Slim Pickings for Schaefer

December 22, 1993

Maryland's economy, which is giving signs of gradually climbing out of recession, remains troubled. After losing 122,000 jobs in the economic downturn, it will take years for the state to fully recover. What this means for Gov. William Donald Schaefer as he enters his final year in office is yet another hold-the-line budget. The latest revenue estimates offer the governor slim pickings.

There are a few good signs out there. The state's Board of Revenue Estimates told the governor last week that the holiday buying season looks quite promising. But there's no way of knowing if this is part of a larger trend in which heavy consumer spending persists into the new year. Construction employment is showing signs of life. Some of that vacant office space is being filled. Home sales are edging upward, and with it comes increased demand for appliances and furniture.

"Hot" industries also seem promising: health services, telecommunication supply and services, personal services and biotechnology all look like job-creators over the next two years.

Still, growth in personal income won't be rapid. Replacing all those well-paying defense-industry jobs that vanished takes time although Maryland did manage to pick up 4,850 new jobs under the base-closure realignment plan).

Maryland, because of its dependence on the federal government for jobs, has been one of the slowest-growing states in the 1990s. And it is lagging behind most other states in its economic recovery.

For the governor, that translates into a 4.7 percent revenue increase for the next fiscal year, or $300 million in new general funds. But after you subtract $100 million for added Medicaid payments; $100 million for statutory increases in local aid; $50 million for non-discretionary expenses such as prisons and juvenile services, and $50 million for a 3 percent pay raise for state workers (the first in four years), there's nothing left over.

Yet by the time Mr. Schaefer submits his budget to the legislature, we suspect money will be found for pet projects. The governor wants to earmark additional funds for impoverished schools. He wants to begin an overhaul of the welfare system. But he won't have the cash to undertake these changes all at once. He'll have to leave it to the next governor to fully achieve these objectives.

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