Doomsday cometh

March 31, 2004

THE DISCOMFORT caused by rocks and hard places has been oversold. A lot of elected officials who are supposed to be stuck between the two seem downright sanguine about Maryland's budget crisis. Maybe these politicians are too spineless to notice their stony reality. Looks like we need pointier rocks.

Here's where things stand: Maryland is facing a long-term deficit. The state is committed to far more spending in future years than the current tax structure will finance. Two years of efforts by Gov. Robert L. Ehrlich Jr. and the General Assembly have failed to produce a solution, only fingers in the fiscal dike. They've cut back on spending, raised some fees and the state property tax, dipped into emergency funds, and diverted money from local governments. The fiscal 2005 budget will be balanced, but next year's budget, the one that the governor will have to submit in about nine months, carries a deficit of $800 million to $1.2 billion.

After closing budget shortfalls these last two years without serious damage to state programs, the pain-free solutions are now exhausted. The governor would like to raise revenue with slot machines. House Speaker Michael E. Busch prefers a $670 million tax package. The latter is stuck in the Senate, the former in the House, and most in Annapolis think time will run out and the 90-day session will close on April 12 without either - or both - advancing.

The result? Balancing the next budget will be much harder. The stalemate in Annapolis virtually guarantees that aid to local governments will be slashed. Even if Thornton funding is somehow preserved, that's a disaster for public schoolchildren, particularly those who live in Baltimore and the state's poorer jurisdictions. Counties will be under enormous pressure to reduce their own contributions to schools - or else raise property taxes.

What else might have to be cut? Mr. Ehrlich has yet to reveal his post-session plans, but he might be inclined to take a machete to the budget the General Assembly is supposed to wrap up on Monday - he'll need all the surplus he can muster now for the avalanche of unfunded mandates ahead. Ultimately, real services will have to be reduced. Health care for the poor, local road construction and repair, and teacher retirement benefits are obvious candidates.

So why not wait for next year's doomsday budget and solve the problem then? Because a deferred solution will be more painful. Even if lawmakers find the courage to raise taxes next year, Mr. Busch's proposal won't be as effective a remedy. The state won't be able to bank new sales tax revenue for the coming year and spend it on education over the next two years as the House bill allows. The governor's plan for slots takes years to build up a revenue stream - even supporters must concede slots don't provide much help for the looming deficit.

The governor and legislators know all this, of course. Apparently, they're willing to let the state's financial problems grow perilous rather than do the responsible thing and raise taxes today. That's not leadership, that's politics at its most fainthearted.

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