Why Economic Good News Is Bad News

BARRY RASCOVAR

November 29, 1992|By BARRY RASCOVAR

The good news is that some of the economic indicators for Maryland are finally upbeat. The bad news is that a return to financial health is likely to short-circuit steps to reorganize and shrink state government in Annapolis.

That would be tragic. Only after years of economic hardship have state legislators finally gotten serious about taking a fresh look at the way government does its business.

The most far-reaching recommendations of the Butta commission on efficiency in government won't be released till next month -- and then might well be ignored.

Another key panel, headed by former transportation chief William S. Hellmann, is formulating plans for privatizing parts of government. But if tax revenues pick up, as now seems likely, the Hellmann panel could also find its work consigned to the junk heap. Bureaucrats, after all, will fight any and all privatization efforts. Why go through the struggle if you don't have to?

That's an incredibly shortsighted attitude, but not surprising. Throughout this lengthy recession, state legislators and the Schaefer administration have staunchly resisted making the kinds of fundamental changes that have long been needed.

It's not a matter of the state government being filled with "waste and fat." That's a myth perpetuated by tax-rebellion fanatics. Whatever meaty appendages existed in those pre-recession years were amputated long ago. In order to truly downsize government now, you've got to shake up the way Annapolis conducts its business and try some new, creative approaches.

That's not going to happen in a growing economy. Gov. William (( Donald Schaefer can't wait for some extra state revenue to re-build social service programs crippled by years of budget cuts. He also is anxious to start initiating even more social programs for Marylanders in need. And then there's the matter of economic development: the state has to spend a lot more than it now does if it hopes to lure job-creating corporations to Maryland.

Yet clearly Maryland's state government isn't in tip-top shape. It is a creaking structure that should receive a thorough renovation. Departments should be merged. Agencies should be consolidated and reduced in size. Greater use of state-of-the-art equipment, such as up-to-date computers and telecommunications systems, should be mandated. Private-sector incentives should be used to promote cost-savings and at the same time boost morale.

HTC Who's going to spearhead such a change? Not the governor. He's a builder, not a demolition expert. But the situation cries out for someone who's got the gumption to stop defending the status quo and is willing to experiment with other ways of operating government agencies.

Numerous departments already have been forced to re-examine how they conduct their daily business and have figured out ways to maintain service with a smaller staff. But no one has embarked on a government-wide crusade.

Local governments are doing a better job of re-focusing activities. They've learned how to downsize without too much pain. They've also proved more adept at managing their budget dollars. The state continues to spin its wheels.

"We're not positioning ourselves for the future at all," said one disgruntled local official, citing the lack of a long-range budget plan in Annapolis. The state has survived simply by raising taxes, shifting expenses to local governments, draining slush funds and nipping a bit at agency budgets. There's been little true downsizing.

And now, with retail merchants reporting encouraging shopping activity for the third straight month and sales tax receipts jumping smartly in a report due out soon, the pressure to shake up government could ease. There might even be enough extra revenue to let the governor balance his January budget without hacking away further at state agency allocations.

Will House Speaker R. Clayton Mitchell still insist on changes intended to shrink state expenses in the years to come, such as lumping overlapping departments together and selling profit-making operations? He might not have the mandate he needs anymore -- not if the state budget is in balance once again.

Sadly, Maryland has learned little from its recessionary experience. Pennsylvania and Virginia, on the other hand, realized early on that downsizing, however painful, was necessary. These two states bit the bullet. They're in good shape now. They're coming out of the recession with a slimmed-down state government that better meets the realities of the 1990s.

So don't expect much in the way of big changes in the shape of state government in the coming months. That's not how the governor wants to be remembered. As for legislators, they're sick to death of fiscal problems. Without a gun pointed at their heads, they're unlikely to find the courage to make sweeping changes. They're more concerned with positioning themselves for re-election -- and to heck with the future well-being of the

state.

Barry Rascovar is editorial-page director of The Sun.

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