How'd we get in this mess?

Frank A. DeFilippo

November 27, 1992|By Frank A. DeFilippo

A LITTLE history helps explain how we got in this mess.

In 1967, Maryland chucked its flat-rate tax and, with the help of a patrician Montgomery County senator named Blair Lee III, adopted a "progressive" income tax. The state budget was just a tad over $1 billion. (Today, it's around $11 billion.)

Lee was doing a good deed for Baltimore as well as the rest of the state at what was the dawning of the golden age of cooperation between the city and the suburban counties.

Gov. Marvin Mandel, with deep Baltimore roots, cemented the tacit understanding by reaching across county lines to pick Lee as his secretary of state and later lieutenant governor. And as lieutenant governor and acting governor, Lee watched over Baltimore's interests while simultaneously dispensing a fair share state boodle to his home county.

Those were the bad old days, too, when Montgomery was still a Sleepy Hollow of tract housing and gentlemen's farms, while neighboring Prince George's was a zoning jigsaw of pizza parlors and car dealerships.

They were the days, too, when a Montgomery teacher named Lucille Maurer, then a delegate and now state treasurer, became the Earth Mother of education spending. She confected a formula that redistributed tax dollars so that the rapidly declining city got more while Montgomery, becoming one of the wealthiest subdivisions in the nation, at least wasn't hurt.

And during that something-for-everybody era, Governor Mandel launched program under which the state took over the entire cost of school construction, a tremendous boon for both the city, with its many 19th-century buildings, and rapidly growing suburbs like Montgomery.

Then there were jerry-built formulas such as impact aid for schools and police aid for the city. Baltimore won such glittery baubles as the World Trade Center, the Convention Center and the subway, all of which helped spur the development of the Inner Harbor. The state bought Friendship Airport for $31 million. And as another act of fiscal mercy for Baltimore, the state bought the city's bus system and incorporated it into Maryland's mass transit system. As trade-offs, Montgomery and Prince George's counties were kept happy and quiet with Washington Metro subsidies and additional miles of Metro services.

There were give-aways to state employees -- free health care, regular pay raises, incentive bonuses and more holidays than any other public employees under God's canopy -- at one point as many as 16.

Millions were spent on water treatment plants and other environmentally friendly projects across the state. Bridges and roads were built at a cost of billions. Hungry school kids were fed, low-cost housing was built, the new R Adams Cowley Shock Trauma Center was established at a cost of $35 million. Another $30 million paid for Shock Trauma's rescue helicopters.

To finance it all, there were bookkeeping gimmicks, tax table revisions and a 2-cent increase in the sales tax over 10 years. Above all, growth in state revenues chugged along at a steady 9 to 10 percent.

Through the slumbering years of Gov. Harry R. Hughes (who inherited a $300 million surplus) and into the turbo-charged Schaefer regime -- he lucked into a $400 million federal tax windfall -- the spending continued and the degree of local dependence increased. The savings and loan bailout alone cost $400 million. There were new ballparks, light rail and the state takeover of Baltimore's community college, jail and zoo. The city's ministers of influence were hoping for another $150 million to expand the Convention Center.

Omens of apocalypse were everywhere, and over the past two years the bills finally came due -- nine rounds of budget cuts as well as the largest tax package in Maryland history.

The Lee-Maurer era of good will turned not only sour but downright nasty. A tetchy regional fight finally erupted over cuts of $147 million in Social Security the state pays for local teachers and librarians.

Montgomery, with the best-paid teachers and librarians in the state, resisted taking the largest cut ($27 million), just as Baltimore County had refused to support the tax increase last winter. And caught between the devil and the deep was the city. It supported the Social Security cuts, though it has to take a $16 million hit.

What's really happening is this: After the dizzying build-up of programs and aid to the subdivisions, the state is now disengaging from responsibility. It is shifting not only obligations back to the counties, but taxing authority as well. Maryland is no longer a state. It's a loose confederation of 23 counties and Baltimore City.

All of which proves that it's easy to govern when there's money, but, as Governor Schaefer has discovered, it's hell to govern when there's not.

Frank A. DeFilippo, who was Governor Mandel's press secretary, writes every other week on Maryland politics.

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