The state's chief financial officer delivered a good news, bad news speech to Odenton residents Wednesday night. Yes, Maryland's economy is in bad shape, but no, fiscal doom will not result.
In a talk spiced with humor and filled with numbers, Louis L. Goldstein, the state comptroller for more than 30 years, said the recession crippled Maryland's two largest revenue sources -- income and sales taxes.
But he said the state's "outstanding fiscal reputation" means Maryland will weather the economic downturn better than most.
It was a speech of contrasts. Goldstein spouted off numbers that told of fiscal catastrophe and then listed figures showing how the state can rebound and come out ahead.
But it took a question from a resident toget to the topic on everyone's minds.
"Is the only answer more taxes?" asked Ron Watts, who lives in the Seven Oaks development.
Goldstein smiled. His jacket was off and he was mingling in the crowd, as if he were talking to old friends.
He told Watts not to worry, but to relax and not believe the newspaper stories saying the state'sbudget deficit this year is $450 million.
"Every day there is some new deficit figure," he said. "When we close fiscal year 1992, we are going to close with a balanced budget.
"Put that down. I said it at 8:15. I've been through this before. Just wait. It takes time."
Goldstein said all the budget deficit talk makes "good headlines,"but when he closed out fiscal year 1991 with a $55,000 surplus, "Yousee what they did? They buried it on page 16 next to the obituaries.
"It's all right. I can sleep at night. It doesn't bother me any."
But Goldstein didn't say whether taxes would have to go up to balance the budget, which is mandated under the state's constitution.
Instead, he talked about why the state is in financial trouble.
"I know that the times we face today are as economically challenging as any I have seen in my long career in state government," he said.
"I tell you, I've never seen anything like it. Sales and use tax washit from both barrels -- a fall-off in consumer spending and confidence and a downturn in the all-important construction industry."
Goldstein said housing starts nationwide in 1990 dropped to their lowest level since 1982, and building permits in Maryland dropped to theirlowest level since 1981.
"When the construction industry is in trouble, it's not just like
the ripple effect of a pebble in a pond," he said. "It's more like a meteor hitting the Chesapeake Bay. It's a tidal wave."
Goldstein also blamed the growing federal deficit.
"Each day, day-in and day-out, our federal government uses 17 percent of our hard-earned tax dollars for a purpose that provides not jobs, provides no services and does nothing to improve the lives of Americans."
That money, he said, pays off the interest on the national debt.
"If a trillion-dollar company was run the way the federal government is run, the stockholders would riot in the streets.
"Asyou know, the states are barely keeping their heads above water. Butinstead of throwing us a lifeline, Uncle Sam has tied a bag of bricks around our ankle."
But Goldstein said Maryland would survive. Hesaid inflation at
the retail level is moderate, holding interest rates low, unemployment is declining and industrial output continues to rise.
"Above all, Maryland remains one of only four states to hold the coveted triple A credit rating from all three major bond rating agencies," he said.
"These different factors give us a firm foundation on which to build our economic future here in Maryland."