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Discussions of the year begin and end with the economy.

Like every other state, Maryland, the nation's wealthiest, is trying to cope with less money.

But 2008 brought other major issues as well — from the historic elections, including the passage of a slots referendum; to state police spying; to a recommendation that Maryland abolish the death penalty; to some proven and alleged hanky-panky by politicians.

A summary of some of the major stories of 2008 in Maryland follows:

State-of-the-art State House

After the legislative session, the 228-year-old State House shut its doors in April for a $10 million makeover.

Contractors removed ceiling tiles and portions of walls in order to replace the structure's 40-year-old heating and cooling pipes, as well as electrical wires, carpets and lighting. Crews also added a women's restroom on the bottom floor and a sprinkler system and smoke detector on the first floor, and removed asbestos throughout the building, which is the nation's oldest state capitol building still in regular use.

The work pushed Board of Public Works meetings, tour groups, the governor's office and the State House press corps out of the historic building.

The governor's office and press corps are preparing to move back into the State House in the coming weeks, in time for the 2009 General Assembly session, which starts Jan. 14.

Can you spare a dime … or $2 billion?

In April, the General Assembly passed a $31.2 billion spending plan, after cutting nearly $500 million.

The economic downturn led to significant revenue shortfalls, forcing cuts late in the year and recommendations of severely curtailed spending in the fiscal 2010 budget that Gov. Martin O'Malley will propose in January.

In September, state transportation officials announced that a lack of federal aid, coupled with declining revenue from gasoline and titling taxes and registration fees, would force the deferment of $1.1 billion in projects.

The cuts, spread throughout the capital budget for fiscal 2009 through fiscal 2014, included deferring $530 million that will delay or change the scope of about 50 highway projects that are under construction statewide and $437 million in Maryland Transit Administration projects, including track improvements on MARC's Penn Line and engineering for the Purple Line, a proposed 16-mile bus or light-rail link between the Bethesda and New Carrollton Metro stations.

In October, the Board of Public Works approved nearly $350 million in cuts to the current year's budget, including public health programs, higher education, the arts, welfare services, public schools and the environment.

A worsening economy caused revenues to continue to plunge. In December, O'Malley said he was preparing $400 million in cuts as the state Board of Revenue Estimates reduced its estimate of general fund revenues for the current fiscal year by $415.3 million and predicted that the budget deficit could grow to $2 billion in fiscal 2010.

O'Malley (D) also ordered furloughs for 67,000 state employees.

The bipartisan Spending Affordability Committee recommended limiting growth in the fiscal 2010 budget to 0.7 percent, the smallest increase in 27 years.

Tough cuts are ahead as lawmakers prepare to return to Annapolis on Jan. 14.

O'Malley, who called the rate of the revenue decline "fairly unprecedented," has said it will be "mathematically impossible" not to impact health, education and public safety, which make up about 85 percent of the budget.

The doldrums spread

Maryland's once-booming biotech sector was not immune to the economic ills of the nation.

The climate for investing in biotech companies, which make up a significant part of Maryland's economy, has been down for some time, said Richard A. Zakour, executive director of MdBio of the Tech Council of Maryland, which supports the state's biotech industry.

"I don't think it's peculiar to biotechs, it's going on all around us," Zakour said. "I don't think biotech venture investing is feeling any more pain than anybody else right now. And I hear the same thing on the tech side regarding venture investing."

The economic woes were felt throughout the state. Home sales declined sharply.

In Montgomery County, the average home sold for $425,700 — 18 percent less in November than it did the same period in 2007, according to Metropolitan Regional Information Systems of Rockville.

In Howard County, the average home sold for 10 percent less in November from the same period in 2007, but the number of homes sold plummeted by nearly half.

Meanwhile, car dealers found themselves facing their worst slowdown in memory.

"The key with us is floor traffic," said Silver Spring auto dealer Robert Fogarty. "Maybe people are nervous and don't think they're creditworthy."

Peter Kitzmiller, president of the Maryland Automobile Dealers Association, said automobile sales were down about 15 percent across the state.

"This is going to be the worst we've had in a long, long time," he said. "With the package for the automakers and the new administration coming in, it's going to be until the middle of next year before it turns around."

University of Maryland professor Peter Morici of the Robert H. Smith School of Business said the banking and housing crises, along with the growing trade deficit, pose the risk of turning the recession into a depression.

