Budget crunching

January 22, 2004

GOV. ROBERT L. Ehrlich Jr. unveiled his $23.8 billion spending plan for state government yesterday, and the best that can be said about it is this: It's balanced. It boosts education. And the cuts he's made are not as painful as many had feared.

But the budget's glaring weakness is its failure to address the state's most serious problem - the growing gap between what government plans to spend and how much it receives in revenues. Essentially, Mr. Ehrlich closed a $700 million-plus shortfall to balance his proposed budget. But despite his efforts, the following year's deficit is certain to be worse - perhaps $900 million or more.

It's tempting to shrug off a billion-dollar deficit in a budget 24 times that large, but consider Mr. Ehrlich's actions so far. For all the Republican governor's talk of pulling the reins on spending, his efforts to close the deficit have looked remarkably familiar - he's drawn down surpluses, looked for one-time financial savings (call them accounting tricks), raised taxes (albeit modestly) and trimmed government growth. Politically, it has been a path of moderation and not very different from what his Democratic predecessors have done when faced with similar circumstances.

But after this year, those fixes are gone. No more accounting tricks. No more one-year windfalls are thought to be out there. He can't keep raising income taxes on people who work in Maryland but live out of state (as he plans to do this year). So, how much did this governor choose to cut from his budget? Ironically, according to the Democratically controlled legislature, not enough - his budget is still millions over the General Assembly's spending affordability target.

Mr. Ehrlich believes the answer to the deficit lies in large part with slot machines. We disagree. But leaving aside the merits of state-sponsored slots, it's not a billion-dollar answer anyway. Not to mention the fact that the odds of passage are, even by the administration's estimates, 50-50 at best. House Speaker Michael E. Busch continues to tout a penny increase in the state sales tax as a more sensible solution, but Mr. Ehrlich is adamantly opposed.

One thing is clear about this budget-balancing - the sooner cuts are made (or the sooner taxes are increased), the less painful the process. That's why our leaders in Annapolis can't defer this problem any longer. Mr. Ehrlich's budget is a Band-Aid when what the patient really needs is some serious medical attention. Wait until next year, and it may well be a candidate for life support.

Still, Mr. Ehrlich's first full budget (last year's doesn't count - he had only weeks to adjust his predecessor's work) is not without merit. He didn't take an ax to higher education (as he did last year). He preserved most of the so-called Thornton money, giving a $326 million boost to public education, and even found millions for a pay raise for state employees. That may not be the stuff of campaign commercials, but in the kind of budget crunch that Maryland is going through, it's a start.

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