Tuesday, April 30, 2013

O'Malley on Prison Scandal: "A Very Positive Achievement"

In a press conference today, Governor Martin O'Malley referred to the corruption scandal at the Baltimore City Detention Center involving correctional officers smuggling cell phones and other contraband into the facility to assist the Black Guerrilla Family gang's criminal enterprise, as "a positive development."

Governor Martin O'Malley says that he "shares the public revulsion" over a corruption case involving inmates and corrections officers at the Baltimore City Detention Center.However, he is casting the recently announced corruption case in a positive light by saying it represents a strong step toward fighting gang crime.
O'Malley described it Tuesday as "a very positive achievement" in the state's fight to dismantle gangs.
"It is because of the revulsion that all of us have towards violent murder gangs in our state, that I view these indictments as a very positive achievement, and a very positive development in our fight to dismantle gangs," O'Malley said at a news conference Tuesday.
Yes, you heard that right. O'Mall'ey labeled the Department of Public Safety and Correctional Services essentially ceding control of a major detention facility to a criminal gang "a very positive achievement."
Did any of the reporters bother to ask O'Malley why his vaunted StateStat government performance program did not have any data on seized contraband for BCDC.
Listen to the WBAL audio and hear O'Malley in full turd polishing mode.

More below the fold.

Monday, April 29, 2013

The Broadside, 8pm Tonight

Tonight on The Broadside at 8pm.

We break down the Baltimore City Detention Center scandal with Delegate Mike Smigiel.
Congress  wants to exempt itself from Obamacare andlast week it  quietly killed transparency provisions in the STOCK Act, which requires  financial disclosures by high level government employees (Congress and the President included) be posted online in a searchable database.  
Tune in tonight at 8pm on The Red Maryland Network.

More below the fold.

Sunday, April 28, 2013

No StatStat Contraband Data for Prison At Center of Baltimore Prison Scandal

StateStat, Governor Martin O’Malley’s vaunted data metric system for measuring government performance, contains no specific information on contraband seizures for the facility at the heart of prison scandal where the U.S. Justice Department alleges several guards assisted the Black Guerrilla Family gang in drug trafficking and money laundering.

According to the federal indictment 13 sate correctional officers assisted the BGF’s criminal enterprise outside the prison by smuggling cellphones, drugs and other contraband into the state run Baltimore City Detention Center.  BGF kingpin, Tavon White, impregnated four female prison guards.  On an intercepted cell phone call White said, “This is my jail. You understand that? I’m dead serious. I make every final call in this jail.”

Despite boasting about “improving gang intelligence” and being “a leader in cell phone interdiction” DPSCS StateStat reports list no information about the number of cell phone or other contraband seizures, if any at BCDC. 

The latest StateStat contraband summary detailing DPSCS seizures, issued in March of 2012, does not list any specific contraband seizures data for BCDC.  Notes from that March StateStat meeting indicate a decrease in cell phone seizures at maximum-security facilities, but that cell phone smuggling is “consistently pervasive” at pre-release facilities.  The meeting notes also report that monitoring cameras were installed “on the Eager St. side of BCDC” to monitor “cell phones thrown over the wall.”  The report also noted a 160 percent increase in seizures between November and December of 2011. 

This begs the question why doesn’t StateStat break out cell phone and other contraband seizures at BCDC as it does for other correctional facilities?

"Once again state stat does not work as advertised" said Larry Hogan, Chairman of the grassroots group Change Maryland. "Cell phones in prison are the keys to the kingdom, allowing bad actors like Tayvon White to do everything from ordering hits on the street to getting drugs and other contraband inside the prison.  O'Malley should stop talking about state stat unless it works."

According to the StateStat report web page, 29 DPSCS State Stat meetings were held in 2011, but only 4 in 2012.  None of the reports from 2011 contain contraband seizure information for BCDC.

O’Malley, who is weighing a presidential run in 2016, often touts his data-driven approach to governing embodied in StateStat.  However, over the last few years, a series of legislative audits have revealed: a lack of accountability for the state’s speed camera vendors, chronic cronyism and violations of state procurement laws at the State Highway Administration, failure of the state education department to conduct background checks for child care workers, lack of monitoring of state tax credits by the Department of Business and Economic Development, failure of the state labor department to inspect elevators, and millions in lost and overpaid funds at the Developmental Disabilities Administration.

