Maryland's Finances Are Prudently ManagedWhile...


October 29, 1994

Maryland's Finances Are Prudently Managed

While participating recently in a panel discussion at the Maryland Chamber of Commerce convention, I was challenged to respond to the commonly-held belief that elected officials are poor managers of government sources.

I know this view all too well. It assumes that we are too beholden to interest groups to make sound financial decisions.

The record of elected officials in Maryland proves quite the contrary. We have a long and respected tradition of solid, prudent and conservative fiscal leadership in our state.

Fortunately for our taxpayers, this prudent management is recognized by the three major bond rating agencies. Fitch, Moody's and Standard & Poor's again gave Maryland a Triple-A rating on its most recent $160 million bond offering.

The three agencies give only five states' bonds -- Maryland, Virginia, North Carolina, Missouri and Utah -- a Triple-A rating. The other four states issue very little debt, favoring instead a pay-as-you-go approach to funding capital projects.

A Triple-A rating -- the highest rating a state can attain -- reflects the financial market's confidence in how a state manages its fiscal affairs. Maryland is the only Triple-A-rated state that aggressively pursues bond financing to meet its capital construction needs -- issuing nearly 50 percent more debt per capita than the other four Triple-A states. As a result, we have developed and supported superior facilities and infrastructure and fostered our state's quality of life.

All three rating agencies were very complimentary about our abilities and leadership as elected officials. Moody's commented, "Officials acted responsibly and prudently to correct sizable mid-year financial imbalances resulting from revenue revisions and increased expenditure pressures."

After acknowledging state employee raises that resulted in as much as a 10 percent increase for workers in the lower pay scales and restoration of a portion of welfare grant levels, they went on to say, "The fiscal 1995 budget continues a trend of restrained spending growth in line with relatively conservative revenue estimates."

My colleagues and I take pride in these evaluations, which are based on decisions made by the General Assembly during the past four years. . . .

Thanks to the willingness of many legislators to support decisive, prudent and sometimes unpopular budget actions, Maryland is once again on the road to recovery.

During the past term, the budget was under severe strain for three major reasons.

First, the worst recession in 50 years significantly curtailed growth in tax revenues. Second, demand for state-funded services -- such as education, public safety and welfare -- grew dramatically. Third, inflation for medical services was twice the overall rate of inflation.

These three factors drove up state expenditures at a time when revenues fell far beyond anyone's worst projections.

However, strong, fiscally conservative leadership enabled the state to take the appropriate actions.

The General Assembly adhered to limits established by the Spending Affordability Committee and oversaw the reduction of more than 5,600 state positions -- dropping our national ranking from 18th to 45th in state employees per capita -- and more than $1.2 billion in state expenditures.

Clearly, Maryland's government has been downsized and streamlined in response to the needs and demands of the public.

There are still some problems on the horizon, however. School enrollment, Medicaid enrollment and prison populations are projected to grow through the next 10 years.

This, coupled with continued increases in the cost of medical services, will be the driving force behind increased expenditures -- regardless of who is our next governor.

It now appears that the new governor and the General Assembly will need to make reductions totaling $150 million next session just to maintain control of the budget for fiscal year 1996.

Maryland has established a model for balancing progressive programs that serve the needs of its citizens with prudent budgeting.

We weathered the worst economic downturn in a half-century without disabling government, overburdening taxpayers, or sacrificing our standard of living. As an elected official, I believe we have proven ourselves as good managers worthy of continued support.

Howard P. Rawlings


The writer is a delegate from the 40th District and the chairman of the House Appropriations Committee.

Deceptive Selling of Health Care Reform

Jonathan Paul Yates' opinion piece, "Overreaching Killed the Health Bill" (Oct. 18), summarized why the Clinton health care plan failed. But it overlooked what many think also was another major reason for the bill's demise -- the way the bill was prepared and sold to the electorate.

I am one of the few who read and tried to understand the 1,352-page monster. Most members of Congress did not.

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