Delegate Warren Miller Throws the Hammer down on Governor O’Malley of Maryland – The Governor’s scheme to hurt Maryland Business


Friends of Warren Miller Newsletter

Update from the Maryland General Assembly
February 1, 2010

Newsletter #1

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in this issue
The Budget
Unemployment Insurance

Dear Constituent,

It is again my great pleasure to be your “common sense” conservative voice in Annapolis. I have been re-invigorated by the concern residents of Howard County have with the direction of our County and State.  We cannot continue to rely on massive increases in the size of Government and the nanny state mentality of the liberals running Annapolis.  This will be my first newsletter regarding the 2010 General Assembly session. I hope you find it insightful and that it will be something you can rely on when you debate issues I will cover with citizens who may not be paying attention to what the State is doing, like you are!  Please feel free to forward to your friends and as always do not hesitate to contact me with your concerns or comments.

Thanks,

Warren Miller

The Sorry State of Our State Budget

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I wanted to give you a little history primer regarding the Maryland State Budget for my newsletter readers.  As you may recall from past initiatives I have been a very vocal critic of our spiraling, out of control State Budget.  First a trivia question? When was Maryland’s first Billion Dollar Budget? (Answer later, you’ll have to read it all to find out…..)

Despite huge budget deficits over the past 3 fiscal years, the Maryland State budget was increased each year under Governor Martin O’Malley, even though to read the press releases this Governor has cut “Billions” out of Maryland’s Budget, problem is numbers don’t lie!

A review of budget data indicates the following increases:
FY 2008 – The overall state budget increased  over the previous budget to a total of $29.6 Billion in spite of starting the year with $400 Million of over-spending (i.e. deficit).  To close that gap and provide for the increased spending, $1 Billion was withdrawn from the state’s rainy day fund.

FY 2009 – The overall state budget increased over the previous budget to a total of $30.9 Billion in spite of starting the year with a $700 Million of overspending (deficit).  To close that gap and provide for the increased spending, the state sales tax was increased by 20% and the corporate income tax rate was increased from 7.0% to 8.5%.  Other tax increases were also enacted to attempt to raise over $1.3 Billion in additional revenue, representing the largest tax increase in the state’s history.

FY2010 – The overall state budget increased 4.7% over the previous budget to a total of $32.3 Billion in spite of starting the year with $2 Billion in overspending (deficit).  To close that gap and provide for the increased spending, stimulus money from the Federal Government (which was initially borrowed from China) totaling over $3 Billion was used.

In spite of this increased spending, increased sales and other tax rates, depletion of the state rainy day fund and use of stimulus funds meant to create jobs and lower debt, the State of Maryland’s unemployment rate doubled to 6.2%, the highest figure in the past 16 years, and the yearly budget deficit gaps continued to trend upwards at ever-higher rates.

The lesson here is simple, with a failing economy we need to stop wasting your money and do the right thing, our State and Federal Government can’t fix the loss of private sector jobs by continuing to grow the size of government. The answer to my opening question is 1968!!!

The Governor’s scheme to hurt Maryland Business!~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

In an effort to stabilize the Maryland State Unemployment Insurance Trust Fund, Governor O’Malley and his Democrat colleagues in the legislature have introduced SB107/HR91 (Labor and Employment-Unemployment Insurance Modernization and Tax Relief Act), for our vote.  This bill expands eligibility (LIBERALIZES Eligibility) for unemployment insurance, makes changes to part-time workers provisions, and provides for up to 26 weeks of additional training benefits as a condition of receiving a one-time $126.8 million grant in federal stimulus funds (The Carrot).

That certainly sounds fair and friendly, but a closer review of the bill’s details reveals that this bill is not a good deal for Maryland’s employers and business community. Because of this recession, Maryland is on track to pay out over $1 billion in unemployment benefits this year and probably beyond that as well.  At that rate, the 126.8 million pledged by the federal government would last less than 5 1/2 weeks.  In exchange for those funds, the federal government would require automation and other program updates to be made that would cost the State of Maryland approximately $20 million each year permanently.  Clearly incurring annual long term liabilities of an estimated $20 million so the state fund can pay out 8 weeks of benefits far overshadows the short term benefit of the federal stimulus.

Unfortunately, this provision also liberalizes the system (The Stick) by making more individuals eligible who do not have sufficient attachment to the workforce to be eligible under Maryland’s present system.  It is employers, not the state government or other taxpayers, that bear the burden and consequences of maintaining a solvent Trust Fund, and expanding it to include others not presently covered will certainly result in fewer jobs and potentially fewer businesses to pick up the increased costs. We have no way of knowing what this liability could be, but it will greatly increase the drain on the employer funded Unemployment Insurance fund.
I believe that the antidote to unemployment benefits is jobs and creating a business friendly environment where businesses can flourish, thereby increasing the need for more workers.  To achieve this goal we need to get the Federal and State Government off of our business people’s backs.  Years of bad legislation and taxation in Maryland have done permanent harm to our economy.  In Howard County alone the Unemployment rate has doubled! Driving up the costs of businesses to employ workers is not good public policy during this recession.

The short term $126.8 million federal stimulus payment cannot mask the fact that it is simply not sustainable to liberalize eligibility without making offsetting long term savings.  Now is not the time to add long term liabilities that increase employer’s costs, threaten trust fund solvency and hurt job creation.  In addition, counting on continued federal monies for the purpose of shoring up unemployment benefits is plainly naïve and should be resisted when they obligate employers to permanent additional costs.

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One response to this post.

  1. Posted by jack on February 1, 2010 at 6:20 PM

    i will forward Miller’s newsletter. Amazing how they speaking up on the downfalls of this administration. I love it. Its about time we getting good honest citizens in government.

    Reply

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