'America in Minature' No Longer

Peter A. Jay

February 21, 1993|By Peter A. Jay

Annapolis.- - Back in the better days, Maryland boosters used to call their state America In Miniature.

Mostly, they had geography and settlement patterns in mind. The interesting little place stretched from the mountains to the sea. It had an appealing mix of farms and small towns, with both Southern and Midwestern touches. Right in the middle was an old-fashioned city with smokestack industries, downtown department stores and places to view naked ladies.

In politics, Maryland was microcosmic too. Through the mid-1960s, it tended to vote in national elections as the nation did, backing Eisenhower, Kennedy and Johnson for president. Analysts looked at the state as a kind of sounding board. Its instincts, affections and prejudices were those of the whole country.

Nowadays, we look less like the nation -- or, perhaps, less like those parts of the nation tourists want to see. Suburbanization has encrusted great stretches of Maryland landscape, oozing over farms and overwhelming small towns. Baltimore is reduced and unappetizing, like what remains in a forgotten pot of coffee ++ that's been left boiling on the stove.

Politically there have been fundamental changes too. The typical Marylander is no longer a farmer, a steelworker, a small-business owner or a waterman; instead she's probably a lawyer or a member of the American Federation of State, County and Municipal Employees. Twenty percent of Maryland jobs today are in government; only 9 percent are in manufacturing.

In Maryland, between 1990 and 1991, the average annual pay for government jobs increased 7 percent, from $29,312 to $31,358. In no other state did government pay increase so much. In the same period the state's average private-industry pay increased only 4.2 percent, from $23,674 to $24,672.

What Maryland seems to be reflecting in the 1990s isn't the United States any more, but Washington. At least that's the way it looks from here, where the state government is grappling once again with a budget teetering on the edge of Deficit Canyon.

Budgets are constructed from estimated revenues and expenditures. In Maryland, as in Washington, the current strategy is to jack up the former by increasing taxes, and to conceal the latter by any means available. Maryland lacks the Washington options of printing or borrowing money to cover its deficits, but it makes up for that by propping up its own budget with federal funds.

Consider anticipated revenues. Just about everyone here agrees that for the rest of this century, the state's receipts should increase, on average, by a little more than 4 percent a year. That's only about half the rate of increase that prevailed during the boom years of the 1980s, but it's still a pretty nice pay raise for our plump little government.

Then there are the expenditures. In the next fiscal year, thanks to a staggering tax increase approved by the General Assembly at its last session, there should be enough in the till to pay the bills and leave a surplus. But following that, there are likely to be deficits again. Legislative analysts project annual spending to keep outstripping annual revenues, perhaps only by a percent or two, but year after year after year.

That isn't inevitable. State spending for Medicaid and for education assistance to the counties, programs which together account for one-third of the budget, shows signs of stabilizing by fiscal 1995. If that happens, if revenues don't tumble, and -- the real key -- if the average growth of all other state agencies can be held below 3 percent a year, future budgets might avoid disaster.

"We're a COLA away from budget balance," says one of the Schaefer administration's sharp-pencil specialists, noting that a 3 percent cost-of-living increase for state employees, though initially only costing perhaps $60 million, would upset the precarious projections for stability over the next five or six years.

But whether or not we pause for a COLA, if general-fund spending can't be controlled with the kind of determination Governor Schaefer has never shown, we're over the cliff again. As the state cannot, constitutionally, operate at a deficit, annual last-minute scramblings to come up with new taxes, or more new state-run embarrassments like the keno venture, will become commonplace. Maryland's old reputation for fiscal soundness is already badly frayed, and a replay of the last two years would blow it to shreds.

Legislative and media budgetbabble to the contrary, controlling a budget does not have to mean "cutting" it. With revenues growing so prettily, even in hard times, there's plenty of money for existing programs funded at current levels or even a little better. Get rid of some superfluous programs, and there would be even more.

The Republicans in Annapolis, led by House minority leader Del. Ellen Sauerbrey, made a serious effort last year to force some budget discipline. But there aren't enough of them to have much impact. If the job is going to be done, Democrats will have to do it, or live with the consequences.

America in Miniature? Not any more. One more slip on the budget banana peel and we'll end up as D.C. in Duplicate.

Peter Jay's column appears here each week.

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