Governor gambles with state's future

Risky budget: General Assembly must make adjustments to get Maryland on a prudent course.

January 17, 2002

GOV. PARRIS N. Glendening presented his $22.2 billion budget this week with understandable elation -- as if he'd dodged a freight train of dire financial prospects.

While many of his spending priorities make good sense, Mr. Glendening's proposal needs the closest possible scrutiny by a General Assembly keen to avoid huge problems after Mr. Glendening leaves office at the end of this year.

It's an election year budget, to be sure, asserting many accomplishments and acting to pay for them. But the state must be able to afford the programs it wants -- and voters should react with outrage at the polls if its leaders cannot discipline themselves.

Some of the state's current financial problems result from expansion of health care benefits that have rocketed beyond all estimates. Huge sums are poured into the Medicaid program this year, for example, to cover the cost of making more Marylanders eligible for that help. The governor is right to say government must step up in times of economic distress -- but obviously it can't sacrifice its own fiscal health or the entire structure will collapse.

With a string of clever maneuvers that now must be analyzed, Mr. Glendening has balanced his administration's last budget in a way that leaves the train of fiscal catastrophe on the tracks -- with greater momentum.

To balance spending and revenues, he grabbed every free penny, shaking nickels, dimes and quarters from every piggy bank in state government.

With no election to face himself, the governor reached more deeply into taxpayers' pockets, taking back a promised 2 percent income tax reduction. Republicans are right to call that action a tax increase. Mr. Glendening seems to have signaled his own concerns about the future when he suggested to Assembly leaders that they might want to end the tax relief at 8 percent by simply canceling it.

The final payment on his once-sacrosanct five-year, 10 percent commitment would have cost $175 million, a sum the governor uses instead for programs he wants. Any future Assembly or governor that wanted to reinstate the cut would have to find $175 million.

The governor also decided not to put $60 million additional dollars into the state employee and teacher pension system, perhaps the first time a Maryland governor has set aside such a recommendation. Pension managers say that much additional money was needed to account for stock market losses. The governor defends his decision, observing that the fund is 98 percent paid up and 18 years ahead of a schedule that would have it fully funded by the year 2020. The prudence of this action will be debated, we hope, with the help of pension experts.

He has taken $70 million out of the program that insures high-risk drivers -- which some legislators fear could result in a surcharge on everyone to keep the system intact, a hidden tax of sorts.

Quite properly, the governor has used money set aside for one-time construction needs as cash for plugging budget holes, turning to the bond market to pay for projects covered initially by the surplus. Republicans call this approach unfettered taxing, spending and borrowing -- though the borrowing would be within boundaries set by the Assembly and some of the projects on college campuses are needed to accommodate a wave of new students.

Maryland's financial condition now, though better than many states', still demands sacrifice from its citizens. Delaying the tax cut, for example, seems prudent in a year when recession and terrorism have knocked a hole in revenues.

Democratic Assembly leaders will push for ways to cut the governor's budget so their members don't have to explain why they went back on a promise to taxpayers. Some legislators want to cut the budget enough to pay for the first year of a new education spending program.

If the money is to be spent, we'd favor directing it to public education.

Mr. Glendening says good stewardship allowed him to balance his budget in the worst economic times of his tenure. But had he been more prudent last year, when he spent beyond limits set by the General Assembly, his budget-making task might have been easier this year -- and he might have left a brighter picture for his successor.

Fiscal experts had projected deep deficits for the current fiscal year and next of up to $1.7 billion. Mr. Glendening scoffed at those estimates, just as he dismissed concerns about his spending last year. The state's strong economy, he suggests, will bail us out after he's gone.

Everyone hopes he's right. In the meantime, the General Assembly must try to reshape and reduce the budget in a way that recognizes economic recovery cannot be assumed any more confidently and safely than continued world peace.

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