4 more (poor) years for the next governor

Frank A. DeFilippo

September 16, 1993|By Frank A. DeFilippo

MARYLAND'S next governor is going to see red.

So when Gov. Kurt Glendening Steinberg Boergers Neall Bentley Shepard Sauerbrey raises his/her right hand in January 1995, he/she will be affirming more than the obligation to uphold the laws of the state. He/she will be on overload with growing deficits and a companion need for new revenue throughout the next four-year cycle.

The projected shortfalls over four years are partly the results of competing economic forces in and out of government as well as the legacy of the administration of Gov. William Donald Schaefer. And the advance word is that Mr. Schaefer's preparing an ambitious agenda for his valedictory session of the General Assembly.

A worksheet prepared by Mr. Schaefer's own Department of Budget and Fiscal Planning shows that the cost of government will skyrocket in four major areas -- education, prisons, welfare and Medicaid.

Translated into dollars, those rising costs will result in budget shortfalls of $69 million in 1995, $68.5 million in 1996, $170.7 million in 1997 and $299.7 million in 1998. And the projections occur just two years after the largest package of tax increases in Maryland history.

In addition to the explosive cost of education because of the burgeoning school population, state school Superintendent Nancy Grasmick and Donald P. Hutchinson, who heads a committee studying state school financing, have privately told the budget department that they would like the state to pony up an additional $100 million next year for local schools. But they have been told to forget it; there's no new money. The huge tab for education is the main reason Mr. Schaefer is promoting the idea of year-round education as a way of avoiding costly school construction.

The prison population is growing as well and so, too, is the corresponding need for more prison space. It costs about $40,000 a year to house a prisoner (when there's room).

And as every government groupie knows, welfare and Medicaid are robbing the economy as well as the budget.

On top of the built-in incremental increases in the cost of operating government, Mr. Schaefer has made a number of long-range commitments whose cost will be passed on to the next administration.

He's committed $30 million over the next five years to the Johns Hopkins Hospital oncology center. He's pushing for continued expansion of light rail. And he's about to enter an expensive new low-cost housing partnership with Baltimore City.

In the city alone, the state is responsible for the operation of the jail, the zoo, the community college, the Maryland Science Center, the World Trade Center, the Convention Center, the transportation system and the new ballyard. And the state contributes substantially to police protection and heavily to education.

The new budget information arrives against a backdrop of economic uncertainty both in Maryland and across the country. Maryland's unemployment rate is down a tad, but the local economy is failing to create new jobs.

The city itself has lost thousands of manufacturing jobs and is losing residents in droves to the suburbs and even to Pennsylvania. (An area near Shrewsbury is nicknamed "Little Baltimore.")

And because of the soaring cost of benefits, Maryland, like the nation, is becoming a base of temporary employment -- the fastest growing sector of the economy. President Clinton's deficit reduction package is draining billions out of the economy, and his proposed health-care plan is expected to suck billions more indirectly at the expense of the states.

Lottery revenues are down dramatically despite an increase in the number of games and outlets, reinforcing the law of diminishing returns: More games don't necessarily generate more revenue; they merely dilute the pot. The sum of the parts is smaller than the whole.

This year, though, was the first in the last four that the state ended with a modest surplus. The previous three produced great shortfalls, which led to the huge tax package two years ago.

And according to the Schaefer administration's own data, the next four years appear no rosier than the previous three. So the new governor and the half-new General Assembly are being handed a munificent gesture in a pauper's will.

The candidate who wakes up next November as governor-elect might just decide to call in sick.

Frank A. DeFilippo writes biweekly on Maryland politics.

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