"The trade deficit will make the recession longer and deeper, and lessen the positive benefits of President-elect Obama's proposed stimulus package," Morici said in an e-mailed statement.

"If Obama does not fix the banks and significantly reduce the trade deficit, stimulus spending will not permanently pull the economy out of recession, and the economy could easily slip into a prolonged malaise or depression."

A couple of Denver nuggets

With the nomination of Illinois Sen. Barack Obama as the party's presidential candidate, Maryland Democrats turned out in force to elect the country's 44th president.

Along the way, the state's political leaders and elected delegates traveled in late August to Denver for the Democratic National Convention.

In a state where Democrats outnumber Republicans 2 to 1, Maryland was a guarantee for Obama, and the state delegation unfortunately got the "safe" treatment with a convention seat assignment in the rafters — behind Louisiana and the shine from New Orleans Mayor Ray Nagin's bald head.

Nevertheless, the convention energized the Marylanders, and members of the state's congressional delegation, including Steny Hoyer, Christopher Van Hollen and Elijah Cummings, delivered convention speeches.

Perhaps most eventful at the convention was the potential uprising by Hillary Clinton supporters — including Maryland's "Clinton 6" group of delegates, led by Mary Boergers — who wanted the New York senator's name to be included in the roll call vote for the presidential nomination along with Obama's.

Clinton quelled any potential feuds with a last-minute meeting with her supporters and a classy concession of the nomination to Obama on the convention floor. Obama later repaid her loyalty by nominating Clinton as his secretary of state.

Movin' on up

Pushing the presidential primary election to Feb. 12 put Maryland in the thick of the races. In the days leading up to the primary, the Free State saw visits from Hillary and Bill Clinton and Barack Obama, as well as GOP candidate Mike Huckabee and his wife, Janet.

With Clinton and Obama still battling for the nomination, Democrats saw more than 50 percent turnout statewide, with a record number of nearly 822,000 Democrats going to the polls statewide.

As John McCain zeroed in on the Republican nomination, 36 percent of eligible Republican voters braved icy conditions that led to the polls being kept open an extra 90 minutes.

In Maryland's 1st Congressional District, Sen. Andrew P. Harris defeated nine-term incumbent Wayne T. Gilchrest.

Obama won Maryland with 61 percent of the vote to 36 percent for Clinton, claiming front-runner status with commanding victories in the Potomac Primary, so-called because Maryland, Virginia and Washington, D.C., all voted the same day.

Observers credited the heavily contested primary and enthusiasm for the Democratic candidates for an 11.9 percent surge in Democratic voter rolls in Maryland since 2006. Republican registration increased just 1.9 percent in that time, showing the uphill climb the GOP has in the Free State, where the number of third party and unaffiliated voters grew by 12.4 percent.

One-armed bandits galore

Voters approved a constitutional amendment that allows 15,000 slot machines in five locations in Allegany, Anne Arundel, Cecil and Worcester counties and Baltimore city.

A ballot referendum passed by a 58.6 percent to 41.4 percent margin after a long campaign that pitted high-profile state officials against each other and included a ruling by the Court of Appeals.

On Sept. 15, the court ordered that the word "primary" be inserted in the question to reflect that education would be the main recipient of the slots revenue.

Comptroller Peter V.R. Franchot (D), the most ardent slots opponent, accused Gov. Martin O'Malley and legislative leaders of kowtowing to gambling interests in supporting the referendum.

The measure was included with a package of budget cuts and new taxes that O'Malley pushed through the legislature during a 2007 special session called to close a $1.5 billion budget gap.

Legislative analysts project the machines could generate $1.36 million by fiscal 2013. Of that, a projected $660.4 million would go toward schools.

The referendum won support from the state teachers union, AFL-CIO and the American Federation of State, County and Municipal Employees, the Maryland Chamber of Commerce and horse-racing interests.

Supporters of the referendum argued that legalizing slots would bring much-needed revenue to the state's budget by stemming the flow of an estimated $400 million now flowing across borders to slots parlors in Delaware and West Virginia.

Opponents, which included some clergy members, local chambers of commerce and the National Association for the Advancement of Colored People, argued that the machines would not capture as much as proponents estimate, would harm the poor and would inject gambling interests into state politics while bringing social ills such as gambling addiction.

