Grading the governor

Ehrlich’s initial year in office was all the more difficult because Maryland hadn’t elected a Republican governor since Spiro T. Agnew in 1966. Getting the mountains of cobwebs and rust out of the GOP governance machinery proved far more daunting than anyone imagined.

Nor did Ehrlich ever dream his former legislative roommate, Mike Busch, would ambush him as speaker of the House on Ehrlich’s key issue — slots at racetracks. Busch killed the Republican governor’s plan every session.

That first-year rebuff of slots proved a turning point: going forward, both the Republican governor and top Democratic legislators shunned compromise and opted for hardened partisanship that was the worst this state had seen in generations.

All this set the stage for Martin O’Malley’s 2006 election and the return of full Democratic control of the statehouse.

This transition proved far easier than Ehrlich’s since O’Malley had been governing the state’s largest and most troubled city, Baltimore, since 1999. That job taught O’Malley management skills and prepared him for running state government.

O’Malley’s inner circle of advisers, meanwhile, simply moved their offices down the road and hit the ground running.

However, Team O’Malley lacked statehouse expertise. Even with full cooperation from Busch and Senate President Mike Miller, the new governor needed to buy time. He did so by not proposing any major initiatives in his first legislative session.

He didn’t overextend his team. Instead, he used the 2007 session to get to know legislators and figure out how to exercise the enormous muscle of the governor’s office.

O’Malley’s big early mistake came when he ignored the state’s looming structural deficit that topped $1.5 billion.

Instead, he foolishly embraced rapid growth in government programs during his first session. He exhausted the entire $2 billion one-time surplus built up by Ehrlich, thus leaving Maryland in a much deeper fiscal hole.

This profligate spending, ironically, set the stage for November’s special session in which most major Maryland taxes were raised to close a yawning budget gap.

The good news is that O’Malley didn’t hesitate to tackle the dreaded T-word. He took a wrong turn, however, when he shut legislators out of the tax discussions. So it was not surprising when lawmakers revised large chunks of the governor’s submission. His willingness to compromise and apply diplomatic pressure, though, helped gain the crucial votes needed for final passage.

O’Malley also worked relentlessly to push through the legislature a slots referendum. Much will be riding on the outcome of that November vote. Without slots revenue, the state’s budget picture is bleak. With slots, O’Malley could boost state spending significantly in education, health care and social welfare.

The bad news is that O’Malley settled for half a loaf when it came to hiking taxes. The state remains a half-billion dollars short of what it needs each year to balance its books. It also will take another $200 million a year to construct the state’s top road and rail projects.

This is not a happy picture, particularly when added to a weakened Maryland economy that could worsen in 2008. The next few budgets could be trying for O’Malley, who will have to trim anticipated spending for many existing programs, particularly in education. Indeed, the rest of his term could be dominated by issues related to growing budget deficits that require spending hold-downs — or more taxes.

Still, in reviewing the past 12 months, it was a solid performance by O’Malley. He filled his cabinet and other high offices in state government with quality men and women. He didn’t toss out every Republican in sight. While he’s been unreasonably slow in filling judgeships, the governor’s ultimate choices have been first-rate.

For Year One, I give Martin O’Malley an A-minus. Some will say that is overly generous. Yet for a freshman governor, O’Malley seized the moment and took enormous risks. He attacked the state’s deficit demon head-on. He finally got legislators to approve a plebiscite on slots. He showed a level of maturity and command of governance Ehrlich lacked in his first year.

Those are superior achievements. Too bad he didn’t push for additional tax changes, such a higher gas tax indexed to inflation and a truly graduated income tax that would pay for future social initiatives.

But O’Malley didn’t want to risk the ire of middle-class voters — his vaunted ‘‘working families.” This excessive political caution could well haunt the governor during the rest of his term.

Barry Rascovar is a communications consultant in the Baltimore area and longtime statehouse columnist.