Now, the BCDC scandal appears to have put another serious dent in credibility of StateStat.  

More below the fold.

Friday, April 26, 2013

Take the Money and Run

There’s an old saying that “money talks and bullshit walks.”  However, when it comes to state tax policy money walks as well.  According to the new book How Money Walks Travis H. Brown, state tax policies have facilitated the movement of $2 trillion dollars between the states. 

 Using Internal Revenue Service records from 1995-2010 Brown analyzed the movement of people and money among the states. 

 In an interview with Watchdog Wire, Brown revealed that the data shows a strong correlation between higher tax states and net out-migration and loss of wealth.
 This migration evidence is consistent with long-term econometric analysis observed by Dr. Art Laffer over the last forty years.  The nine states without a personal income tax gained collectively over $146 billion from 1995 to 2010.  Conversely, the nine states with the highest personal income tax rates, or per capita income burdens, lost more than $100 billion.  Taxpayers have been moving to places where their work is more likely to be rewarded in every paycheck.
 You can use the How Money Walks Web app to view migration data in your state.

 Maryland is high tax.  Since 2007, Maryland, under one-party Democratic rule, has implemented 37 tax/fee increases totaling more than $3.1 billion annually, according to the non-partisan grassroots group Change Maryland.  Last year Maryland created a new, higher, income tax rate for those making over $100,000 and phased out personal income exemptions at certain levels.  In 2007 Maryland create new marginal income tax rates ranging from 4.75 percent to 5.5 percent, and implemented the ill-conceived millionaire’s tax, raising rates on those earners from 5.5 percent to 6.25 percent.

So how many residents, and how much wealth has Maryland lost?

Since 1995 Maryland has lost 27, 433 residents, taking with them a net $6.5 billion in annual adjusted gross income.  The majority of that wealth has been lost to Florida, North Carolina, Virginia, Pennsylvania, and West Virginia.  Florida by far has been the greatest benefactor of Maryland’s tax policies.  More than 33,000 people have fled Maryland for the Sunshine State, taking $3.7 billion with them. 

Maryland is not only losing residents to other states, but job creating businesses as well.  Between 2007-2010, Maryland lost 6,500 small businesses.  At 8.25 percent Maryland’s corporate tax rate is nearly three points higher than neighboring Virginia, and a major reason why Maryland is at a major competitive disadvantage.

 How Money Walks also digs down to metropolitan statistical area data.  The MSA data paints a similarly gloomy picture for Maryland’s major metropolitan areas surrounding Baltimore, and Washington, D.C.  Baltimore lost more than 32,000 residents taking $2.48 billion in annual AGI, most of it to neighboring Baltimore County.  However, even though Baltimore County gained over 37, 645 residents from Baltimore City, it has lost $1.61 billion in annual AGI, most of it to Harford, and Carroll counties.   A significant amount of people and money have fled both the city and the county to York County PA, a short drive north over the border.

Maryland’s two largest suburban Washington jurisdictions Montgomery and Prince George’s counties also saw significant out-migration and wealth loss.  More than 24,000 residents left Montgomery County along with $4.33 billion in annual AGI.  Most of the wealth and people moved west to Frederick County.  Prince George’s County saw 27,880 people leave its borders taking with them $3.47 billion in annual AGI. 

Take note of another interesting correlation. The three counties with the largest out-migration of residents and wealth are the same counties that continually elect the politicians that raise the taxes that lead to the exodus.  

More below the fold.

Thursday, April 25, 2013

NO Red Maryland Radio Tonight

Reminder that there is NO new episode of Red Maryland Radio Tonight. Greg is taking a much deserved night off, and I'm at a YRNF Board Meeting in Texas.

However, as a reminder, you can still listen to our special episode from Sunday night.

We'll be back with a brand new show next week.

More below the fold.

