EVERY STATE in the union is facing difficult, if not disastrous, financial problems. But one of them, Alabama, has chosen to use the emergency as an opportunity.
Other states, including Maryland, should pay close attention.
Alabama Republican Gov. Bob Riley, at least as conservative as Maryland Gov. Robert L. Ehrlich Jr., has done more than raise income and property taxes. He's reformed a blatantly unfair system, relieving the poor of an unfair burden and assessing wealthy interests their fair share of the burden. Governor Riley convinced the Democratic-controlled Alabama legislature that this was the time to act, and his $1.2 billion tax reform package goes to the voters this September.
His plan would erase a $675 million budget deficit, provide funding for new education initiatives and require a new level of accountability from government. It also radically alters one of the most anti-poor and anti-middle-class tax structures in the nation.
What we have here is fairness and common sense winning big over politics. Governor Riley says he had three choices: make horrendous cuts in programs, most of which support poor Alabamians; raise taxes enough to balance the budget; or institute reforms that would produce revenue sufficient to sustain state government into the future. He chose option three.
Few governors have been so bold or wise. Many have raised taxes or fees, but grudgingly and only at the margins. Governors worry that tax increases are both inevitable and politically fatal.
Moreover, states can't expect much help from the Bush administration. The president has indicated they are mostly on their own.
All the more reason to examine what happened in Alabama. Many states' tax systems, including Maryland's, are similarly out of date. They were built when manufacturing predominated, but the economy has changed. A rising economic tide doesn't necessarily produce enough revenue.
Maryland's spending and taxation need to be examined carefully so that government ends up leaner but not meaner. The tax system should be capable of sustaining the services voters want.
If a poor state such as Alabama can do it, Maryland can, too. There isn't a more important task - or one more likely to make Mr. Ehrlich's tenure a productive one. Let's hope he gets on the phone to Bob Riley real soon.