Stopping the Pink Slips

December 18, 1990

After sending 60,000 state workers into a panic last week, Gov. William Donald Schaefer finally heeded the calming advice of legislative leaders and reversed his earlier decision to fire 1,800 state workers to help close a $423 million budget gap. The governor accepted a long list of alternatives that the legislature's top fiscal analyst came up with that would avoid layoffs and allow for a gradual downsizing of government through attrition.

Why didn't Mr. Schaefer take that route earlier? Why did he insist upon frightening state workers will large-scale firings? At one point, he even mentioned the possibility of dismissing 13,000 workers to balance this fiscal year's budget. Can you blame workers and their unions for being upset?

Mr. Schaefer's too-hasty decision to send out pink slips could have been avoided had he worked more closely with legislative leaders on financial problems from the outset. Former Governors Hughes and Mandel always did, and with excellent results. The General Assembly's fiscal adviser, William S. Ratchford, understands the Byzantine ways of state budget-making better than anyone in Annapolis. His deficit projections, for instance, were right on the mark. (The governor's figures, meanwhile, were embarrassingly off-target.) Yet Mr. Schaefer never consulted Mr. Ratchford as the revenue picture grew bleaker. Instead, he excoriated Mr. Ratchford for his pessimism.

Nor was there any consultation with other legislative budget experts before the governor announced his layoff plans. He deprived himself of their considerable knowledge in dealing with budget crises over several decades. They knew there were ways to save tens of millions of dollars without resorting to wholesale firings. But the governor never asked for their input.

Fortunately, Mr. Schaefer reversed course last Friday. He took another look at Mr. Ratchford's money-saving suggestions and discovered that many of them made a lot of sense. Granted, the package won't solve the state's budget crunch in the next fiscal year, but it will buy time so officials can implement a long-term plan for cutting government costs. And by next spring, the state's economic outlook might not be so bleak.

As Governor Schaefer prepares for his second term in Annapolis, he would be wise to seek advice from Mr. Ratchford and the Assembly's top fiscal experts on complex budgetary matters. A prolonged recession, for instance, could revive talk of layoffs. The governor will need all the help he can get from lawmakers in such a situation. Cooperation, not confrontation, is essential.

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