Fear, Loathing, and More Fear in the Fourth Estate

There was an editorial in from Tuesday's Washington Post which caught my eye: "What Would the Koch Brothers do to the Los Angeles Times?"  As many of you know, The Koch Brothers are looking into buying the Tribune Company and its newspaper chain, which locally includes our very own Baltimore Sun.

My first thought as to what the Koch Brothers would do would be "make money" since they are private businessmen looking to buy a private business. But Harold Meyerson, the author of the piece, of course goes straight for paranoia:

Being human beings, all newspaper owners have politics of their own. Since the 19th century, however, most haven’t gone into business primarily to advance a political perspective. Profit, professional and civic pride, and recognition have largely motivated them. It’s hard to see how any of these factored into the Koch brothers’ calculations. 
In their very-brief no-comment on the sale rumors, the Kochs took care to note, “We respect the independence of the journalist institutions” owned by Tribune, but the staffs at those papers fear that, once Kochified, the papers would quickly turn into print versions of Fox News. A recent informal poll that one L.A. Times writer conducted of his colleagues showed that almost all planned to exit if the Kochs took control (and that included sportswriters and arts writers). Those who stayed would have to grapple with how to cover politics and elections in which their paper’s owners played a leading role. It’s also unclear who in Los Angeles, one of the nation’s most liberal cities, would actually want to read such a paper, but then the Kochs don’t appear to view this as a money-making venture.
There is a lot you can pick up from those two paragraphs. One, of course, is the tried and true tradition of newspapers having an editorial slant, particularly on the opinion pages. The divide between those who watch Fox and those who watch MSNBC is as old as newspaper publishing, when each party had their own news organs in majors cities in the mid-19th century. 
The other major aspect of this, of course, is the idea that "almost all" L.A. Times writers would choose to leave the paper if the Koch Brothers took over. Why is that? Invariably, it comes down to two things. One, of course, is politics. It doesn't take a rocket scientist to realize that reporters have a liberal bias and the idea of working for owners who actually have a conservative bias might be a bridge too far for some. But there's an alternative theory, too.
When you're involved in politics, one of the first things you have to start learning about is media. Not just the idea of communicating one's message to the public, but also how to get free and earned media from the press, particularly the local press who will do most of the coverage of your campaign. Often times at papers, even "big-city" papers like the Sun, reporters will often take a press release or a series of talking points and regurgitate it onto the their broadsheets uncontested. Reporters, in many cases, are lazy. It's a laziness that has been brought about by an institutionalization of liberal thought among reporters and editorial writers, cuts in experience reporters brought about by ownership to survive in a dying industry, and the dying industry reducing competition among newspapers. Just look at here in Baltimore, where the Sun is the only major dead-tree newspaper. While the market is ably served by online based writers such as Bryan Sears with Patch and the gang over at MarylandReporter.com, there is just NO competition for the eyeballs of newspaper readers.
And that's what reporters fear. They fear that the Koch Brothers would destroy the paradigm.
The Koch's, if they are successful in their takeover of the Tribune Newspapers would bring about a fundamental sea change in the way that those eight newspapers are run. Obviously, there would be a night and day difference in the editorial bias of the opinion pages of their papers, but I also have a feeling that the Koch's impact on the paper would flow down to the newsroom as well. I'm not saying that a conservative tilt would overtake the newspaper overnight or at all. But I do have a hunch that the basic reporting done by many reporters, what I did refer to as "laziness" earlier in this story would be replaced by a much more competitive, market driven system where reporters who are willing to dig, willing to work, and willing to hustle are rewarded moreso than just advancing up the food chain based on seniority. The introduction of a more capitalistic newsroom from the perspective not of the bottom line but the idea of competition among peers would reinvigorate those newsrooms and provide the spark for better, more in-depth journalism.
And speaking as a Baltimore Sun reader, we could certainly use that. There are several fine reporters for the Sun, and I do enjoy their sports section tremendously. But the Maryland section could always use additional backup. And that's a good thing. The Sun far too often has reported stories in a manner that were not always particularly critical of Democratic administrations, and we all remember the running feud the paper and its reporters had with the Ehrlich Administration ten years ago. More in depth reporting on issues and news stories coming out of City Hall and the State House would be a tremendous improvement to our state as a bulwark against the Democratic machine, and would provide a real check and balanced against unmitigated Democratic hegemony. A more robust, reality-based editorial page would actually understand economics and understand the impact of government on taxpayers as opposed to producing poorly thought out strawman arguments in support of the Democratic regime. 
For Marylanders, Koch ownership of the Baltimore Sun would be a boon to our state.
I can understand the feeling of long-time reporters, those who have grown up with this being the only way it is. I can understand their fear and loathing of the Koch Brothers; loathing their conservative ideas while fearing the different ways that they may shakeup the newspaper industry. But I can see nothing but positives coming from such a takeover. It isn't because of the politics of the Kochs, which obviously are more in line with mine. But the idea that ownership that understands capitalism may take over the ownership of several big city newspapers is a boon to free-thinking, a boon to good reporting, and an asset to those who wish to continue to bring sunshine to our government.

