Political Budget Cuts

Last month Gov. Martin O'Malley told a WTOP radio audience that when cutting state aid to the state's 24 local subdivisions he would "make sure the cuts were shared in a fair way."

A week later everyone found out what "fair" means to O'Malley when he unveiled $210 million in local aid cuts that protect some counties while slamming others.

Here's how the game works: The state distributes some $6.4 billion annually in direct aid to the locals via dozens of various grants and programs using dozens of different formulas and criteria. For instance, police aid is distributed per capita but with extra cash for counties with high population densities. Transportation aid is based on population and on each local jurisdiction's miles of highway.

The state aid grants and their distribution formulas are largely based on politics, not merits. So savvy state lawmakers who flex their political muscle end up with grants and formulas that pump the maximum state aid dollars into their jurisdictions.

And for every aid dollar that comes from the state the locals pay one less dollar in local taxes. That's called "bringing home the bacon (i.e., other people's money)."

More than 70 percent of Maryland's state aid is "equalized" i.e. distributed inverse to each county's wealth, because the less affluent counties have the votes to fleece the affluent. As a result, the less affluent counties get most of the state aid. That's why 49 percent of Somerset County's local budget comes from state aid but only 14 percent of Montgomery's. So when cutting state aid "in a fair way" you'd expect pro-rata reductions — the same percentage reduction applied to every county's total state aid, right?

Wrong, just as the state aid levels are determined by politics, so are the cuts. Instead of cutting every county or every state aid program equally, O'Malley placed most aid programs off limits and concentrated his cuts on only 14 percent (four grants) of the total $6.4 billion state aid total. And, yes, these are the same four aid grants he slashed in his January budget. This selective cutting protects favored counties at the expense of others.

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