Flush with cash Glendening's dilemma: Revenue estimates give him $260 million extra to allocate.

December 18, 1997

HERE'S ONE problem Gov. Parris N. Glendening doesn't mind grappling with. After three lean years, in which the governor scrambled to hold down spending, Maryland's chief executive finds himself in Fat City. Now his problem is dealing with all the supplicants seeking some of the state's $260 million estimated surplus.

lTC The Board of Revenue Estimates confirmed on Monday what economists had been proclaiming: Maryland is finally a full participant in the nation's economic surge. Stock market profits, solid job growth and tight labor markets contributed to a projected 6.2 percent growth rate in income-tax collections for the year ending next June 30. That's $204.8 million more than the board estimated in March.

The outlook for fiscal 1999, beginning July 1, also appears sound, but not nearly as dynamic. It should boost general-fund dollars for the next Maryland budget by $218 million.

All this good news leaves Governor Glendening in an enviable position. High on the priority list is school construction. A health-care program for the working poor was unveiled this week. Meanwhile, House leaders are pressing Mr. Glendening to set aside part of the surplus to help pay for an income-tax cut being phased-in over the next five years. They also want him to return to homeowners a portion of the surplus by lowering the state property tax rate.

So far, the governor has wisely avoided big-spending programs that not only would eat up the available surplus in a hurry but would leave him scrambling for funds to pay for these programs in future years. He must hold firm to the principle that a one-time surplus should only be used to pay for one-time expenses.

After all, Maryland's financial fortunes could change rapidly. Back in 1988, during boom times, Gov. William Donald Schaefer wound up with a $227.7 million surplus; three years later, in a tough recession, his excess cash totaled just $53,350. Maryland's current good numbers could change if Wall Street plunges, or the Asian financial flu turns into pneumonia, or consumers become cautious spenders.

Still, Mr. Glendening can afford to be in a giving mood. Maryland is enjoying its best financial health in a decade. There will be plenty of fancy gifts under the governor's fiscal tree. That never hurts in an election year.

Pub Date: 12/18/97

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