Annapolis Awaits the Great Disruptor

March 03, 1994|By PETER A. JAY

ANNAPOLIS — Annapolis. -- Before 1967, the Maryland General Assembly convened for 60 days every other year. In the interim years, it convened for 30 days, primarily to enact the state's annual budget and deal with emergency business.

Those days were a little before my time, so I don't remember them personally, but I have it on good authority that the state government operated quite adequately. There were about 3.5 million people living in Maryland then, and few of them were ever heard to say that what their government really needed was a longer legislative session.

In some respects, looking at Maryland in the mid-1960s is like looking at England in 1911, the year George V was crowned. There were controversies, of course, and plenty of action and passion, but everything we see now, looking back, is suffused with a kind of golden glow. Bad things were about to happen, but they hadn't happened yet. Those living through those times had no way of knowing that history, the great disruptor, was once again getting ready to rearrange the furniture.

George V had a world war. In Annapolis, longer sessions arrived, and more money, and more programs, and more legislators with nothing to do except legislate. To the political community, the idea of a session without unlimited bills to vote on came to seem hopelessly anachronistic and perhaps even immoral. If God hadn't wanted legislative action, after all, he wouldn't have created all those unmet needs.

Possibly, if the 1994 General Assembly had nothing to consider this spring except Governor Schaefer's last proposed budget, the budget for 1995 would be getting more attention than it is. But maybe not. A couple of years ago, when the state was supposed to be facing an enormous deficit, the budget was hot stuff. This year it's Tedium City. Few legislators want to spend much time on it, and most are glad they have good excuses not to.

The members of the Assembly are going into an election which is expected to end an unusual number of careers, and so they're twitchy about everything right now. They don't want to cut the proposed budget very much, but they do want to cut it modestly for cosmetic purposes. The best guess is that they'll trim perhaps $140 million, or about 2 percent, from the almost $7 billion Mr. Schaefer has proposed in general-fund spending.

The state is likely to end the 1994 fiscal year this June with a significant surplus, perhaps as much as $300 million. That accomplishment will be cited by legislators on the campaign trail as evidence of their prudent management. And in fact, when Mr. Schaefer's successor takes office next January, the short-term outlook will be reasonably serene.

But the longer-run problem, the so-called ''structural deficit'' that has caused fiscal distress in one state budget year after another, will not have gone away. State aid to education and state medical assistance programs, which account for half the budget, will continue to grow faster than revenues.

The only alternatives are to limit the growth of these programs or tax Marylanders even more to pay for them.

Probably neither of these steps will be taken, and by the time the next governor completes his or her first term, the deficit wolf will be lounging on the State House steps once again.

Tax increases, always the Schaefer administration's remedy of choice, won't be easy for another governor to sell. Marylanders have learned over these last eight years that not only do such increases often fail to bring in the promised dollars, they seriously depress the state's economy and intensify the anti-government mood.

The top 6 percent bracket on the state income tax expires by statute at the end of this calendar year, having effectively done its bit to discourage major new industries from locating in Maryland. Efforts to keep it alive fizzled; with the local surcharge imposed by most counties, it effectively gives Maryland a 9 percent tax rate, one of the highest in the nation and not something many legislators want to defend as they seek re-election.

Depending on how many of the usual suspects survive the 1994 election, there could be a move in the 1995 session to bring back the 6 percent bracket. But there's likely to be more support for a tax-simplification plan like the one pushed by House minority leader Ellen Sauerbrey. Her plan, by eliminating the bottom (2 and 3 percent) brackets on the state income tax, would exempt lower-income taxpayers entirely.

This would have a theoretical cost to the state of something close to $90 million. But just by making the income tax simpler it would produce significant administrative savings. And more to the point, it would leave a lot of money in the pockets of the working poor.

This is by far the most efficient form of financial aid, because those dollars wouldn't have to pass through the sticky hands of the state at all.

That's speculation, though. Exactly how the Annapolis fiscal drama unfolds in 1995 will depend on how history, dressed up as the Maryland electorate, rearranges the furniture this time around.

Peter A. Jay is a writer and farmer. His column appears Sundays and Thursdays.

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