More below the fold.

Wednesday, April 24, 2013

The Sun's strawman Argument on the Internet Tax

Earlier Mark discussed the shuffle on Martin O'Malley's Internet Sales Tax-Gas Tax scheme, in which the gas tax will go up in 2016 if and only if Congress authorizes the taxation of internet sales. As Mark notes, the impact of the internet tax on the taxpayer won't be to reduce taxes, but just to play games with where the taxes are going to come from.

This morning the Sun editorial board put out an interesting piece, in which a new strawman in the argument of the internet tax vs gas tax argument was used:
Maryland has a significant stake in this decision, partly because it was wrapped up in the General Assembly's recently approved gas tax legislation. The state's estimated $173 million annual take from taxing Internet sales is set aside for upgrading roads, public transit and other transportation projects. Should Washington fail to take action, the gas tax will take its place — with an expected 7-cent increase in 2016. 
But while paying 7 cents less per gallon at the pump in a few years may sound attractive, that's not the real reason Maryland residents should support the Senate proposal. What should get their dander up is how local taxpayers are essentially subsidizing companies that have no presence whatsoever in the state. 
Under a 1992 Supreme Court ruling, states can't force a retailer to collect a sales tax unless it has a physical presence in the state. So, weirdly enough, that gives Internet companies an incentive not to locate a store or warehouse in Maryland whenever possible. 
In other words, the current sales tax system not only hurts those retailers who actually set up shop inside Maryland's borders by making their goods 6 percent more expensive, but it actively discourages Internet companies from coming here. If that doesn't sound like something out of the "Madness of King George," we don't know what does.
Naturally, there are arguments here which one could drive a tractor-trailer through:
  • The Transportation set-aside: The internet tax is, ostensibly, a replacement for the 7-cent gas tax hike. The 7-cent gas tax hike, ostensibly, is set-aside for transportation funding. Of course, the argument can only work if you trust the General Assembly to 1) keep the money as a set-aside for transportation projects and 2) to not continuously raid the Transportation Trust Fund as they have done to the tune of $868 million over the last four years.
  • The Subsidization Argument: To quote the Sun, they say that "local taxpayers are essential subsidizing companies that have no presence whatsoever in the state." That argument, of course, is beyond ridiculous. A consumer who buys a product over the internet is not "subsidizing" a company. They are exchanging cash for goods. The funny thing is that most of the people who order goods off of the internet are doing it not out of the sake of avoiding the tax, but more often than not in an effort to get a specific product from a place that has a wider selection. The average consumer does not take sales tax into account, nor do average consumers actively take this savings into account. If the Sun editorial board wants to take on what it actually means to sub, they are more than welcome to review our posts on Martin O'Malley's offshore wind handouts subsidies.
  • The Internet Business Argument: Again to quote the Sun, they say that the current system hurts retailers who set up shop within Maryland's borders. Is the Sun editorial board so naive as to think that this federal ban on internet taxation somehow disproportionately dissuades businesses from moving to Maryland mores than it dissuades a business from moving to any other state? Under their logic, a business that is located in New York (with a 9% sales tax) should move to a state like Maryland (with a 6% sales tax) because they would only have a 6% markup on Maryland's smaller customer base while realizing a 9% reduction in the cost of their goods to New York residents with a larger customer base. The Sun's logic here is totally asinine. We all know that if there is any reason that internet companies are discouraged from moving to Maryland it's the year after year after year where the Democrats work to increase the cost of doing business, increase taxes, increase wasteful spending, and decrease the ability of businesses to compete in the national and global marketplace.
The Sun's editorial board does at the very least stop to take into account one glaring cost of internet taxes that are sure to create additional costs on businesses that will be passed on to (guess who!) the consumer:
Now, we will grant that this obligation carries some burden for those companies that sell online. There are tremendous variations in the sales tax — in what items are taxed and how much — that not only differ among states but often by county, city or town.
How bad is it? Let me tell you the number The Heritage Foundation came up with:

