I’ve been observing the fiscal crisis in the once-great state of California with more than a little trepidation. The current budget debacle here in Maryland invites comparison to California’s unfortunate circumstances, and the parallels between them are too many to ignore. California’s slide from one of the nation’s most prosperous states to one that can’t pay its bills and is issuing IOUs should be a cautionary tale for us here in the Free State – if anyone cares to listen.

California’s diverse economy was once the envy of the nation, with a gross domestic product higher than most countries. World-class institutions of higher learning, a highly educated and skilled workforce, rich natural resources, moderate weather and its proximity to Asian markets, to name a few advantages, combined to make California a great place to live and do business.

Maryland has a few advantages of its own. The U.S. Census Bureau ranks Maryland’s median household income as the highest in the nation. Its workforce is ranked 8^th by Forbes magazine, and it is home to the University of Maryland and Johns Hopkins University, both of which are consistently listed among the top schools in the nation.

The Baltimore-Washington Metropolitan Area offers great diversification in the job market, and the state’s economy employs people in transportation, life sciences, agriculture, white collar technical and administrative services, food production, and tourism. Baltimore is the 8^th largest port in the nation, and the state’s mid-Atlantic location and the predominance of the Chesapeake Bay make it a major transportation hub.

That’s the good news. The bad news is that Maryland is one of the most highly taxed, highly regulated states in the nation, with a one-party political monopoly in Annapolis dating back to pre-Civil War days and a knee-jerk hostility to free enterprise that threatens to drag the state into long-term economic chaos.

The comparative rankings between Maryland and California tell the story. Maryland is 42^nd in the nation in business costs – that’s the costs to businesses of energy, labor and taxes. California is 50^th. Maryland’s business tax climate puts it at 45^th nationally; California is ranked 48^th. Maryland has the 4^th highest individual state/local tax burden in the nation, exceeding even California with its 6^th highest ranking.

Maryland’s unemployment rate is at its highest level in 26 years and the increase in unemployment benefit claims is threatening to bankrupt the unemployment compensation fund, automatically triggering up to a tripling of taxes on already-strapped businesses to refill the coffers.

The fiscal malpractice of the current state government, led by Governor Martin O’Malley, is largely responsible for the mess in which Maryland finds itself. Every fiscal year under this administration’s so-called leadership has been characterized by impulsive decisions that put off tough choices and penalized productivity until we are now faced with a projected $2 billion budget deficit when the General Assembly convenes in January.

O’Malley and his enablers, House of Delegates Speaker Mike Busch and Senate President Thomas V. “Mike” Miller, knew that Maryland was projected in the years ahead to spend more than it took in; O’Malley ran and won on the promise that he would deal once and for all with the so-called “structural deficit” – that’s the future shortfall anticipated due to the projected rate of spending versus revenue. Note the words “future” and “projected” which indicate it hasn’t happened yet and can still be prevented if the will is there to do so.

What has happened since the campaign, however, has been a travesty, a study in failed leadership, political gamesmanship and incremental thinking. Consider the following events:

March 2007 – O’Malley balances the budget primarily by depleting the rainy day fund the previous Governor had left for him. The $1 billion transfer left the rainy day fund at its statutory minimum. He also increased spending.

November 2007 – O’Malley calls a special session of the General Assembly and raises taxes by a record $1.5 billion. Overnight, Maryland’s business tax climate ranking went from 25^th to 45^th, and the state’s individual income tax rate is now the second highest in the nation. They also increased spending.

March 2008 – The General Assembly repeals a computer services tax but replaces it with a “millionaire’s tax”; Maryland is one of only six states with such a tax. To date, the millionaire’s tax has brought in one-third less than expected. They also increased spending.

November 2008 – An intense marketing campaign persuades Maryland voters to codify slot machine gambling in the state Constitution; this additional source of revenue was promoted as a solution to the structural deficit. As of this writing, gambling interests are staying away in droves.

March 2009 – The General Assembly benefits from yet another patchwork solution, receiving $3.8 billion in federal “stimulus” money over two years which spares them from making deep budget cuts this fiscal year – or so they thought. They also increased spending.

September 2009 – The Board of Public Works estimates the state must make $230 million more in cuts to the current fiscal year’s budget to ensure it stays balanced. These cuts come after $735 million in cuts already made in recent weeks when it became clear that actual revenue fell far short of projections by hundreds of millions of dollars.

With a projected $2 billion deficit looming over us next year and recurring shortfalls that could grow to $2.7 billion in four years, the most maddening thing about this administration’s actions over the past three years is – get ready for it – they also increased spending. What was it about the term “fiscal crisis” they didn’t understand? Their lack of restraint and hostility to the producers, innovators and entrepreneurs in our state have come back to haunt us. If we don’t get real leadership and honesty from O’Malley and crew in the months ahead, an unlikely prospect given their history, it’s time to toss them to the curb.

If we don’t flatten tax rates, expand the tax base through business-friendly tax and regulatory policies that create jobs, reform the budgetary process for greater transparency, spending discipline and taxpayer relief, and demand results for the taxes we pay or else kill programs that don’t work, we’ll only have one thing left to say.

California, here we come!

Ron Miller of Huntingtown, Maryland is the executive director for Regular Folks United, a 501(c)3 foundation, and a conservative activist and writer. He is a candidate for public office in the state of Maryland and his website is TeamRonMiller.com.