Progressive but Cautious in Annapolis

April 11, 1993

"Prevention" proved the key word in the just-passed $12.5 billion state budget in Annapolis. For Gov. William Donald Schaefer, that meant preventive social programs to stop health and crime problems before they get out of hand. For leaders of the General Assembly, that meant steps to prevent Maryland's fiscal crisis from suddenly reappearing.

Both of these themes underscore the new spending plan. Mr. Schaefer won approval for more pre-kindergarten programs, more money for drop-out prevention work, expanded use of contraceptives, more preventive health programs, more help for at-risk families to prevent foster care placements and more drug enforcement activities.

But at the same time, legislators reduced some of the governor's expansive plans. Otherwise, the Schaefer budget would have spent money faster than the state's economy could generate tax revenue. So lawmakers cut 1,200 vacant positions, cut back Medicaid and welfare spending projections to more realistic levels and pared enough in other programs to keep the budget in line with the expected growth in personal income.

And in case the economy suddenly turns sour again, lawmakers took another important step: they added $50 million to the state's "rainy day" fund, bringing it to an unprecedented $150 million. They also left another $20 million unspent just in case the welfare and Medicaid projections turn out to be badly off-base. That's frugal and cautious budgeting.

The governor and legislators also took a much-needed progressive step to redistribute local aid more equitably. A total of $216 million in new state aid will be handed out in direct assistance, a nearly 10 percent rise. Most of these funds will be dispensed through formulas that give preference to poor subdivisions, where the need is greatest. That's the way it should be.

Even with an uncertain economic outlook, Mr. Schaefer and lawmakers fashioned a budget that avoids any tax increase yet restores money to local governments and puts a new emphasis on preventive programs. It is a budget based on conservative revenue estimates (except for a badly inflated estimate on the keno lottery game) that leaves a thick cushion for the unexpected. It is a substantive budget that both Governor Schaefer and fiscal leaders in the General Assembly can take pride in having brought to fruition.

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