Balancing act

January 20, 2003

IN HIS FIRST crack at eliminating Maryland's $1.8 billion budget deficit, Gov. Robert L. Ehrlich Jr. is betting heavily on getting slot machine gambling approved by the General Assembly.

That's a mistake, even if the legislature gives him a row of cherries.

Mr. Ehrlich's proposed 2003 budget, announced Friday, calls for increased spending: Aid to K-12 education, juvenile corrections and medical care all grow. Those are certainly worthy priorities.

The budget appears to keep all the new governor's campaign commitments: no new or increased taxes, no state employee layoffs, no cuts in education or public safety spending and no reductions in aid to Maryland counties.

Local aid for highways was cut by $102 million, but county officials feared even deeper cuts.

It sounds too good to be true, and it is.

To pay for the new spending - even as he addresses the deficit - Mr. Ehrlich proposes savings of $433 million in the cost of government. This would result from leaving almost 1,000 currently vacant state jobs unfilled and by cutting millions from an array of programs ranging from higher education to the second phase of the state's new voting system.

He would also borrow $300 million over two years from the transportation trust fund and $75 million from the Injured Workers Insurance Fund. Both of these measures only push the state's structural problem a little further into the future. Eventually both funds will have to be repaid.

Mr. Ehrlich concedes that the state's projected highway and transportation needs vastly exceed available money. If the borrowing goes forward, the need is even greater. By the same token, more workers covered by the state's self-insurance program will be injured - and they'll have to be compensated.

A fair and reasonable sales or income tax increase would have been a far better way to address these problems. And, given projected revenue shortfalls extending for many years, Mr. Ehrlich should be offering taxpayers the hard truths. Instead, he's offered temporary fixes - and the threat of a tawdry new culture generated by slots.

Even this stopgap budget rides on the hope that legislators will go along with more gambling. If they don't, Mr. Ehrlich said again last week, he'll look for more spending cuts. He repeated his "no new taxes" promise. He would not consider even a gas tax increase until next year, he said - since a war with Iraq might increase the cost of oil.

State fiscal experts, who have warned against a continuing imbalance between government spending and tax revenue, gave the new governor's first budget a "B." More cuts might have been made, they suggested, but against the record of recent years in which the spending-revenue imbalance was essentially ignored, they saw progress.

The budget is balanced ultimately with $350 million in new revenue from selling slot machine licenses to the owners of Maryland racetracks; $45 million would come from the first returns these machines would produce.

But the real bottom line is that gambling - the lure of free money - should not be used to relieve the state's citizens of their fiscal responsibilities.

Mr. Ehrlich should reconsider. The General Assembly should reject slots and offer an alternative.

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