They were outspent by slots supporters by about 7 to 1.

A fresh look at helicopter program

A Maryland State Police helicopter took off Sept. 27, taking two teenage accident victims to Prince George's Hospital Center. It didn't make it. In the fog, the chopper crashed in a District Heights park, killing four.

The effects of the crash will be felt through at least the beginning of 2009.

Two state senators are proposing legislation to reorganize the medevac program, which opens the door for private companies to fly missions delivering trauma victims from accident scenes to hospitals that can treat the injuries.

The board that oversees emergency medicine in Maryland also is expecting a report from a panel of experts that reviewed the state's medevac program in November.

The experts, who took about four hours of testimony, suggested state police adopt the same flight rules that govern commercial aircraft instead of the rules that oversee private aircraft. The differences could cost $500,000, said Maj. Andrew J. McAndrew, commander of the state police aviation division.

The experts also recommended that the medevac program receive accreditation, which would mean the helicopters would fly with two paramedics, instead of the one currently used.

All of this comes as the state is wrestling with a $110 million plan to replace the aging fleet. Some of the helicopters are 19 years old.

The experts also suggest a close study of the program, which could lead to reducing the 11-helicopter fleet or cutting back the number of flights.

Dr. Bryan Bledsoe, one of the experts, has been a critic of helicopter programs because he believes they are overused. Current research, he said, shows that the time it takes to get a patient to a trauma hospital does not predict outcome.

"Then what is the role of the helicopter? That is not clear," Bledsoe said. "This isn't just a Maryland problem. It's a global problem."

The GOP's last stand

Energized by Sen. John McCain's pick of Alaska Gov. Sarah Palin as the first Republican woman to receive the party's vice presidential nomination, GOP'ers convened in St. Paul, Minn., for the Republican National Convention in early September.

Hurricane Gustav blew plans slightly off course, as the storm's assault on the Gulf Coast forced Republicans to reschedule the convention's opening days, bumping President Bush off the program and focusing the theme of "Country First" around public service projects that collected donated goods for states affected by the storm.

Once proceedings got going, Maryland's own former lieutenant governor, Michael Steele, scored the second-best line of the week's highlighted speakers (behind Palin's "pit bull in lipstick" quip) with the mantra "Drill, baby, drill!" echoing through the Xcel Energy Center.

After November's election, the media darling and GOPAC chairman announced a run for chairman of the Republican National Committee.

Notably absent in the Twin Cities was Steele's former Annapolis partner, former Gov. Robert L. Ehrlich Jr., who remained a presence on WBAL radio and kept speculation alive about the future of the party.

They tax-eth and tax-eth away

Negotiations over repealing the "tech tax" colored the 90 days, as budget measures passed during a special session in late 2007 consumed the 2008 legislative session.

Lawmakers repealed a 6 percent sales tax on computer services on the session's final weekend after businesses organized an aggressive lobbying effort.

Faced with a $200 million budget hole, lawmakers replaced the tax with a three-year, 6.25 percent tax bracket on incomes over $1 million and $100 million in cuts to transportation and other state programs. In June, the Board of Public Works cut $50.1 million from the fiscal 2009 budget to offset the loss of the tax revenue due to the repeal.

The O'Malley administration successfully pushed a package of bills that aims to trim energy use by 15 percent by 2015 and double the renewable energy that utilities offer to customers to 20 percent by 2022.

The energy package was part of a year of mixed success for environmental groups.

O'Malley, who has received high marks from green interests, successfully pushed reforms to the Critical Area Act, which limits shoreline development, though the legislation was scaled back from its original form. Lawmakers halved a $50 million contribution to a fund for Chesapeake Bay cleanup and killed a bill to curb global warming emissions amid concerns from labor that it would cost jobs.

A plan to collect DNA from suspected violent criminals won passage on Sine Die after tense negotiations with black lawmakers who worried the proposal unfairly targeted racial minorities.

The collapse of the housing market also led to the passage of legislation extending the length of time of the foreclosure process, criminalizing mortgage fraud and regulating the mortgage lending industry.

Until death do …

A bill to repeal the death penalty was scuttled in favor of a 23-member Maryland Commission on Capital Punishment.

Led by former U.S. Attorney General Benjamin R. Civiletti, the panel included victims' relatives, clergy, corrections and law-enforcement officials and attorneys from around the state, as well as three state delegates and two state senators.

