No New Taxes, Governor

PETER A. JAY

October 07, 1991|By PETER A. JAY

HAVRE DE GRACE — There's no doubt Maryland's in a budgetary mess these days, but it could be worse -- and almost certainly will be if the legislature heeds the raise-taxes-now wails echoing across the state.

It's a truism that running a government in good times is easy, but running one in bad times is a challenge. Governor Schaefer is getting credit for his ''realism'' in knocking $450 million out of the current budget, but to a considerable extent Mr. Schaefer is simply dealing with his own chickens as they come winging home to roost. His administration's open-handed ways when revenues were high not only set up the state for a painful readjustment when the economy tightened up, but probably contributed significantly to the local downturn as well. If he gets his way now, look for the free-fall to accelerate.

Marylanders would do well to check on what's been happening in Massachusetts, a state roughly similar in size and political culture, over the last decade. There are some useful lessons for us there.

In the mid-1970s, during Michael Dukakis' first term as governor, the Massachusetts economy was stagnant. In 1978, Governor Dukakis was defeated by Edward King, who cut taxes statewide and supported a successful referendum that limited local property taxes as well. The economy boomed, just in time for little Mr. Dukakis, who was returned to office in 1982.

The boom lasted long enough for Mr. Dukakis to enthusiastically inflate the state's payroll and run for president as the architect of the Massachusetts Miracle, but by the time he was destroyed by George Bush in 1988 he was holding things together at home with lies and scotch tape. The miracle ended in tragedy for

Massachusetts and ignominy for Mr. Dukakis, who didn't run for another term in 1990 and today is still probably the most unpopular man in his state.

But what's happened since is especially interesting. The new governor, a WASPy Republican named William Weld, is no conservative, but has been around long enough to recognize what works and what doesn't. He's trimmed the state payroll by 7,000 employees, more than three times Mr. Schaefer's cuts. He's also successfully backed repeal of a state tax on services, promised to veto any tax increases, and is energetically exploring privatization of such state money sinkholes as Logan Airport and the Massachusetts Turnpike. Massachusetts is still in economic trouble, but the mood is more cheerful and most trends are pointing up.

What Mr. Weld has apparently grasped, and Mr. Schaefer and his allies apparently have not, is that widespread public opposition to new taxes, a mood so unexpectedly stern it has put some real backbone into the General Assembly, doesn't spring from ''selfishness'' or ''lack of compassion.'' It isn't anti-poor-folks, it's anti-government.

If there were confidence that the revenue from additional taxes would be well spent by the state, there would be little resistance to reasonable tax increases. But that confidence isn't there, and reasons why it isn't are all around us.

Mr. Schaefer finds that he needs a staff of more than 100. His predecessor had only 75 or so. A decade before that, J. Millard Tawes operated the governor's office with about half a dozen people, including clerical help. Other offices show similar increases in staff and budget. But has the expansion made possible by many years of economic growth really brought us better government?

By targeting the popular and the pathetic -- the state police and recipents of general public assistance, for obvious examples -- with his budget chainsaw, Mr. Schaefer would like to make the point that he is at the end of his rope, and the only alternative to more taxes is public-sector chaos. But thoughtful people won't buy that.

In fact, most of his announced cuts are reasonable ones. Will Maryland be worse off because local arts groups get only $4.5 million instead of $5 million, for example, or because there is no longer a glossy but dull taxpayer-supported Maryland magazine? Get real.

When it comes to true budgetary reform the state has barely scratched the surface. There are abundant opportunities to pay more costs with user fees; remember when there used to be tolls on I-95 north of Baltimore? Responsibility for many more programs ought to be transferred to Maryland's counties, which could then decide whether or not to fund them. (Though Maryland is overall a highly taxed state, property-tax rates in most of the counties are much lower than in, for example, much of New England.)

Privatization of some state-operated colleges is now, at last, being explored. But how about a serious look at privatizing the management of certain of our prisons or parks, and at selling some state property? The sale of Baltimore-Washington Airport could probably wipe out the current deficit at one stroke.

Mr. Schaefer, pedagogically standing before us, asks us the loaded question ''What Should Maryland Do?'' He knows the answer he wants. We should approve new taxes, whether camouflaged as a Linowes-type ''restructuring'' of the income tax or a plain-vanilla $150 million sales-tax increase.

But this response is both dangerous and intellectually flabby. We who are stuck in the governor's statewide classroom, especially the members of the legislature up there in the front row, ought to be pretty careful before we tell him what he wants to hear.

Peter A. Jay's column appears on alternate Mondays.

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