The cost of the calculations of selling goods in 9,646? That will be passed onto you.

The Sun, as it often does, totally misses the point on the tax increases, both the gas tax increase and the internet tax proposal. The Editorial Board, from their perch on Calvert Street, doesn't really understand what it is like to be in the middle and working classes in Maryland these days. Much like the Maryland Democratic Party, they are perfectly intent to go in lockstep with whatever cockamamie, insane tax ideas come down the pike regardless of their consequences on the consumer or on business. Until Maryland gets into the habit of cutting spending and reducing taxes, where the tax comes from is of little consequence  the people who live, work, and shop in Maryland will continue to suffer the impact of the lack of foresight and leadership shown by state leaders....

More below the fold.

The Internet Sales Tax Shuffle

The U.S. Senate is considering a law taxing Internet sales. If passed, it may alleviate some pain at the pump from Governor Martin O’Malley’s gas tax hike, but we would feel a sting at the mouse click.  The Marketplace Fairness Act, would allow states to collect sales tax on Internet purchases.

If the measure is signed into law, the Maryland law would halt the phase-in of a wholesale tax on gasoline at 3 percent, and apply revenue collected from taxing Internet purchases for transportation spending.  In addition to indexing the per-gallon excise tax to inflation, O’Malley’s Transportation Funding Act of 2013 contains a 5 percent sales tax (phased in over three years) levied at the wholesale level.

 This scenario would not lower Marylanders’ tax burden--gas prices would still rise approximately 20 percent.  Rather it would merely open a new entrance for government spelunkers enter our wallets.

 If O’Malley wanted to use sales tax revenue to augment transportation funding, he already has a significant amount of funding from that source.  According to state revenue figures compiled by the non-partisan, grassroots group Change Maryland, the state takes in $613 million annually from O’Malley’s 20 percent state sales tax increase passed during the 2007 special session.

 It also bears repeating that given past behavior, there is no guarantee for Maryland motorists that the extra revenue from the gas tax or Internet sales tax will go to road maintenance or traffic congestion relief.  Governor O’Malley and the overwhelming majority of legislators who voted for the gas tax hike, also voted to raid $868 million in Highway User Funds from the Transportation Trust Fund.  Those funds, used to cover increased spending on other programs, have not been repaid. 

More below the fold.

Monday, April 22, 2013

Comptroller Peter Franchot's Reckless Call for Towson University's President to Resign

Published in today's Towerlight, the Towson University newspaper
For those interested in a truly compelling, substantive point-by-point rebuttal to Comptroller Peter Franchot's empty case against Towson University's president, see Chancellor Brit Kirwan's letter in The Daily Record (April 11, 2013)

Faculty member to Franchot: "apologize"
--Richard E. Vatz

      Comptroller Peter Franchot, a previously outspoken but not reckless political figure in Maryland, has relinquished that persona in his statement that Towson's president, Maravene Loeschke, "should resign."

     Before citing some of the more strikingly irresponsible elements of his recommendation, it should be stipulated that over six months ago this writer sent arguments to the excellent Head Baseball Coach Mike Gottlieb to use to help keep the team and has made a small contribution specifically to the baseball team. 

     Comptroller Franchot writes lengthily regarding his incredulity that President Loeschke didn't testify before the Board of Public Works.  He does not even mention that Gov. Martin O'Malley, strongly supported by the third Board member, Maryland State Treasurer Nancy K. Kopp, stated that the situation would be "better handled by the Board of Regents than at the Board of Public Works."

