Regional Policy Forum

Yesterday I had the opportunity to attend the Regional Policy Forum hosted by the Greater Washington Board of Trade. First, I must say that it was an excellent event and I would like to thank the GWBOT for the invite. The panelists for the discussion were:

1. Secretary Ric Brown, Office of Finance Commonwealth of Virginia
2. The Hon. Peter Franchot, Comptroller of the State of Maryland
3. Dr. Natwar Gandhi, Cheif Financial Officer of the District of Columbia.

All three of the panelists are very distinguished and highly educated individuals. Frankly, I enjoyed listening to all three speak. They were very honest and upfront, although very gloomy, about the issue facing the local economy. Below are a few points that were made:

MD, The Hon. Peter Franchot

- April tax revenue is down 32% compared to April of last year.
- MD's $1.8 billion dollar deficit will grow.
- Unemployment in MD has doubled.
- 2 more years of a downturn expected
- MD is required to present a balanced budget to legislature, however when it comes out of legislature it may no longer be balanced.
- Currently MD needs to cut an additional $200 - $300 million from the budget.

DC, D. Natwar Gandhi

- The economy is a mess and is very concerning
- Tax revenues are down $400 million in 2009, will be down $900 million in 2010, and down over $1 billion in 2011 and 2012.
- DC is required to present a 5 year balanced budget.
- DC added 4,500 new jobs this year, although an interesting fact is that DC has a 37% illiteracy rate and its citizens are not qualified for these new jobs.
- Unemployment will hit 11.5%
- Office vacancy is 7% now, and will grow to 11% in the next 2 years

VA, Ric Brown

- Estimates were for a 2009 decrease in tax revenue of 7.3%, however, currenlty it is tracking at an actual decrease of 8.6%.
- Between now and June 30, 2009 VA is predicting a shortfall of $195 million in tax revenue.

All three candidates had very interesting things to say about the Federal stimulus money. Maryland was excited to say that it is one of the first states to actually receive money because they had "shovel ready jobs". DC and VA will both receive stimulus money as well. Dr. Gandhii went as far as to say there will probably be another stimulus package. The interesting thing is that all three candidates agreed the stimulus money wasnt fixing anything but was filling holes in the budget and was preventing some layoffs.

All three candidates said there is very little interest in raising taxes. They balked at a gas tax and did not want to institute any other taxes in an election year.

Here is what all of this means:

- The economy is still in shambles. There will be much more pain to come.
- The Federal Government's stimulus plan has done nothing more than delay the inevitable and will have to be done again until we are ready to face our economic day of reckoning.
- All of our elected Politicians completely understand the only real way to get out of us is to do some serious belt tightening, slash the budget (making very serious decisions on many programs), and raise taxes. There is one problem, it is an election year and all they care about is getting re-elected. They have chosen to use stimulus money to fill the gaps in the budget until they are re-elected then they might do there job.....but lets see how things are looking then.

I must say, I think this is crap. When I run for office, and one day I will, I will base all my decisions on what needs to be done for the good of my constituents and not what will get me re-elected. When you become an elected official you take on the resposibilty to do the right thing, which sometimes is not the popular thing. Sitting around and watching our state goverment go bankrupt and not doing anything about it because you are worried about your re-election is completely unethical and in my opinion is failure to serve the public.

We need to address all of these issue NOW!!!! Someone must take a long look at the budget and make cuts where necessary and if we are running at a deficit then we need to raise revenue (taxes) or rethink certain programs. Throughout this recession our government has preached how Wallstreet was out of control and that Americans are using to much debt and dont save. I think the goverment, both Federal and State, need to take a long look in the mirror and realize they are no different.

As a side note I find it hilarious when I got into my office a paper was sitting on my desk and the front page article read.

"D.C. cuts $27.5 million from the school system."

Dr. Gandhi I know you are a brilliant man but I dont think this will help that 37% illiteracy rate.