Over the course of their five-month study, the commission heard nearly 20 hours of testimony from more than 80 people.

Witnesses included members of the public, victims' family members, exonerated former death-row inmates, legal experts and clergy. High-profile witnesses included David Kaczynski, who turned in his brother, convicted Unabomber Theodore Kaczynski, and Barry Scheck, co-director of the Innocence Project in New York.

Ultimately, the panel voted 13-9 in favor of abolishing the death penalty in Maryland.

In December, the panel produced a 132-page report that found that racial and jurisdictional disparities exist in capital sentencing; that the costs in capital cases are substantially higher than in cases seeking life without parole; that states should increase services to victims' families; that even with advances in forensic science, including DNA, there is a "real possibility" of executing innocent people, and that there is no evidence that the death penalty serves as a homicide deterrent.

A 22-page minority report said that Maryland should reserve the death penalty for the worst criminals and that jurisdictional disparities in its application reflect the will of voters in those areas.

Get out the shoe phones

In July, a lawsuit by the American Civil Liberties Union revealed that Maryland State Police had spied on nonviolent anti-war groups between March 2005 and May 2006.

The intelligence, gathered by undercover officers, was entered in a database under the classification of "terrorism."

In October, former attorney general Stephen H. Sachs, who Gov. Martin O'Malley (D) appointed to investigate the spying, released a 93-page report. The report found that police were wrong to label the activists' activities as terrorism and that the authorities intruded on activists' First Amendment rights. Sachs also recommended that police make files in the database available for viewing by the activists named there.

The Senate Judicial Proceedings Committee held a hearing that featured testimony by Sachs, state police Superintendent Terrence B. Sheridan and former state police superintendent Thomas E. "Tim" Hutchins, under whose watch the spying occurred.

Later in the month, the state police sent letters to 53 peaceful activists whose names appeared in the database, including environmentalists.

After several weeks of wrangling between state police and the ACLU, the police announced that the activists would be permitted to have lawyers present as they viewed their files and to make copies of them before the files were destroyed.

Lawmakers have said they are preparing legislation related to the issue for the 2009 General Assembly.

Nine in '09 for congressional Dems

Democrats will control nine of Maryland's 10 seats on Capitol Hill when the 111th Congress convenes next month, an advantage they hope to exploit with a new Democratic administration taking office.

Congressman-elect Frank M. Kratovil Jr. scored a narrow upset victory over state Sen. Andrew P. Harris in the historically GOP-friendly 1st District in November to boost Democrats' edge and flip a seat that had been in Republican hands since 1991. Harris dethroned nine-term incumbent Rep. Wayne T. Gilchrest in a bitter GOP primary to open the door for Kratovil, who remained an underdog through Election Day.

The Democratic dominance represents a major political shift since 2001, when Republicans controlled half of Maryland's eight seats in the House of Representatives. Rep. Roscoe G. Bartlett (R-Dist. 6) of Buckeystown is the sole Republican holdover from that group.

Kratovil's victory, which was not secured until absentee and provisional ballots extended his lead to more than 2,000 votes, triumphed by courting moderates sympathetic to Gilchrest, pushing his Eastern Shore residency and touting his experience as a two-term Queen Anne's County state's attorney. The renegade Gilchrest, known for breaking ranks with Republicans in Washington, crossed party lines to endorse Kratovil.

"When we started this campaign, the other side said this was a race that they would win seven days a week and twice on Sunday," Kratovil said on Election Night when the outcome was still undetermined. "Well, this may not be a Sunday."

The Democratic Congressional Campaign Committee, led by Rep. Chris Van Hollen (D-Dist. 8) of Kensington, made a significant investment in the race to aid Kratovil's effort. Still, Harris (R-Dist. 7) of Cockeysville received substantial support from the conservative Club for Growth movement and outraised the Democrat by more than $1 million. Together, the pair garnered more than $5 million, making it the most expensive U.S. House campaign in Maryland history.

Kratovil, 40, has yet to receive his committee assignments, but expressed an interest in serving on panels that oversee agriculture, the environment and transportation infrastructure, all of which greatly impact the sprawling 12-county district he will represent. He will formally be sworn into office Jan. 6.

A slap on the wrist to go around

In March, the Court of Appeals dismissed a lawsuit brought by Republican lawmakers that challenged the legality of the 2007 special legislative session.

