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For local delegation, 2007 was a good year, but 2008...

May 16, 2007|by BOB MAGINNIS

If Tuesday's post-legislative breakfast had been a baseball game, Michael Johansen would have been its designated hitter.

Johansen, hired to lobby the Maryland General Assembly by the Hagerstown and Washington governments and a variety of local business organization, stood in yesterday for local delegation members, who did not attend.

Johansen did some bragging for them - the county received $176.5 million in state aid, an 18.4 percent increase.

However, he also warned those who attended that closing the state's $1.5 billion "structural deficit" might involve increased taxes and reduced aid to local governments.

But for this year, the delegation secured $9 million in school construction money, $1.4 million for the central booking facility, $150,000 for the Barbara Ingram School for the Arts, $150,000 for the Washington County Museum of Fine Arts and $100,000 for the restoration of one part of the C&O Canal.

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Johansen said those funds didn't come automatically, but as a result of the the delegation's hard work.

So much for the good news. Johansen said that $1.5 billion structural deficit - the difference between expected revenues and projected expenses - will likely result in some revenue-raising measures.

Although Gov. Martin O'Malley has called for $200 million in cuts to state government - a target Johansen expects him to hit - the previous administration did a fairly good job of restraining the growth of government.

As a result, the O'Malley administration got through its first year without having to make painful cuts. But to hear Johansen tell it, with a limited amount left in the state's Rainy Day Fund, the amount that can be taken from it will be restricted.

So what are the possibilities?

Johansen said that state income tax, lowered under Gov. Parris Glendening by 10 percent, could be raised by that amount again.

The state sales tax could go from 5 percent to 6 percent, Johansen said, adding that a variety of consumer services, such as dry cleaning, could be added to the list of things that might be taxed.

On professional services, however, Johansen said that taxing them is more difficult. He noted that in the case of an engineering firm, taxing its services would put it at a competitive disadvantage with those in other states.

If faced with such a tax in Maryland, he said, a firm such as his own, which does lobbying, could simply decide to move to Washington, D.C., while continuing to provide the same services.

Johansen said there could be a special session as soon as October, to deal with the budget issue. Gov. O'Malley has made a limited commitment to slots at the state's horse tracks, to save the racing industry, Johansen said.

Both House Speaker Michael Busch and Senate President Thomas V. Mike Miller Jr. favor a more comprehensive approach that will draw revenues from a variety of sources, he said.

Aid to local government might be on the chopping block, too, Johansen said.

Lawmakers might reason that if local officials agree the services state dollars provide are worth continuing, they'll fund them locally, he said.

In answer to questions, Johansen said that for the counties whose residents depend on the Chesapeake Bay for a lot of their recreation, the idea of "going green" is more attractive.

That was behind the push for California emission standards for cars sold in Maryland, he said. It also led to requirements for more efficient appliances, transformers and other equipment, he said.

But there will be no new limits on energy costs and Baltimore Gas & Electric is expected to file for a 50 percent increase this summer, he said.

(In a January hearing, Allegheny Power officials proposed phasing in a 60 percent hike in 15 percent increments between now and 2010. In answer to my questions about what input the local delegation had into that plan, an Allegheny spokesman said that at that point, there had been none.)

On the prisoner-release issue - when inmates released from the local state prison complex settle here instead of going back to where they were sentenced - Johansen said the delegation did not always "speak with a single voice."

During the last administration, Johansen said that corrections officials' position was that it wasn't a problem.

The fact that last year was an election year and that the leadership of the delegation changed hindered possible progress on the issue, he said.

"It's one of the things we need to talk to Del. (LeRoy) Myers about and to Del. (John) Donoghue about, Johansen said.

Bob Maginnis is editorial page editor of The Herald-Mail newspapers

(Editor's note: A podcast of this meeting will be available at the Web site of the Hagerstown-Washington County Chamber of Commerce at www.hagerstown.org.).

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