Annapolis, a review

April 14, 2004

WITH THE DUST in Annapolis settled and the session adjourned, this year's report card for Gov. Robert L. Ehrlich Jr. and the Maryland General Assembly demands an overall letter grade and only one is possible: I for Incomplete.

The most important task assigned to these underachievers was solving the state's long-term deficit. They didn't do it. And while on the subject of grades, here's another: F under the heading "Works and plays well with others." Not only did the 90-day debacle end in political gridlock, it concluded with acrimony -- the top leaders are barely on speaking terms.

But neither the frustration of the slots vs. taxes standoff nor the dysfunctional political relationships put the brakes on the wheels of government entirely. Some important proposals were approved, while many others were killed. And, for better or worse, Maryland will have to live with the consequences -- at least until it all happens again next January.

In general, it was a good year for the environment, particularly for efforts to upgrade sewage treatment plants that pollute the Chesapeake Bay. Transportation got its biggest boost in a decade with millions more for roads and mass transit. But it was also a big year for the taxman. Both those initiatives will cost taxpayers plenty, and thanks to Mr. Ehrlich, we'll also be looking at a slew of fee increases. (You know it's been a notable year when a Republican governor takes his biggest bows for how he raised taxes and expanded government.)

The highlights -- and lowlights -- of this year in Annapolis:

Budget and taxes. Approved a $23.6 billion budget that was balanced largely by one-time revenues and transfers, and by reducing aid to local government. The best news: Mr. Ehrlich's proposal to legalize slot machines failed. Unfortunately, so did House Speaker Michael E. Busch's $670 million tax plan raising sales and high-end income taxes and reducing property taxes. As a result, lawmakers are looking at an $800 million deficit in the next fiscal year and no sign that the stalemate will end.

This is the second year in a row that the politicians in Annapolis have failed to address this persistent problem. Under different circumstances, this would require some after-school detention -- or at least a call home to their parents.

Legislators did agree to close the loophole under which certain companies have been able to hide their profits in Delaware holding companies -- and detached from it a proposal to grant amnesty to companies that owe back taxes. The governor still has the option of signing a separate amnesty bill, but we hope he will not.

Education. The biggest victory here may be what didn't happen. Neither the governor nor the legislature chose to abandon the $1.3 billion Thornton plan for education. Mr. Ehrlich effectively decoupled it from slots, promising to fully fund this boost to public education no matter the consequences.

Unfortunately, efforts to finance school construction didn't fare as well. A plan to pay for schools with the money raised by closing a loophole that has allowed limited liability companies to avoid real estate transfer taxes failed.

Economic development. The legislature preserved the tax credit given to developers who renovate historic buildings, but placed some limits on the program. This was an important win for Baltimore, particularly for the continued redevelopment on the city's west side.

Also, lawmakers thwarted a Senate plan to curtail Maryland's bid to bring the nation's first magnetic levitation train to the Baltimore-Washington corridor. As a result, the state will be able to complete a study of the environmental impact of a maglev train.

Juvenile Services. The General Assembly approved a package of bills aimed at reorganizing this troubled agency, an encouraging move designed to reduce the size of detention facilities, expand community outreach and turn over responsibility for educating young offenders to the state Education Department.

Also approved was legislation to ensure that juveniles are represented in court by a lawyer (rather than only when one is requested).

Environment. The "flush tax" demonstrated what Mr. Ehrlich and legislators can do when they actually work together. The landmark legislation will speed the upgrade of sewage treatment plants. Lawmakers also agreed to stiffen enforcement of the critical-areas protections around the bay, and simplified state regulations of farm runoff to eliminate some of that program's more contentious elements.

An Ehrlich proposal to streamline the process for cleaning up and redeveloping polluted industrial sites sailed through the legislature. State officials hope the speedier process will enable them to double the 90 sites Maryland has reclaimed so far through the 7-year-old brownfields program.

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