Meanwhile, across the river, Maryland’s liberal governor, Martin O’Malley (D), is talking about closing a yawning budget deficit by cutting spending on education and on public employees’ pensions and retirement benefits. For now, at least, he’s proposing only to slash expenditures and not to raise taxes.
Again, it’s smart politics and, maybe, smart policy. (I’m not sure about the school cuts.) And it’s certainly surprising, given that education has been one of O’Malley’s most-prized priorities and that public-sector employees unions are among the Democrats’ most reliable allies.
The governors’ counterintuitive approaches illustrate two realities, one economic and the other political.
The economic reality is that Virginia, unlike most states, is enjoying a budget surplus ($403 million). That means McDonnell has public dollars to invest in projects that will help the state in the long term.
By contrast, Maryland — though not nearly as bad off as California or Illinois — has to close a gap of $1.3 billion. Maryland’s finances are under more pressure than those of its neighbor partly because its economy did a bit worse in the recession. Also, Maryland has been more generous than Virginia to such beneficiaries as state employees and public colleges and universities.
“Because of the philosophical differences over the years over what the states should fund, Virginia didn’t get out as far in front as Maryland in their public spending,” said Steve Fuller, director of the Center for Regional Analysis at George Mason University. “As a result, as the economy soured three years ago and revenue started falling, Virginia didn’t get in as much trouble.”
The political reality is that both governors see an advantage in not conforming to expectations. McDonnell seems likely to put Virginia Democrats on the defensive by daring them to vote against new money for transportation. O’Malley, just beginning his second four-year term and barred from running for reelection, can demonstrate that he’s a politician willing to make tough, unpopular choices.
“Democrats have had to prove to voters that they care about austerity. Republicans had to prove that they had a plan to move forward in the future,” said Bob Holsworth, a former government professor at Virginia Commonwealth University.
McDonnell’s plan is particularly revealing, because it shows that he’s willing to risk alienating parts of the GOP whose ideology is offended by government spending. He wants to sell $2.9 billion of bonds over the next three years, partly by accelerating borrowing that’s been authorized. Some of the money would pay for road improvements in our region, including widening Interstate 66 outside the Capital Beltway and upgrading intersections around Fort Belvoir.
“Unlike many of the grass-roots activists on the right, McDonnell does not reject the big-government, activist model of leadership,” said Mark Rozell, a public policy professor at George Mason.
Admittedly, McDonnell doesn’t have much choice if he wants to fulfill his 2009 campaign pledge to find money for roads and mass transit without raising taxes. Many of his other ideas for raising such funds are stalled or dead.
For instance, McDonnell has failed to get the General Assembly to approve his plan to sell off state liquor stores. He also can’t count on royalties from oil and gas drilling off Hampton Roads because the Obama administration blocked East Coast exploration after the Gulf of Mexico oil spill.
In Maryland, O’Malley hasn’t spelled out his proposals in detail. But he’s said he’ll ask teachers, police officers and other state employees to make “greater contributions” to their retirement plans to help overcome a massive underfunding of the state pension system. The governor also said it was “probably impossible” to avoid cutting state funds for K-12 education.
However, there are grounds to suspect that O’Malley could shift his position and support raising taxes — as long as the General Assembly makes the first move to do so. Although he promised that his initial budget proposal Jan. 21 won’t include a tax increase, O’Malley on Tuesday urged legislators to keep “an open mind” about options.
Sen. Richard Madaleno (D-Montgomery), a member of the Budget and Taxation Committee, predicted increases in both the gasoline and alcoholic beverage taxes. That would be a sign that the political climate in Maryland was reverting to normal.
On Sunday, Five Ponds Press of Weston, Conn., informed the Virginia Board of Education that it would bear the full cost of replacing thousands of copies of its error-strewn fourth-grade Virginia history textbook with (hopefully) accurate editions. The publisher sent the e-mail on the very day that my column appeared urging the company to give the state a full refund for the bum books.
I discuss local issues at 8:51 a.m. Friday on WAMU (88.5 FM).