Ever since I've lived in southern Maryland, the mantra has been that our region and state are recession proof because of our proximity to Washington, D.C. The preponderance of government and military installations, and the constantly upward trend of government growth, was supposed to be our economic ace in the hole. As we enter our second year of high unemployment and revenue shortfalls that led to our $2 billion budget deficit, I'm beginning to wonder if that dependency is more of a curse than a blessing.
Governor Martin O'Malley likes to tout the fact that, although Maryland's unemployment rate is the highest it's been in 26 years at 7.5 percent, it's below the 10 percent unemployment rate nationwide. That 7.5 percent number is misleading; it doesn't include people who've stopped looking for work. Count them and the number is around double-digits.
Regardless, the fact we're suffering less than others doesn't diminish the impact on our families and communities. "We're not as bad off as they are" is a poor excuse for not showing leadership and handling our state's finances in a fiscally responsible manner.
O'Malley credits the federal government with keeping Maryland's unemployment rate low relative to the rest of the nation. The growth in government jobs, however, masks some disturbing trends in Maryland's private sector.
The private sector in Maryland accounts for more than half of the state's employees and, in 2009, 2,900 employers in Maryland closed their doors. Normally, as population grows, business openings are higher than business closings, but that's not what happened here in 2009. More businesses, especially in the construction industry, will shut down in 2010.
No worries - we've got the federal government to cushion the blow, and they're hiring, right? This assumes, however, that a government job is equivalent to a private sector job.
Unfortunately, that's not the case. Government jobs do not create wealth; in fact, they only consume and redistribute wealth. Private sector jobs generate wealth and make government jobs possible. The alarming trend of the past decade is that the public sector is growing while the private sector which sustains it is shrinking.
I'm not questioning the necessity of government jobs, especially in public safety, national security and education, but in order to have those jobs, we need a robust private sector and, in Maryland, we don't have it.
The anti-business climate in our state is keeping large employers at bay or pushing them across the Potomac to Virginia. Our small businesses are suffering under higher taxation and regulatory burdens for which compliance comes at the expense of productivity. When productivity suffers, no income is generated, salaries stagnate, and jobs are lost.
It's laughable that the federal government's answer to our struggling small business community is a $5,000 tax credit for every person they hire, and Governor O'Malley, in a me-too moment, is offering $3,000 per worker hired.
Small businesses don't hire based on tax credits; they hire when there's a demand for their goods or services, and there's work to be done to meet the demand. Taking Maryland's per capita personal income of about $925 a week, a figure that is skewed by high paying government jobs, $8,000 in tax credits will barely pay the salary of a new employee for two months.
This is what happens when we're saddled with a federal administration that has the fewest appointees with private sector experience in history, and a state government that thinks wealth creation is evil. Everything they learned about profit and loss, generating income, or managing a payroll came out of some left-wing textbook they read in college. It's small comfort indeed that they at least recognize the private sector has to create jobs for us to pull out of our economic nosedive.
Not only does Maryland lean on the federal government to make its employment and income figures look good, it also depends on $4 billion in federal stimulus funds to help balance our state's budget. What happens when those funds run out? They will have created a demand for services that we'll not be able to pay for, even though the beneficiaries will insist they continue.
Higher medical and unemployment benefits being funded with temporary federal dollars will either have to be curtailed or funded somehow. Where is the money going to come from? Do you even need to ask?
Maryland's dependence on the federal government is worrisome for our state's future. O'Malley is writing budgets that anticipate billions in federal dollars being provided to us. What if the money doesn't come through? The rapid growth in government jobs is masking an increasingly crippled private sector and, unless something changes, the state will not meet its revenue projections for years to come.
Delegate Michael Smigiel, for one, sees the danger of too much dependence on the federal government, and is proposing that Maryland wean itself of the drug before it's too late.
He is sponsoring Maryland House Joint Resolution 2 (HJ2), "Maryland Sovereignty under the 10th Amendment to the US Constitution," to end unfunded and illegal mandates being placed on the state by the federal government.
I support this proposed bill and, if it doesn't pass this year and should I be elected, I will co-sponsor or reintroduce it on the state Senate floor. Maryland has surrendered its independence and fiscal well-being to Washington, and it's time we pulled back before we bring more harm to the hard-working Marylanders who count on us to serve them, not the elected officials in our nation's capital.
Ron Miller, of Huntingtown, is a military veteran, conservative writer and activist, former and current candidate for the District 27 Maryland Senate seat, communications director for the Calvert County Republican Party, and executive director of Regular Folks United, Inc., a 501(c)3 nonprofit organization. Ron is a regular contributor to RegularFolksUnited.com, American Thinker, and RedCounty.com. You can also follow Ron on his website TeamRonMiller.com, as well as Twitter and Facebook.