The lawsuit attempted to nullify legislation passed during the session that raised the sales, corporate income, tobacco and vehicle titling taxes and that cleared the way for a ballot referendum on slot machine gambling.

GOP lawmakers alleged that the taxes should be overturned because the Senate adjourned for six days without a full vote in the House of Delegates, which they said violated state law. They also alleged a House clerk backdated a document to show House consent.

Irwin Kramer, the attorney for the Republicans, said that the General Assembly shirked its fiduciary responsibilities by putting the slots referendum to voters, and argued that the ballot question was deceptive and should be thrown out.

Democrats claimed that the suit was politically motivated and frivolous.

The court upheld a January decision by Carroll County Circuit Court Judge Thomas F. Stansfield, who criticized Democrats for procedural flaws in passing the bills during the November 2007 special session, but said the legislation should not be voided.

Legal troubles rule the day

It was a troubling year for current and former members of the General Assembly who had run-ins with the law.

Robert A. McKee abruptly left the State House complex in February amid rumors that the FBI raided his Hagerstown home and turned up child pornography. The following day, McKee resigned from the House of Delegates and his longtime job as executive director of Big Brothers/Big Sisters of Washington County.

McKee, a Republican representing Washington County since 1995, was sentenced in November to 37 months in prison, followed by supervised release for life. He pleaded guilty in September and admitted that he had obtained child pornography online and by mail as early as 2004.

Del. Andrew A. Serafini (R-Dist. 2) of Hagerstown was selected in March to fill McKee's seat.

In July, former senator Thomas L. Bromwell reported to federal prison in Massachusetts to begin serving a seven-year sentence for racketeering, conspiracy and filing a false tax return.

The once-powerful Senate Finance Committee chairman was convicted in November 2007 of accepting hundreds of thousands of dollars in financial kickbacks and other perks from a Baltimore construction company. In addition to cash payments, Bromwell received work on his home and a no-show job for his wife for steering a state contract to Poole and Kent Corp. Mary Patricia Bromwell was sentenced to a year and a day in prison for her role.

Several other officeholders also made headlines this year for the wrong reasons.

State prosecutors raided the home of Baltimore Mayor Sheila E. Dixon in June as part of a lengthy probe into dubious City Hall spending practices. Several weeks later, the focus shifted to Dixon's ties with developer Ronald H. Lipscomb, who gave the then-city council president thousands of dollars in gifts; the two admitted to having a personal relationship in 2003 and 2004. Dixon has repeatedly denied that their relationship influenced government decisions, even as it was revealed that Lipscomb's company may have benefited from city development contracts.

That followed the guilty plea entered in March by a city contractor who employed Dixon's sister when the mayor was a city councilwoman.

Media reports in March suggested that Sen. Nathaniel Exum (D-Dist. 24) of Capitol Heights may have unduly exerted his influence to reissue the license of an automotive inspection station in his district. The station, Hilltop Fleet Services, had its license revoked in 2002, after state police said the station claimed to have performed more inspections than it had the resources to handle.

The company's attempts to regain its license were repeatedly denied until this spring, around the same time Exum threatened to delay the confirmation of Col. Terrence Sheridan as state police superintendent. Exum, who cast the sole dissenting vote against Sheridan, denied the corruption allegations and said his vote reflected his concern over the lack of diversity in the state police force.

A second politician became the subject of a federal probe in May when the FBI raided the District Heights home of Senate Budget & Taxation Chairman Ulysses Currie and the headquarters of Shoppers Food Warehouse in Lanham.

The investigation has since focused on whether Currie, who consulted on behalf of Shoppers, improperly used his position in the General Assembly to benefit the grocery chain. He was paid $207,000 by the company since 2003, but failed to disclose his employment with Shoppers on state ethics forms.

Also in May, Frederick County police were called to the New Market home of Sen. David R. Brinkley for a domestic disturbance. A police report indicated that Brinkley and his wife, Sallie Brinkley, clashed over marital issues. No criminal charges were filed, but Brinkley said he opted to not seek re-election as minority leader so he could get his personal life in order.

Senate Republicans in September elected Allan H. Kittleman (R-Dist. 9) of West Friendship, the former minority whip, to succeed Brinkley as minority leader. Brinkley said he plans to run for re-election in 2010.