Category Archives: 2014 Governor’s Race

Fiscal Fantasy

 The Second Gubernatorial Debate

Republican Gubernatorial Candidate Larry Hogan has an opening with genuine discontent about taxes. He has certainly pressed it home virtually to the exclusion of all other issues.

Tax Cuts for You, Tax Cuts for Me

Hogan has put out the idea of a panoply of tax cuts. At a forum in a Baltimore populated by retirees, his idea of eliminating all taxes on retirement income was unsurprisingly popular among this demographic that votes at very high rates.

He also wants to lower taxes on corporations as part of an effort to improve the State’s business climate along with cutting back income taxes more broadly. Since he repeatedly talks about repealing all tax increases that occurred over the past eight years, that means that the gas tax and the Chesapeake Bay Restoration Fee (a.k.a. the “flush” tax) should also go.

But Before We Even Get to Tax Cuts

However, before engaging in any new tax cuts or spending, the next governor will have to deal with a major revenue shortfall. Tax revenues are often hard to predict. While the federal deficit has declined rapidly, Maryland will need to close a gap of $405 million in order to balance its budget.

Illusory Plan to Pay for Them

Hogan promises we can have it all by cutting “$1.75 billion in waste and abuse that we have identified.” Cutting waste, fraud, and abuse has a long history as the savior of politicians who want to cut taxes or increase spending without making tough choices. Just recall the Grace Commission report 30 years ago.

Hogan has now dusted off this strategy. Except that his figure is woefully inaccurate–inflated by a minimum of $843 million— as a review of just a portion of Hogan’s claims by the Baltimore Sun revealed. Sloppy math, such as a misplaced decimal point, undermines the Hogan meme that as “just a small businessman” who will watch our pennies carefully.

Even more embarrassing is that another error to the tune of $285 million relied on collecting more in property taxes–not exactly the theme of his campaign–but also on the assumption of tax rates of 100%. My guess is that not what they were going for when they unveiled their plan.

Hogan’s campaign concedes that the Sun‘s report is correct, as  Campaign Spokesman Adam Dubitsky creditably acknowledged. (Smart: admit the mistake, move on, and pivot back to the campaign’s core message.)

And the Costs are Unknown

Hogan doesn’t know the cost of all of the various tax cuts that he has proposed. However, the Washington Post reported that a nonpartisan analysis revealed that the cut in retirement taxes alone would cost the State over $1 billion in revenue.

Incredibly, despite the welter of promises, Hogan simply hasn’t looked into it. As Dubitsky explained to the Post, “It’s not going to be until we dive into the budget after we win the election.” An amazing admission about the leader of Change Maryland who just said in a debate “I don’t want to over promise and under deliver.”

Since Hogan promises so much but there is little on the table in the way of real cuts, I worry that they may fall on the state’s universities–not just in terms of tuition but also in other funding that has been vital to its steady positive trajectory. And my view is that any pro-business economic strategy has to rely both on continuing that movement and taking better advantage of it.

Hogan 2.0?

Speaking with Dubitsky and listening to Hogan in the debate, one also perceives a more reasonable version of Hogan. Dubitsky told me that Hogan is committed to maintaining the State’s AAA bond rating and getting the fiscal house in order before moving forward with tax cuts. Makes sense to me.

Certainly, working to make Maryland more attractive to business is  a perfectly reasonable goal, as is the idea of restructuring state government to improve efficiency and focus it on future challenges. But so far, all Marylanders have received is theme and message without an iota of content.

Avoiding specifics may well be the way to go in a campaign–too many Democrats get bogged down in the specifics of plans. Anyone remember the endless and pointless 2008 debates between Obama and Clinton about who had the better health care plan?

Even just the outlines of an approach and concrete examples backed up by facts would put meat on the bones and provide badly needed credibility. Even more welcome would be if Hogan would stick to not over promising by ceasing to hand out impossible tax cuts like lollipops on the campaign trail.


Brown Expands Lead in CBS/NYT/YouGov Poll

CBS/NYT/YouGov has good news for Lt. Gov. Anthony Brown. According to their poll, Brown leads Larry Hogan by 55-38 among likely voters, including leaners.

Inside the Survey

This poll, conducted September 20-October 1, reveals nice improvement for Brown. Their previous survey in the field from August 18-September 2 had Brown ahead by 51-37 among likely voters. So Brown is up 4 points and further above 50%, while Hogan is up only 1 point and still below 40%.

According to this survey, Brown’s improvement is due entirely to increased support among white voters. While Brown remains at 80% among black voters, he has increased his white support from 37% to 42%. And he still has room to grow among African-American voters.

The gender gap remains cavernous in the recent survey with Brown up 65-27 among women and Hogan up 52-44 among men. While Hogan needs stronger numbers in both groups, the poll indicates that he must make major improvement among women in order to be competitive on Election Day.

