Maryland at a fiscal crossroads

January 02, 1992

It is perhaps redundant to say that these are hard, frugal

times. But it is important nonetheless, because with the state itself strapped for money as 1992 begins, the nobler instincts of lawmaking will undoubtedly be sacrificed to fiscal reality this year. The rhetoric and policy-making in Annapolis are likely to be driven almost wholly by dollars.

Maryland, like most other states and the federal government itself, is at a crossroads. With the boom times of the 1980s over, our tax structure can no longer keep up with the demands government is placing on it. This year Marylanders are going to be forced to make the toughest choice: to decide what we want government to do, and whether we are willing to pay for it.

With the unrelenting demands of programs like prisons, education and public assistance, which the state has virtually no choice but to provide, the options are fairly stark: either restructure the tax system to generate more money or cut the services that come out the other end. Given the public's clearly articulated disdain for major tax increases, we expect lawmakers will find less direct ways to raise money in 1992, and that they will be compelled to make fairly severe budget cuts in addition.

Almost certainly the legislature will start by slashing the governor's bloated staff and the assorted amenities officials once considered perks. But whole departments may well take body blows, and services previously considered essential may no longer be affordable. Another likely budget-cutting target is the money the state doles out to local governments. We expect lawmakers to give the city and counties the power to raise the piggy back income tax to compensate. But while this undoubtedly will be a bonanza for wealthy counties like Montgomery, Prince George's and Howard -- and a big boost for Baltimore, Anne Arundel, Harford and Carroll -- it will do little to help Baltimore city, which continues to suffer from middle-class flight. A small sales tax increase, on top of an expansion of the services currently taxed, is also virtually inevitable. So, too, a hike in the gas tax, but only if the money is dedicated to specific projects.

The fiscal focus in the General Assembly will also likely extend to policy. Already, legislators are starting to make noises of support for the helmet law, heretofore a perennial loser, because it promises to save money. Consideration of the merger of UMBC and UMAB, too, will probably hinge on the bottom line rather than education arguments. The merger idea, like every other, is going to be subjected to the scrutiny of frugality. Any plan that requires more spending will have a hard time getting through the legislature.

As such, 1992 is slated to be a political turning point, because the decisions made this year will affect what Marylanders expect of their government and what it can do -- not just for the short term, but for many years to come.

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