Just how did state get into such a mess? Here are some answers

April 10, 1992|By Marina Sarris | Marina Sarris,Annapolis Bureau

ANNAPOLIS -- Many Marylanders want to know what is going on in the State House. Why can't the state legislature adopt a budget? Why do lawmakers keep talking about taxes?

And could someone explain what it all means -- in the language of regular people, not accountants?

QUESTION: How did the state get into such a mess?

ANSWER: The national recession hit Maryland hard. People lost their jobs and came to state government for welfare assistance. The unemployed and underemployed obviously could not pay as much income taxes as they used to do in better times.

They, along with folks who kept their jobs, stopped buying as much and therefore paid fewer sales taxes.

The state faced an increased demand for government services but a decline in the amount of tax money that pays for those services.

Q: What did the governor and legislature do about it?

A: State government went through round after round of budget cuts last year. Hundreds of government workers lost their jobs as the state slashed more than $1 billion from agencies, schools, local governments and health and welfare programs.

But the deficit continued to grow.

When the legislature convened in January, the governor proposed another half-billion dollars in budget cuts and a sweeping, $700 million increase in state taxes and fees. The legislature, however, couldn't agree on the budget cuts or taxes.

Q: What is the so-called "doomsday budget"?

A: That term is used by the governor and legislators to refer to the budget that would take effect if the General Assembly rejected new taxes. Unlike the federal government, the state is required to approve a balanced budget.

Q: What would happen if lawmakers refused to raise taxes and adopted such a budget?

A: State leaders say a number of state and local government workers would lose their jobs. The state would not be able to send as much money to the counties and Baltimore City, forcing local leaders to cut services or raise property taxes, the most unpopular tax in town.

Q: Why couldn't the legislature come up with a solution by the time the regular 1992 session ended Monday?

A: Many legislators are skittish about raising taxes in general, and they couldn't agree on which taxes to raise in particular.

House and Senate leaders disagreed on the makeup of the tax package. The delegates preferred to raise taxes on corporations, wealthy people and the buyers of gas-guzzling vehicles.

The senators, however, wanted to close more exemptions in the state's 5 percent sales tax and apply the tax to currently untaxed services.

A group of conservative Democrats and Republicans in both chambers refused to vote for any tax increase at all.

Some legislators on both sides of the issue tried to delay action in hopes of using the 90-day session deadline to their political advantage. When the clock struck midnight Monday, however, the legislature still had not passed a budget or tax package.

Legislators are now in an extended session, during which they can only adopt a budget.

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