Reflections on the election

Now that the glow from all that late night election-return television watching has faded, we thought we'd share some thoughts about the impact of the election on Maryland going forward.

The most important issue facing Maryland in the next three months is the looming fiscal cliff (or slope, as some have called it). Either the lame duck or the newly elected Congress will have to decide what, if anything, to do about expiring federal tax cuts and the mandatory spending cuts (known as sequestration) set for January. While both measures might help reduce the federal deficit in the short-term, the long-term effects would be devastating in human terms, and would likely push the country back into recession. The Washington Post has collected a number of graphics together to help explain the fiscal cliff at the national level.

In Maryland, the effects of falling off the fiscal cliff would be multiple. The state would see an immediate reduction in federal aid of $117.6 million (see pages 22-24) due to sequestration in fiscal year 2013. The state would also lose up to 53,500 jobs and $268 million in personal income and sales taxes, the largest local revenue sources for the state. This loss of revenue and increased demand for services by the newly unemployed would put significant pressure on the state's budget. The effect in later years would be even more severe.

Not to mention the cuts in federal aid to county and local governments.

Gambling expansion passed, and would raise some additional funds for the state. However, the increase in revenue for FY 2013 would be a bare $58 million, with not more than $200 million per year by 2017.Plus - the Department of Legislative Services' budget projections assumed that the referendum would pass. So the money is not "extra." it's already accounted for in the projections.


It seems unlikely that Congress will address the fiscal cliff before America falls off it. More likely is that the newly elected Congress takes up the issue after the fact early next year. It's unclear what the solution to the current gridlock might be, however. Voters mostly maintained the status quo last night. Democrats still control the White House and the Senate, while Republicans retained control of the House of Representatives. The hyper-partisan polarization that created the fiscal cliff will probably not abate.

Complicating matters for Maryland, the governor will likely have to present his budget to the General Assembly before the matter is resolved. The governor may reserve some amount in the budget to serve as a contingency for the fiscal cliff or it's resolution. or he may submit a budget in January based on the most reasonable assumptions, and leave it to the legislature to make adjustments as the budget bill works through the legislative process. If there is no answer when the legislature take final action on the budget in late march or early April (and that would be bad), then the Governor may propose adjustments to the budget for approval by the Board of Public Work after the budget is enacted.

In short, the national election - whatever else it accomplished - has done little to reduce Maryland's level of budget uncertainty.

The Week Ahead (Election Edition)

Tomorrow is election day, and MBTPI encourages everyone to vote. This is an important election year for Maryland, with a number of ballot issues affecting the state's budget and vulnerable populations. We have not taken a position on any particular ballot issue; however, readers may be interested in our analysis of Question 7, the gambling expansion referendum. You can find out where your polling location is and look at a sample ballot ahead of time on the Board of Elections website.

Last week Gazette.net quoted Neil Bergsman about the effect sequestration would have on Maryland, and Reuters highlighted our brief on expanded gambling. I also blogged about the national employment figures for October.

Tuesday, November 6th

• House Health And Government Operation Committee meets for a briefing on naturopathic medicine. 2pm at the John Hopkins Hospital Sheikh Zayed Tower, room 2069B, 1800 Orleans Street, Baltimore.
• Election Day 2012. Maryland voters decide several issues with budget and policy implications, including whether to expand gambling, the DREAM Act, redistricting, and same sex marriage.

Wednesday, November 7th,

• House Health And Government Operation Committee holds briefings on access to habilitative services (HB 1055); proposed clinical laboratory regulations (Relates to HB 66); the Prince George's County Health System; and the recent meningitis outbreak and regulation of facilities that compound drugs. 1pm in room 240, House Office Building, Annapolis.
• Joint Committee on Children, Youth, and Families meets to discuss local management board budget considerations. 10am in room 130, House Office Building, Annapolis.
• Task Force to Study Maryland Insurance of Last-Resort Programs meets for a discussion comparing the four insurer of last resort programs. 2pm in room 231, House Office Building, Annapolis.
• Health Services Cost Review Commission meets. 10am in room 100, 4160 Patterson Avenue, Baltimore.
• Maryland Nonprofits offers Major Gifts: Not the Impossible Dream. This is a Maryland Nonprofits training; for more information or to register go to their events page.

Thursday, November 8th

• Joint Committee on the Management of Public Funds receives an update from the Comptroller and Treasurer, and a review of local government audits by the Office of Legislative Audits. 1pm in the William Amoss Hearing Room, 4th Floor, Senate Office Building, Annapolis.
• Maryland Health Insurance Plan Board of Directors meets. Topics include medical claims review, the quarterly financial review, a federal update, application and enrollment Reports, a procurement update, COMAR update, and Executive Director search update. 9am in Suite 630, 1 Calvert Plaza, 201 E. Baltimore Street, Baltimore.
• Maryland Advisory Council for Virtual Learning discusses the history and status of online learning in Maryland. 1-3pm in conference rooms 6 and 7, 200 W. Baltimore Street, Baltimore.

Friday, November 9th

• Board of Social Work Examiners meets. 11am in room 109, Metro Building, 4201 Patterson Avenue, Baltimore.

The Week Ahead

Last week the House and Senate appointed their budget conference committee members. See MBTPI's recommendations for the committees and let them know you support a sustainable state budget here.  

Monday, April 2nd

• 83rd day of the legislative session, the Constitutional target for passing the state budget. If (as now seems likely) the FY 2013 budget is not finalized, the Governor will issue a proclamation extending the session beyond the usual 90 days, during which the legislature could only work on the budget.  This year, that will be a formality. We expect the budget process to conclude before April 9th, the last day of the regular session.

Tuesday, April 3rd

• Primary Elections.  Find your polling place and learn more here.

Wednesday, April 4th

• Second reading of the capital budget in the House (subject to change).

Thursday, April 5th

• Third reading of the capital budget in the House (subject to change). 

Friday, April 6th

• BLS updates the national employment situation.  In February the national unemployment rate was 8.3 percent, unchanged from the month before but down 7/10ths of a percent from February 2011.  Encouragingly, February also saw an increase in employment for the eighth straight month.