expected growth in tax receipts.

Here's the rub: The vast majority of the budget is driven by formula-based spending over which the governor does not have sole discretion. Changing it requires the cooperation of Democratic legislators. Even if they play nicely with Mr. Hogan (see below), they will be heavily lobbied by the interest groups who succeeded in getting those formulas enshrined in law in the first place. Then comes the next question: If Mr. Hogan succeeds in bringing the state to the point where it is bringing in more than it spends, will he be able to convince lawmakers to dedicate the surplus to tax cuts rather than new spending?

Mr. Hogan has brought in an extremely capable aide to parse these decisions in Robert R. Neall, the former Anne Arundel executive and state senator who has served in both parties and has as good an understanding of the intricacies of the state budget as anyone. He has strong and long-expressed opinions about what the state should be doing with its finances that were often at odds with O'Malley administration policies, and his assistance gives Mr. Hogan a good chance to put a real stamp on his first budget, despite the requirement that he submit it two days after his inauguration.

Our prediction: The governor and legislature will come to some accomodation on spending reductions during the next three months, but don't expect tax cuts this year.

What will the Mikes do?

House Speaker Michael E. Busch and Senate President Thomas V. Mike Miller have been saying all the right things about wanting to work with Maryland's new Republican governor. In public, anyway. What's going on behind the closed doors of Democratic caucus meetings? We can only guess.

Contrary to popular impression, the Democratic legislature's relationship with the state's last Republican governor, Robert L. Ehrlich Jr., was not rocky from the get-go; the two sides enjoyed at least a brief period of cooperation before things started to fall apart over the issue of slot machine gambling and, later, medical malpractice reforms.

By the end, though, Mr. Miller was proclaiming that Democrats would bury Republicans face down so it would be "10 years before they crawl out again." He and his fellow Democrats made a sport of passing legislation knowing it would draw a gubernatorial veto that they could then override. The so-called Walmart bill was a prime example, but so was an increase in the minimum wage and an effort to allow in-state tuition for some undocumented immigrants.

Our prediction: The presiding officers and their lieutenants won't go into full battle mode right away, though they likely won't be full partners in the Hogan agenda either. A key test of the dynamics will be the fate of legislation requiring businesses with more than 10 employees to offer paid sick leave. It's been introduced twice before, and it's just the kind of legislation that polls well with voters but poorly with business groups that would be tailor-made for provoking a confrontation with Mr. Hogan. If Messrs. Busch and Miller are giving Mr. Hogan some breathing room, it gets bottled up in committee. If they're going for the jugular, it lands on his desk.

Can Hogan assemble a strong team?

Governors are often evaluated on how well they can work with the legislature to advance their agendas, but the real meat of the job is in the day-to-day running of the 70,000-employee operation that is the state government. Mr. Hogan has experience as a businessman and as a member of the Ehrlich cabinet, but he has never run anything on this scale. Will he be able to recruit the right people for his administration and effectively manage them?

That poses a greater than usual challenge for Mr. Hogan, for a few reasons. For starters, Republicans have only run Maryland's state government for four out of the last 45 years. That leaves him without a ready pool of conservative-minded candidates with direct experience in the agencies he's looking to fill. Governor Ehrlich ran into the same problem, and though he had some extremely talented members of his administration — his former budget secretary and chief of staff James C. "Chip" DiPaula being at the top of the list — others proved less able. He plucked a number of Republicans from the legislature to fill top jobs, which robbed him of experienced allies in the General Assembly while in several instances also failing to provide him with good managers.

Of course, experience doesn't always guarantee success. In most cases, Governor O'Malley got fairly high marks for his cabinet choices, at least initially. Several of them had held the same jobs under former Gov. Parris N. Glendening, and others were recruited from similar agencies in other states. But the biggest black eyes of his term — the corruption scandal at the Baltimore City Detention Center and the failed launch of Maryland's health insurance exchange website — were related to poor management.

Mr. Hogan has the added burden of coming into office on a pledge to change Maryalnd's government — to make it both more business friendly and more efficient. He will need managers who are capable not jost of running state agencies as they are but of developing a new vision for them and carrying that vision out. It's not an easy task.


Meanwhile, he also has to get many of his appointees through Senate confirmation. Managing that process was Mr. Hogan's job in the Ehrlich administration, so he should theoretically have an advantage there.

Our prediction: Based on his appointments so far, it looks like Mr. Hogan is putting together a mix of people with experience in the Ehrlich administration with newcomers, including some whose careers have been primarily in the private sector. Of particular interest is his decision to keep Mr. O'Malley's Juvenile Services Secretary Sam Abed, whose notable achievements include obviating the need for a new youth jail in Baltimore through more enlightened policies toward juvenile justice and better management of his agency. By re-appointing him, Mr. Hogan is sending a signal that he's putting competence first.

Even so, it's entirely possible that he'll get at least one confirmation fight in the Senate. That happened to Governor Ehrlich, whose initial pick for environment secretary was rejected, and it wouldn't be surprising to see that body flex its muscles again.