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Democrats should blame themselves for slow job growth

by Christopher B. Summers

JULY 20, 2017 Bookmark and Share

In what could have been a headline ripped from The Onion, Maryland Democrats last week blasted the Hogan Administration for not overturning their policies. OK, not exactly. They blamed him for slower than average job growth compared to the nation during his tenure.

But that amounts to shaming him for not being able to change policies they enacted over the past decade that have led to thousands of people fleeing the state and Baltimore City (which came in third in the nation behind Chicago and Detroit for population loss in the latest Census report) for better job opportunities. Maryland Republicans are a minority in the General Assembly. By definition they do not have the power to undo the legislation that has led to the wage and job growth stagnation of today.

If Democrats want to blame anyone for today’s economic malaise, they should look back to their 2007 selves, which passed the largest tax increase in Maryland’s history after then-Gov. Martin O’Malley called a Special Session to plug a massive budget deficit. Before then, Maryland essentially had a nationally competitive flat income tax rate for all residents. The progressive rate passed during that Special Session punishes high income earners – the same ones who create jobs.

Since that time Democrats have chosen to only pile on more taxes and fees. Other state legislators might have asked how these taxes and fees correlated to thousands more people each year leaving Maryland than coming here. (And BTW, those leaving earn more than those who arriving, compounding the state’s revenue problem.) But not Maryland Democrats. Instead, they blame the person who was elected precisely because their policies left so many feeling overtaxed and underemployed without apologizing for their chief architect role in creating the problem.

It is refreshing to see Maryland Democrats care about jobs, however, after spending so many years taking them for granted because of the state’s proximity to the federal government.

But if they really want to attract new business and jobs, they must also address the structural budget problems they created through their decades of hegemony in the General Assembly. With over 82 percent of the budget already accounted for through mandatory spending programs, Democrats have made it virtually impossible to stop the tax and spend cycle that almost constantly requires more money from state taxpayers.

As a January Maryland Public Policy Institute report notes, “Maryland risks drastic economic changes if it does not address its long-run fiscal problems soon. Despite a balanced budget provision in the state constitution, the state government has accumulated $17.21 billion in debt—about $2,880 per capita, 30.4 percent higher than the U.S. state average.

Worse, Maryland’s unfunded pension liabilities are alarming. The state’s ability to pay 143,000 retired teachers, state police, judges, and other former employees is in jeopardy.”

Gov. Hogan has tried to lower mandatory spending, but Democrats have blocked him, setting up a cycle that could put Maryland on the path to becoming Illinois, the state columnist Chicago Tribune John Kass charmingly describes as the “Venezuela” of the United States.

As a reminder, Chicago lost the most people of any city in the country last year; Baltimore came in third.

If Democrats want to prove themselves capable of more than irony, they must start working with Gov. Hogan and Republicans in the General Assembly to attract the businesses and jobs they spent decades taking for granted as an ATM. Six million lives depend on it.


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