Deficits await new governor CAMPAIGN 1994 -- THE RACE FOR GOVERNOR

June 19, 1994|By John W. Frece | John W. Frece,Sun Staff Writer

Maryland's next governor will inherit a state budget that will quickly fall $300 million into the red unless someone fixes a fundamental imbalance between revenues and spending.

But the seven men and women who are fighting for the job are saying little about how they would do that.

All seven -- Republicans Ellen R. Sauerbrey, Helen Delich Bentley and William S. Shepard, and Democrats Melvin A. Steinberg, Mary H. Boergers, Parris N. Glendening and American Joe Miedusiewski -- say they have no intention of raising taxes and would do so only as a last resort.

And nearly all of them talk about how they would increase revenues by improving the state's business climate and creating jobs, and save money by "downsizing" government and eliminating waste and duplication.

But no one has presented a detailed plan for solving the problem -- a plan with specific projections for economic growth or the elimination of enough government services to yield the necessary savings.

The cause of the deficit is easy enough to explain: The state is committed to spending more money than it is likely to take in.

Over the next six years, budget advisers to the General Assembly say, state revenues will grow about 4 percent a year. But the cost of government will increase by about 6 percent a year, largely because of requirements imposed by state and federal lawmakers over the years.

The result: a budget shortfall estimated at nearly $170 million in the new governor's first year in office that will rise to $300 million a year through the end of the decade.

In the language of budget-makers, the problem is a "structural deficit."

It is caused by the growing population of schoolchildren, which drives up the cost of enrollment-driven school aid programs; by relentless increases in required spending on medical assistance for the poor and disabled; and by higher prison costs, created in part by tough new lock-them-up laws that will put more people than ever behind bars.

It also is fueled by inflationary health care costs, by college and university expenses that cannot be covered indefinitely by raising tuition, and by assumptions that the state will resume its practice of increasing welfare grants each year and giving state workers cost-of-living raises.

Maryland's Constitution requires the governor to submit a balanced budget, so the next chief executive cannot ignore the deficit problem.

But for candidates seeking the job, avoidance seems to be the rule, not the exception. Conventional political wisdom says it is safer to be vague than to antagonize one interest group or another.

When pressed to say what they would do, the candidates' answers have been all over the lot. They range from oddly microscopic (such an idea by state Senator Miedusiewski of Baltimore to hire bilingual economic development officials to save on the cost of interpreters overseas) to extremely vague (such as the assertion by a spokesman for Mrs. Bentley that "streamlining government is where it's at.")

"Mrs. Bentley believes in less ponderous, more efficacious ways of delivering goods to the citizens," said press secretary Key Kidder. "That is not the entire answer, clearly . . . but she is not prepared to say more than that today."

Serious problems

The deficit projections do not take into account spending programs a new governor might want to initiate in a state budget that now stands at roughly $13 billion. Nor do they reflect a variety of other serious budgetary problems, such as a $111 million unfunded liability in the workers' compensation program and a $47 million debt to Blue Cross and Blue Shield of Maryland, to name just two.

And all of this comes against the background of an economy that is only slowing recovering from the recent recession.

The candidate who appears to have given the deficit issue the most thought is Mrs. Sauerbrey, a delegate from northern Baltimore County who, as House minority leader, has spent the past several years fighting spending programs pushed by Gov. William Donald Schaefer and the Democratic-controlled legislature.

Yet even her proposals to abolish about 400 funded but unfilled state jobs, freeze other vacancies, cut her own salary and sell the state yacht won't by themselves eliminate a deficit of $300 million a year.

Mr. Shepard, a retired foreign service officer from Montgomery County who was the GOP nominee in 1990, said that because the deficit is a structural problem, it will require a slow and deliberate structural solution: a three-year review in which all state programs will be "reprioritized."

Mrs. Bentley, the third Republican in the race, said she would persuade legislators to cut programs they or their predecessors have mandated by law. She also vowed to sue the federal government for mandating programs without giving states the money to implement them.

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