Financial Sway of Md. Panel A Rarity
Few States Provide So Much Power

By Aaron C. Davis
Washington Post Staff Writer
Wednesday, August 26, 2009

Hundreds of bureaucrats, lobbyists and journalists will squeeze into Gov. Martin O'Malley's stately reception room this morning in Annapolis, as they do on many Wednesdays. They'll stand shoulder to shoulder for hours, like subjects in a king's court, fidgeting and shifting their weight on a blue-and-coral Persian rug to watch a political spectacle unlike that of any other state.

Seated under a mural of the first Lord Baltimore, a powerful troika of the state's ruling Democratic Party is expected to close a nearly half-billion dollar budget gap with furloughs that will send tens of thousands of state employees home for as many as 10 days without pay; halt paving and other road projects in almost every corner of the state; and clamp down on health-care programs in ways, advocates say, that will push many of Maryland's neediest to the brink.

The weighty decisions will be made by Maryland's Board of Public Works, a generically named three-person panel that toils mostly in obscurity, approving a seemingly endless number of state contracts during good times, but whose power is felt intensely by millions of residents when difficult decisions need to be made.

The board -- made up of O'Malley and two fellow Democrats whom many Marylanders might be hard-pressed to name, Comptroller Peter Franchot and Treasurer Nancy K. Kopp -- is a one-of-a-kind setup, according to political analysts and historians. In most places, state legislators must approve budget cuts, and a handful of governors have the power to strike funding line by line. But the board is the only state entity with constitutional authority to cut as much as 25 percent of funding for almost any state program or agency, according to the National Conference of State Legislatures.

The board's power cuts both ways. Its ability to quickly bring state spending back in line when revenues drop has been cited by Wall Street analysts as a factor in the state's ability to maintain a AAA bond rating and borrow at record low rates in recent months. The board's responsibility to approve contracts also means deals that might otherwise be negotiated behind closed doors by the administration always get reviewed by at least the comptroller and treasurer. Yet, the scant requirements that the board provide notice of its plans or provide time for public comment mean that few get to weigh in on the most devastating budget cuts before they're approved.

"There certainly is a tension that exists between the flexibility and agility of the board to meet fiscal needs quickly, and on the other hand, the benefits of legislative examination and debate," Kopp said in an interview. "We try to include the legislature, but it's not the same thing as having them come back into session and meet."

For all of the pomp of board meetings, by the time the participants get together they usually know the outcome. As is the case most Wednesdays, even when the board meets to take up more mundane decisions, its final tally is often less a measure of its members' opinions than the culmination of days or weeks of behind-the-scenes negotiations among the governor's office, other board members and possibly leaders of the General Assembly -- all Democrats.

Aides to board members said Tuesday that the vote endorsing O'Malley's budget cuts is almost a foregone conclusion. Offering a sketch of the $454 million package he'll ask the board to approve, the governor noted in a news conference that the total is less than the $470 million in total cuts his budget office had sought.

"There is a burden of getting to a majority vote," O'Malley said. Among the items that dropped out of the package in recent days were millions in "disparity grants" that help Prince George's County, Baltimore and other areas where local governments have trouble raising tax revenue. Lawmakers from those jurisdictions had opposed cuts to those grants.

"I always have to get one vote," O'Malley said last week in an interview, declining to say whether and what he might have to cut to reach consensus on the package.

Kopp, a member of the House of Delegates for 27 years, said she stays in constant contact with legislative leaders to make sure they are informed about the board's coming actions on O'Malley's requests. She said the fiscal health of the state shows the board has acted responsibly. Before Wednesday's cuts, the board had approved six major rounds of spending reductions, totaling more than $1 billion, since 2007.

During the last recession that forced major budget cuts, in the early 1990s, the board was sued by advocates for the disabled and others with special needs who said it had no constitutional authority act as judge, jury and executioner of budget cuts.

Courts ruled that it did and in effect strengthened the board's power. But Kopp said she has to live with a skeptic: her husband, a constitutional lawyer for the Justice Department. She said he regularly jokes that she's going to her "unconstitutional" meeting, one with power that wouldn't be allowed under federal separation of powers.

Her defense: "It's not federal; it's Maryland."

When Franchot campaigned for comptroller, he called the board undemocratic because it has no requirement for hearings, testimony or time for the public to debate cuts before the board takes action. "There's just nothing. The governor brings it up. If he has [a vote] it goes through," Franchot, who at times has had a confrontational relationship with O'Malley on the board, said in an interview.

"I campaigned saying I didn't think the board should be acting like a mini-legislature without any due process," Franchot said. But he said his view has changed since he started serving on the board.

"I've realized the efficacy of it," he said. "Despite being lacking in protections, it's an extremely effective fiscal tool . . . we're essentially allowed to act like a guillotine on state spending at any point in real time."

Franchot said he ran into California Gov. Arnold Schwarzenegger (R) at a social gathering this year. When he told the governor about the board, Schwarzenegger grew increasingly animated, saying, "That's what I need." California faced a $25 billion budget deficit this year, and a partisan debate to close the gap stretched on for months, affecting the state's fiscal rating.

Roy Meyers, professor of political science and director of the Public Affairs Scholars Program at the University of Maryland Baltimore County, said the construct of the board is often difficult for residents to understand.

"Board of Public Works -- it's kind of a strange name, a legacy of the progressive era when public works were infused with corrupt activities. The whole idea was to create a board that would not have that flaw," Meyers said. "Yet the state has not done a good job in terms of education about the nature of spending, and so the typical person cannot, when it hears about the 'Board of Public Works,' really understand what's going on."

Staff writer John Wagner and staff researcher Meg Smith contributed to this report.

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