Paying the piper

January 24, 2003

DEMOCRATS BEAR considerable responsibility for Maryland's $1.8 billion budget deficit, so it's appropriate for them to propose realistic deficit-reduction plans - a higher sales tax, for example.

Gov. Robert L. Ehrlich Jr.'s slot machine proposal won't produce enough revenue to solve the problem - even if the General Assembly were to approve it, which is by no means a certainty. A more rational approach would be to carefully study all options and raise taxes. Without that straightforward approach, important programs will suffer and uncertainty will damage momentum in important areas.

Democrats presided over state income tax cuts totaling $800 million a year, hoping to head off the attack of Republicans who were gaining ground politically with tax-cut promises. At the same time, the Assembly's majority Democrats pushed through a necessary but expensive education aid package.

So now they are proposing to raise the sales tax from 5 percent to 6 percent, increasing a levy that has not gone up in 26 years. Additional proposals would apply the sales tax to various consumer services and business transactions - and prudently so.

The sales tax option is among several the Assembly - and governor - must consider. An income tax surcharge on the wealthiest Marylanders, used to good effect in the early 1990s, should be on the table as well.

Governor Ehrlich has quite properly promised to treat every dollar as precious. But relying on slot machines, as his proposed budget does, misses an opportunity: What better time to modernize the tax structure?

Without sufficient revenue, important state programs will be in jeopardy. The current shortfall will be magnified year after year, for example, as the state meets its promise to increase aid to public education. That commitment, increased last year in response to recommendations from the Thornton Commission, grows until it reaches $1.3 billion per year by 2007.

The costs of other government services are rising, too: Marylanders are living longer, and many of them are cared for in state facilities.

Higher education funding has been reduced by $66 million at a time when the state's universities are gaining new stature. To avoid laying off faculty and other staff, tuition will be raised by 5 percent. Has commitment to higher education ended?

Mr. Ehrlich has promised not to raise taxes or add new ones, and to veto any such measures if the Assembly passes them. That's a mistake. The state's lawmakers as well as the governor have a responsibility to the residents of Maryland - and it's not one that should be based on slot machines.

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