The breakdown by party identification reveals the strength of the Democrats. Brown is down 7-93 among Republicans and 37-52 among Independents. But it just doesn’t matter because he is up 86-6 among his fellow Democrats who compose one-half of likely voters according to the survey.

Reading the Tea Leaves

The key question raised by the survey is why did the Lieutenant Governor promise not to raise taxes in the recent debate. Even if it is the top issue for voters, a candidate leading 55-38 doesn’t need to bind his own hands.

Internal polling for the Brown campaign may show a much smaller lead over Hogan–even smaller than the 9 point lead in the recent Washington Post poll. While some Democrats exude confidence, there are also significant rumblings of concern around the State.

Alternatively, it may suggest that a Brown-Ulman Administration would veer away from the course charted by the O’Malley-Brown Administration in terms of tax and economic policy. A surprise to those who see Gov. Brown merely as O’Malley 2.0. Taking taxes off the table forces Brown either to curtail his progressive agenda or restructure State government to accomplish it.


Gubernatorial Debate

I live tweeted it @theseventhstate. I’ll leave you to decide who won but here are some quick thoughts.

Gutsy Moments: Doug Gansler sticking up for a corporate tax cut in a Democratic debate; Heather Mizeur calling for full marijuana legalization. As the front runner, Anthony Brown played it safe.

Anthony Brown Strengths: Looked comfortable and gubernatorial. Linked himself to Gov. O’Malley successes on issues from marriage equality to raising the minimum wage. No mistakes that should cause him trouble in the future.

Heather Mizeur Strengths: Good on specifics but not too bogged down in details–a tough balance. She deftly took advantage of Gansler/Brown attacks on each other to look like a leader and the  adult in the room.

Doug Gansler Strengths: Very convincing on the economy–came across as the practical progressive who has a real plan for the State to move forward. Turned around reprimand attack by Brown in a devastating way. Made it look sleazy.


Thoughts on the Gansler-Ivey Poll

The Gansler-Ivey poll results are catnip for people like me who follow campaigns but also a good example of why outlets that try to estimate the current shape of election campaigns (e.g. 538, do not include them in their analyses.

The press release includes some interesting numbers. I was less interested in the top lines than in the report of Doug Gansler’s favorability ratings. If opinions of the AG have indeed improved since the spate of very bad press earlier this year, that would certainly be good news for the Gansler-Ivey campaign.

However, the press release was more telling for what it did not include than what it did. There is no information about the questions that were asked. One poster on Seventh State’s Facebook page claims that the questions were primed to elicit negative responses about Lt. Gov. Anthony Brown.

(Update: The Gansler campaign informs me this was not the case and that the questions about candidate ratings and horse race numbers were asked prior to the questions regarding the exchanges in any case.)

While the poll reported Gansler’s favorability ratings, it did not do the same for either Brown or Mizeur. Additionally, there are no demographic breakdowns. I’d be especially interested to know the gender, racial, and religious composition of the survey, as well as the results for these demographic groups.

This information would make it possible to answer several questions. For example, does the share of women estimated in the electorate correspond to past gubernatorial elections? Women routinely makeup a disproportionate share of Democratic primary voters in Maryland but do they in the polling sample? How strong does the poll state support is for candidates among groups whose support they might hope to consolidate?

So, while fun to read, I’ll be looking forward to the next poll reported by an outlet not associated with one of the campaigns.

Note: I’m supporting Gansler but I try to call it like I see it as is evident here.


Gansler-Ivey Release Poll

I’ll try to provide more analysis later but thought I would just share the document now. It shows Brown with a 31% lead with 22% for Gansler, 8% for Mizeur, and a whopping 40% undecided–less than reported in past polls for the Post and the Sun.

The release from the campaign also highlights that Brown has a 37% positive-47% negative rating on handling the health care exchange. It also says that Gansler’s favorability ratings have increased 10 points from previous media polls to a net 46% favorable and 16% unfavorable.

Gubernatorial Poll from Gansler-Ivey Campaign


Health Care Exchange Tech Scrapped

The opening paragraph from this WaPo story is terrible news for the Brown campaign:

Maryland officials are set to replace the state’s online health-insurance exchange with technology from Connecticut’s insurance marketplace, according to two people familiar with the decision, an acknowledgment that a system that has cost at least $125.5 million is broken beyond repair.

That’s a lot of money down the drain on an initiative on which Lt. Gov. Brown had hoped to tout his leadership. Indeed, his placement at the head of the roll out seemed designed with that purpose.

The key question remains whether either AG Gansler or Del. Mizeur can capitalize on it. How do they attack Brown’s management skills without conflating it with a general attack on the President’s signature achievement?

Finding the way to craft a message successfully to pick that lock could well be the key to shifting voters in the fight for Democratic nomination. A further complication is how to make the attack without shifting voters to your other opponent.

If Brown wins the nomination, I expect that this issue will continue to feature in the general election. For a Republican, it’s a great way to rally the base and to attack Brown’s skills. In any case, he needs to get this problem fixed quickly so he can put it behind him.