    When calling for a president's resignation, a responsible principal doesn't leave out material facts.

    Comptroller Franchot argues that Towson is divided, implying that the president has been the source of such division.  Divided? Let's look at the breadth of support for her:  Chancellor Brit Kirwan referenced President Loeschke’s being honored as one of “Maryland’s top 100 Women” and added, ”all of us want you to know how much we support you…;” the Board of Regents supported TU's president and loudly applauded her; the University Senate, the main legislative body of the university, issued a resounding Sense of the Senate statement supporting the president (“[The president made the decisions] with procedural integrity and consistent with the excellent leadership values that she has exemplified throughout her stellar presidency.”); and the Student Government’s president and leadership have comparably supported her, including issuing a flyer specifically countering Comptroller Franchot, and I am further told by senior officers that even the few who thought her decision was incorrect support the president personally.  Senator Jim Brochin (District 42) called the Comptroller’s statement “totally inappropriate” and has praised President Loeschke’s leadership to me personally more times than I can recount.

    The Comptroller appears to have selective outrage.  When University of Maryland's Wallace Loh eliminated over a half-dozen sports, a decision met with hundreds of irate e-mails and thousands of dissenters on e-mail petitions, the Comptroller did not call for his resignation.  Is there a gender-based differential in Comptroller outrage?  Perhaps not, but what else accounts for the different reaction?

    People may disagree with the painstaking decision process of the president of Towson, but to question the integrity of the most honest, decent and student-centered president Towson University has had in the 39 years of this writer's tenure is nothing short of ethically contemptible.

     All university decisions can be questioned, even by a public figure who is not known for over-attention to individual university sports programs.

    But, again, to transform a policy disagreement into an attack on the character of a university president whose integrity and honor is beyond reproach is unforgivable.

    Comptroller Franchot owes Towson University and President Loeschke an apology.


Richard E. Vatz, Ph.D.
12-term member of Towson’s University Senate


More below the fold.

O'Malley Maxing Out State Credit Card

Since 2010 Governor O’Malley and the General Assembly have put $1.2 billion on the public credit card in order to replace funds, raided from special dedicated accounts, to cover general fund spending increases.


A major component of the operating budget in the most recent budgets includes the use of general obligation (GO) bond funds as replacement for special fund revenues transferred from various capital accounts to the general fund. In addition GO bonds have been used to replace capital pay-as-you-go (PAYGO) funds resulting in the shift of certain PAYGO funded grant and loan programs to the bond program.

Despite his claims of billions in budget cuts, total state spending under O’Malley has increased over 25 percent.  Maryland’s total debt according to State Budget Solutions is $82 billion.

The table shows that GO bond replacement represented 35 percent of all GO bond authorizations in FY 2011. 

Maryland’s debt service is paid for out of property tax revenue.  Those revenues have not kept up with the pace of the state’s debt.  O’Malley did set aside $108 million to help cover property tax shortfall.  However, a property tax hike—as much as 56 percent--may be needed to meet state debt service obligations. 

More below the fold.

Sunday, April 21, 2013

Red Maryland Radio Special Edition: 4/21/2013

It was a very special  post-convention edition of Red Maryland Radio this evening with Greg Kline and I.

On tonight's show we will discuss in depth the Maryland Republican Party convention, the election for Chairman, and what the future of the Maryland Republican Party holds. People were thanked. People were called out. Names were named.

Listen to internet radio with redmaryland on Blog Talk Radio

Topics included:

  • How Greg decided to run for Chairman;
  • Greg's visits to Central Committees, and some of the games the members played;
  • The negative attacks against Greg and his campaign by Diana Waterman's surrogates;
  • Ann Suchoski's personal questions about Greg's family at the Four County meeting  in Salisbury;
  • Another battle between me and John Wafer;
  • Greg's decision to not drop out after the second ballot (Hint: Collins Bailey told Greg to stay in the race).
It could be best described as: catharsis

This is why you can't afford to miss Red Maryland Radio in our regular slot,Thursday nights at 8, on the Red Maryland Network.......and don't forget that you can subscribe to the Red Maryland Network on iTunes.

More below the fold.