Bitter budget medicine

September 20, 2002

SINCE MARYLAND'S projected budget deficit has spiked to $1.7 billion during a political campaign, there'll be even more finger-pointing. Gov. Parris N. Glendening, Lt. Gov. Kathleen Kennedy Townsend, the General Assembly - and a sluggish national economy - will be asked to share responsibility.

The blame game, though, will not close the gap. What the state needs are hard-eyed solutions. Some decidedly unpleasant medicine may be in order to bring down the deficit fever. New tax revenue from economic growth would be a soothing elixir, but it seems unlikely to arrive in time.

The candidates for governor this year - Republican Rep. Robert L. Ehrlich Jr. and Ms. Townsend, the Democrat - would be well-advised to acknowledge that the pain of recovery will have to be shared: job cuts, higher taxes and less-generous programs must all be on the table. Better management, while welcome, won't suffice.

Counting both the current fiscal year's estimated shortfall of $414 million and a $1.3 billion gap projected for next year, state government must make spending cuts or revenue increases totaling $1.7 billion.

GOP candidate Ehrlich proposes a series of economies he believes will solve the problem. Ms. Townsend says she, too, would scour the governmental landscape for savings. A spokesman for Mr. Glendening said yesterday that the governor would immediately begin to find ways to deal with the entire $414 million shortfall for this year.

Mr. Ehrlich and Ms. Townsend have promised to avoid tax increases at least during their first year in office, and both have said they would not touch education, health care or public safety. In a statement issued yesterday, Mr. Ehrlich said he would not lay off state workers or reduce state aid to local government.

Other observers suggest neither candidate will be able to sustain a painless policy if the deficit is to be handled effectively.

A special commission established this year by the General Assembly in clear anticipation of the current situation is exploring every option. The Sun urged the Assembly to delay or cancel the last year of a five-year income tax cut, but legislators could not bring themselves to do that in an election year. That cost the budget $177 million.

Having chosen tax relief, the Assembly may now have to consider reducing benefits in programs such as Medicaid. With great fanfare, legislators passed a $1.3 billion enhancement of state aid to education, knowing they did not have all of the money and hearing deficit talk even as they voted on this year's budget.

That decision was a cake-and-eat-it-too political approach that leaves the state in a decidedly precarious financial position.

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