Still, Marylanders Just Don't Get It


October 06, 1991|By BARRY RASCOVAR | BARRY RASCOVAR,Barry Rascovar is deputy editor of the editorial pages of The Sun. His column on Maryland politics appears here each Sunday.

That "wake-up call" Gov. William Donald Schaefer sent Marylanders by way of his $375 million in painful budget cuts last week apparently didn't do the job.

Lawmakers and the public remain in a blissful Reaganesque dream world where taxes are never raised, services affecting them personally are never reduced and we all live happily ever after.

Mr. Schaefer's budget cuts aren't public relations hyperbole. They aren't part of a diabolical strategy to "blackmail" legislators into approving the Linowes commission's $800 million tax package. The cuts are quite real, and quite devastating.

If you don't believe this, wait till the next round of cuts, probably in December. Or better yet, wait till you see the budget Mr. Schaefer releases in January. By then, the cuts could be in the $600 million to $1 billion range and wipe out entire programs and agencies and most local aid.

Maryland's budget crunch cannot be addressed only by "downsizing" government. Major upheavals in the state economy are having long-term impact that bode ill for the state's ability to raise enough money even to fulfill basic mandates.

We have turned into a service economy, which translates into fewer high-paying jobs and less tax money through income and sales levies. Moreover, the state excludes services from most taxation, which means the fastest-growing segment of Maryland's economy goes largely untaxed.

Simultaneously, demands on government are rising -- often mandated by federal law -- for prisons, welfare, social services, medical care and education. Perversely, the latest round of budget cuts adds to the state's obligations by throwing more poor people into institutions and prisons. This could lead to another $240 million a year in unavoidable government spending.

In this circumstance, what was the governor supposed to do? He tried to start a dialogue in the legislature on additional taxes last February. Lawmakers rudely turned their backs on him. As far as they were concerned, the problem didn't exist.

When tax returns grew bleak in April, legislators grudgingly raised some nuisance taxes in May to help close the new revenue gap. But that didn't resolve anything. The situation continued to deteriorate every month. Lawmakers refused to take the situation seriously.

They still don't.

But Mr. Schaefer, as governor, has an obligation to face reality. He did what had to be done. He probably will have to do so again late this year if spending for welfare, Medicaid and prisons keeps rising and the economy keeps slumping.

Yet it may not be until early next year that legislators finally are dragged into the debate. They've been sitting on the sidelines, happily sniping at Mr. Schaefer for impolitic budget cuts even as they refuse to take steps to reverse these cuts. When the 1992 budget is unveiled, though, that sniping will end, and lawmakers will be on the hot seat.

If the governor submits a budget in January without any tax-increase proposals, he'll have to make deep slashes in government, perhaps $1 billion worth, that only legislators can avoid. Here are targets being considered:

* Freezing local school aid at current levels (savings -- $170 million).

* Ending the state's property tax grant to the counties ($108 million).

* Cutting the APEX school-aid enhancement package ($58 million).

* Ending state property tax credits ($44 million).

* Capping the state's payments for pensions and Social Security for teachers, librarians and community college professors ($41 million).

* No longer sharing taxes with the counties ($35 million).

* Terminating aid to private colleges ($26 million).

* Across-the-board cuts to agencies of 12.3 percent ($372 million).

This last step would be devastating, given the upheaval that accompanied last week's 5.4 percent reductions in state agencies.

For instance, the $23 million cut for the Department of Public Safety and Correctional Services that created a furor over closing two State Police barracks and two Medevac helicopter stations would be a drop in the bucket compared with a cut in January that could be triple that size.

The University of Maryland's $35 million reductions so far this fiscal year could be a pittance next to the $79 million cut that could occur in January. The health department, still staggering from last week's $77 million cut, would face another $97 million reduction. Even the governor's office, which has been cut only $860,000 so far, could be hit with a $1.8 million reduction.

Layoffs could become common. To date, the governor has avoided massive firings, though 1,766 were terminated last week. That won't be possible in the next two rounds. The number of layoffs in the January budget could approach 10,000 -- more than 10 percent of the state work force.

Is this "scare rhetoric"? Hardly. Maryland could face chronic deficits in the 1990s, even with tax increases, because of slower growth in the state economy. That's something legislators and the public don't want to face. They still believe they can get something for nothing. To them, this fiscal crisis is a myth that will disappear when the recession ends. State economists -- the ones with the best grasp of what's occurring -- don't agree.

We're in a heap of trouble, even if ostensible "leaders" in the legislature refuse to admit it.

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