Trouble lies ahead - big time

March 17, 2002|By C. Fraser Smith

GHOSTS OF campaigns past hover over this year's nervously political legislative session.

In 1984, Democratic presidential candidate Walter F. Mondale told the nation he would raise taxes. His honesty, he seemed to think, would score points with voters who hate being lied to. He lost to Ronald Reagan big time.

In 1986, gubernatorial candidate Stephen H. Sachs proposed raising the sales tax in Maryland to pay for a better education system. He lost to William Donald Schaefer big time.

In 1988, George H.W. Bush said, "Read my lips: No new taxes." Then, after he was elected, he signed on to what he thought was a necessary tax increase, hoping voters would not punish him. He lost to Bill Clinton in 1992 big time.

In each case, one could argue, all three would have lost even if they hadn't embraced higher taxes.

But in Annapolis this year, Democrats have chosen to run as if taxes alone can defeat them. Run they must, of course, since this is an election year. In some suburban and rural districts, Republicans and anti-tax sentiment are strong enough to threaten them.

So, rather than reneging on a five-year, 10 percent cut in the income tax, they are making painful budget cuts to important Democratic programs they enacted.

Gov. Parris N. Glendening has urged - and continues to urge - a different course. Delay the final year, he says. Use the $177 million that phase would cost to support the initiatives you fought for: medical care, education, the environment. It's only about $75 per taxpayer, after all.

The Assembly leadership says no. It suspects the motives of a governor who has managed to outflank them time after time in the interplay between executive and lawmaker. Last year, for example, Mr. Glendening overrode spending constraints with the Assembly's compliance - and left a deeper budget hole to fill in the midst of a recession (however mild and short it may be or have been.)

So the cutting proceeds even as legislators look ahead to a tax increase. Consider this: To implement an education equalization plan proposed by the Thornton Commission, Maryland must put its hands on another $1 billion each year. In addition to that expense, transportation needs have been deferred, and the cost of medical care for the poor and uninsured continue to rise.

So, taxpayers, you may very well be reading of tax increase proposals quite soon. Economic recovery will reduce that likelihood only marginally. Recovery revenue already has been cranked into budget-making calculations, and the out year deficits remain.

Some of the more prudent and realistic leaders in the Assembly see this year's goal in stark terms: keep built-in spending to a manageable minimum so that meeting the aforementioned needs won't be blocked by deficits. As matters stand, the deficit looming in the next budget will be in the range of $600 million to $1 billion.

One legislator argues oddly enough that completing the five-year income tax cut is a necessary step toward the new tax-increase reality. Studies suggest, according to this view, that the income tax was the one Maryland levy that may have been too high. Further, it is a tax paid by enough corporations that lowering it can be seen as an economic development move.

So that means the 5 percent sales tax may have to be raised and its base broadened: More things will be taxed and at a higher rate. This prospect rests on the proposition that Maryland's sales tax is lower and narrower than those of many other states.

Look, then, for new taxes, and soon.

Also, slots.

Plenty of pressure exists already to bring slot machines to Maryland racetracks - or to some other venues. This option will be considered over the next few months as candidates for governor lay out their positions. Prospective candidates have begun to declare themselves on that issue.

Lt. Gov. Kathleen Kennedy Townsend says she's against. Her team reportedly has a poll showing Marylanders would accept a delay of this year's tax cut if the money were spent on education and other important government services. Whether that means she'd risk tax increases remains to be seen.

Republican Robert L. Ehrlich, who is expected to announce his candidacy for governor soon, says he's in favor of slots.

Other candidates, if there are any, will give their views on slots - and taxes - as the year progresses.

No one will issue an updated version of the "Read my lips" challenge. It was a little reckless even then.

What we ought to demand, though, is a clear-headed analysis of the state's financial condition, of Maryland's legitimate needs and of each candidate's ideas about making government leaner and more efficient.

So the most important bill of the 2002 legislative session, after the budget bill, is House Bill 1, which calls for a study of needs and resources. It's likely that a safer proposal for candidates to make in the next few months will be "Read the study."

And hang onto your $75. When the state puts its arm on you next year you'll need it.

C. Fraser Smith is an editorial writer for The Sun.

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