Josh Kurtz -- Around the Horn: No (Tax) Break for O’Malley, and Key Developments in Legislative Races

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By: Josh Kurtz 

As he becomes more overt about his plans for 2016, Gov. Martin O’Malley (D) can look back at his record – in the State House and at Baltimore City Hall – and see plenty that will appeal to liberal Democrats in key early presidential nominating states like Iowa, New Hampshire and Nevada.

And for most of his time as governor, O’Malley has had cooperative – critics would say pliant – legislative leaders, who have helped him pass his progressive agenda and have occasionally helped him shape it.

But now, in O’Malley’s last year as governor, Senate President Mike Miller (D) and House Speaker Mike Busch (D) have thrown him a potential curve. They want to lower the state’s estate tax by raising the amount of money that is exempt from the tax.

The argument for doing so is simple enough: Maryland has one of the highest estate taxes in the country, and some wealthy people are leaving for states where the tax is cheaper or nonexistent. The measure Busch and Miller are backing is designed to gradually put the state on a par with federal estate tax levels. Because they are all-powerful in their respective chambers, it is hard to imagine the bill not passing.

What will O’Malley do then? The meme in national Democratic politics these days is economic justice and closing income disparity (or, as we said back in the day, soaking the rich). That’s the prime motivator behind the various bills to raise the state’s minimum wage – a push O’Malley supports.

So does O’Malley, looking past Annapolis, with an eye on liberal party activists and thought leaders, organized labor, and the big white house on Pennsylvania Avenue, really want to sign a bill designed to benefit…millionaires?

If he tries to argue against the bill on the merits, he may have an unlikely ally. Warren Deschenaux, the legislature’s budget guru – who reports to Miller and Busch – isn’t a fan of the idea. He told the Baltimore Sun this week that putting the estate tax in line with the federal tax could cost the state between $80 million and $90 million a year in revenues. And he was skeptical that the tax cut would generate new revenue.

Every election year, it seems, the General Assembly passes some piece of legislation that is politically popular but later proves to be a major drain on the state treasury – think about the tax cut in the last year of Parris Glendening’s first term, or the Thornton education funding bill, passed in the election year of 2002. Could the estate tax cut be this year’s version?

The proposal to cut the estate tax was part of a broader business package the legislative leaders rolled out, which included the creation of a commission to examine the state’s business climate, along with measures to jump-start cybersecurity firms and help universities reap more tax credits and endowments for their business programs. Cynics might suggest that after years of promoting, or at least enabling, a very liberal agenda, Miller and Busch’s business package is something of a lifeline for embattled moderate Democrats who will be asked to defend the O’Malley record on the campaign trail this year.

Busch and Miller have been exceedingly helpful to the O’Malley administration throughout his tenure – and they continue to be. And now he owes them.

But O’Malley’s liberal critics – and he does have a few – will point out that he has already provided state incentives to casino owners. Another tax break for millionaires, as O’Malley prepares his national campaign, may not be the best way for him to repay Miller and Busch.

Murphy’s Law

The recent decision by Del. Peter Murphy (D) to forgo reelection and run for Charles County Commission president instead – unheralded so far in the state’s leading media outlets – has thrown the politics of one of the state’s fastest-growing jurisdictions into a tizzy.

For starters, Murphy’s ambitions now collide with those of County Commissioner Reuben Collins (D), who thought he had a clear path to the county’s top job (Collins did himself no favors when he was popped just the other day for drunk driving).

Murphy’s decision also ended the brief retirement of the current commission president, Candace Quinn Kelly (D), who had already announced that she wasn’t going to run again and seemed to intimate that she was done with politics. As soon as Murphy disclosed his intentions late last month, Kelly announced that she was going to run for the House – in a move that left some political observers wondering if the two allies had been working in concert all along.

Had Murphy chosen to seek reelection, it probably would have been smooth sailing in the primary for him and the other two House incumbents in District 28, C.T. Wilson (D) and Sally Jameson (D). But now other Democrats in addition to Kelly may get into the race, destabilizing the security of all the incumbents.

Veteran observers of Southern Maryland affairs can lay out all the political implications of the switcheroo far better than I can. But at a minimum, if you’re looking ahead to 2018, when venerable Sen. Mac Middleton (D) may opt for retirement, Kelly, assuming she wins a House seat this time around, becomes a major player in the scramble for succession.

Beyer’s Remorse?

When LGBT and Democratic activist Dana Beyer announced last week that she’ll challenge state Sen. Rich Madaleno (D) in the primary, she transformed Montgomery County’s District 18 into one of the top legislative battlegrounds of the primary season.

Can Beyer beat Madaleno? It’s hard to imagine at this early stage. Madaleno is smart and hard working and well respected at home and in Annapolis. But Beyer is also well known in the district and she’ll run an aggressive and well-funded campaign. She starts at a time when Madaleno will be tied down in Annapolis, and he’s made some votes that she’ll be able to pick apart.

There’s some justification for Beyer’s risk-taking: Five of Montgomery County’s state senators had super-tough primary challenges in the past two election cycles; three lost, and two hung on by the barest of margins.

But perhaps more significantly, the Senate battle may further imperil some of the shaky House incumbents in the district. They’ve relied on Madaleno’s political chops and largesse in past primaries, but this time he’ll be preoccupied with Beyer, and forced to husband his limited resources (just $37,000 cash on hand in early January).

Now, with several energetic challengers in the House race, you have to wonder if Beyer’s decision to run for Senate just made incumbent Dels. Al Carr ($42,000 on hand) and Ana Sol Gutierrez ($28,000) more vulnerable than they already were – maybe even more vulnerable than Madaelno.

Thriller

Former Prince George’s County Sheriff Michael Jackson, who was runner-up to Rushern Baker in the 2010 Democratic primary for county executive, has set up a new fundraising committee.

While the paperwork doesn’t specify what office he’s running for, and he hasn’t filed a statement of candidacy yet, the rumor mill says he’s planning to run in the new District 27B subdistrict in the southern part of the county.

Josh Kurtz is editor of Environment & Energy Daily, a Capitol Hill publication. He can be reached at .

   

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Josh Kurtz has been writing about Maryland politics since late 1995. Louie Goldstein, William Donald Schaefer and Pete Rawlings were alive, but the Intercounty Connector, as far as anyone could tell, was dead.


But some things never change: Mike Miller is still in charge of the Senate. Gerry Evans and Bruce Bereano are among the top-earning lobbyists in Annapolis. Steny Hoyer is still waiting for Nancy Pelosi to disappear. And Maryland Republicans are still struggling to be relevant.


The media landscape in Maryland has changed a lot, and Kurtz is happy to write weekly for Center Maryland. He's been writing a column for the website since it launched in January 2010.


In his "real" job, Kurtz is editor of Environment & Energy Daily down on Capitol Hill. But he'll always find Maryland politics more fascinating.


Kurtz grew up in New York City and attended public schools there. He has a BA in History from the University of Wisconsin and an MS in Journalism from Columbia University. He's married with two daughters and lives in Takoma Park, Md. He hopes you'll drop him a line, or maybe go out for a meal with him, because he's always hungry -- for political gossip.