Budget Woes Will Hurt Both Ways

December 16, 1990|By Barry Rascovar

BUDGET, BUDGET, BUDGET. That's all you hear in Annapolis these days. State House officials are obsessed with questions dealing with layoffs, program cuts and deficits. There are protest marches, picket lines and nasty words directed at the governor. Everyone wants to find a way out of this predicament without harming anyone -- or raising taxes.

It won't happen. The total Maryland deficit for the next 18 months -- counting this year's shortage, next year's projected shortfall and the Transportation Department's money gap -- exceeds $840 million. There's no way to close that gap, as required under the state Constitution, without hurting people and raising taxes.

The something-for-nothing crowd that kicked out all those villainous local officials in the fall elections still is screaming ''no new taxes.'' These groups have terrorized most state legislators sufficiently to make a major tax rise in 1991 a virtual impossibility, except for a higher levy on gasoline -- it's either that or stop repairing roads.

This leaves one alternative -- what critics refer to as ''cutting the fat'' out of the state budget. There's only one problem with this approach: to reach that $840 million figure, you have to chop off a lot of bone, not merely ''fat.''

And when you hack off the bone, you create human suffering. Kidney patients who may be forced onto welfare rolls in order to continue dialysis treatment. State workers fired from their jobs. Construction companies forced into bankruptcy because the state had to put an immediate freeze on all its building projects.

It becomes a vicious circle. As more workers are let go, the state's unemployment payments and its welfare and Medicaid payments go up while the state's sales and income-tax receipts drop. As construction firms disappear, more workers join the unemployment lines and corporate income taxes plunge. Maryland's recession deepens and so does state government's fiscal black hole.

Gov. William Donald Schaefer is clearly torn by the human side of this dilemma and his responsibilities as Maryland's chief executive. Layoffs still may be coming, regardless of the protests staged by employee unions. More program cuts are coming, regardless of how hard interest groups try to shame the governor into sparing their programs.

State legislators -- whose fiscal adviser accurately predicted the size of the deficit -- want to ease the pain on state workers. They came up with some intriguing suggestions that Mr. Schaefer too readily dismissed, and then reconsidered.

Why not, for instance, declare the last Friday in every month an unpaid holiday for all but essential state workers? By the end of the fiscal year in June, this would save $36 million. It may be a difficult administrative task, but not impossible.

Why not go even further and declare the day before Christmas and New Year's Eve unpaid holidays -- since many people fail to show up for work on those days anyway?

Why not trim rather than eliminate capital programs and reserve funds -- nothing should be sacred in these areas -- to help close the gap? Special pleadings of cabinet secretaries have to be discounted; to them, all of their projects are absolutely essential.

These steps could avoid eventual layoffs and let the state reduce its work force more gradually -- and humanely -- through an extension of the current hiring freeze into the next fiscal year.

Governor Schaefer has been battered pretty badly in recent days for proposing 1,800 layoffs and other budget cuts. He's right that some legislators have been posturing to curry favor with state workers. Meanwhile, at least one employee union has been posturing -- outrageously so -- to convince workers this is all part of a labor-bashing vendetta by the governor.

He hasn't helped matters by some of his symbolic actions: hiring a new speech writer at $50,000 a year; letting his new transportation chief hire an assistant at $80,000 a year; installing two new rugs in his seldom-used Baltimore office at a cost of $19,500; and debunking a plan to turn back to the state salary increases he and other top officials will get next year.

These actions send the wrong message to citizens, especially to state workers alarmed about losing their jobs. They were examples of conspicuous consumption by government, the kinds of seemingly frivolous spending that led to the voters' revolt in November.

In a time of economic austerity, the governor must lead by example if he wants to impress constituents. Equally important, he's got to calm a panicky state work force fearful that Mr. Schaefer may yet send out thousands of pink slips. This is not a time for showmanship or ''do it now'' extravaganzas. It is a time for careful, determined -- and quiet -- deliberations with legislators, fiscal advisers and union officials as Mr. Schaefer demonstrated on Friday. But the outcome won't be pretty, or popular. As the governor noted, ''there won't be any good guys in this one.''

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