The looming train wreck, and the unheard prophet FTC

December 01, 1996|By Barry Rascovar

CASPER TAYLOR must feel like a prophet wandering in the wilderness. Maryland's House speaker clearly sees the crux of the problem confronting this state as it prepares for the end of the century -- and yet no one listens.

There's a train wreck headed Maryland's way -- and yet few politicians want to face up to it. You can't get re-elected governor by telling voters bad news. Legislators know citizens don't like to undergo major changes unless there's a crisis.

So our leaders opt for easy answers that give voters immediate gratification. They call for tax cuts though economic growth here remains fragile and uneven. They take the ''no new taxes'' pledge though this means essential services will suffer some day. They promise to keep cutting government spending when much of the ''fat'' has already been discarded.

For months Mr. Taylor, a potential candidate for governor, has warned this state is headed for a big fall unless leaders stop pandering to the public and address some long-term dilemmas.

Maryland's budget is chronically in the red, thanks to a ''structural deficit'' that no one ever addresses. Tax revenues are out of whack but no one wants to overhaul the system. And our leaders refuse to do anything to prevent the coming transportation gridlock because that would mean higher taxes.

Gov. Parris Glendening is plotting his strategies based on winning re-election in 1998. Thus, his tax-cut plan kicks in just before the election but leaves a whopping deficit in later years. The governor isn't interested in revamping the state's tax code because he can't see any political gain in it before 1998. And Mr. Glendening has promised not to raise transportation taxes -- regardless of the ramifications for key projects -- so he can win a second term.

Meanwhile, legislators happily go along. Other candidates for governor, such as Republican Ellen Sauerbrey, aren't looking to give citizens bad news, either.

But Mr. Taylor has spotted major weaknesses in Maryland's fiscal situation and has urged some sweeping changes.

First, he says you can't cut the income tax without first revamping the entire tax system. Maryland's income-tax rate is too high, its sales tax too narrowly focused.

The answer is rearranging the existing taxes. Lower the income-tax rate by, say, 20 percent, but then broaden the sales tax to include services -- the fastest-growing part of the region's economy.

The overall taxation level would be about what it is now, but the taxes would be more equitably distributed. Individuals and small businesses would pay far less to Annapolis on April 15.

That would send a strong signal about Maryland's ''business climate.'' More important, it would give the state a solid tax foundation for the next few decades.

Second, the state's ''structural deficit'' must be eliminated. Entitlements and local aid gobble up more than half the general-fund budget -- and these categories are growing more rapidly than state revenue. Each time a budget is balanced, the governor and lawmakers patch together a temporary fix and ignore the underlying imbalance. A more honest, long-term solution is needed.

Beltway widening

And third, Mr. Taylor points out what the governor doesn't want to admit: The state's vaunted transportation network has no money to complete critical projects, such as the widening of the Baltimore Beltway. There's no money -- or plans -- for east-west rail lines to White Marsh and Columbia -- though you don't have much of a rapid-rail ''system'' without them.

The transportation trust fund cannot pay for all the essential road and rail and port and airport projects needed. Yet the governor refuses to consider higher transportation fees or taxes, or a new mechanism to pay for these improvements. That could deter economic development in a few years as the traffic situation worsens.

What Mr. Taylor calls for wouldn't be immediately popular with voters. But without a modernized tax system, a budget whose revenues equal spending and a well-funded transportation program that keeps ahead of demand, Maryland's future could be deeply troubled.

The House speaker has sounded the alarm. Will anyone heed his call?

Barry Rascovar is deputy editorial-page editor of The Sun.

Pub Date: 12/01/96

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