Doing the right thing

April 28, 2004

THERE ARE TIMES when Gov. Robert L. Ehrlich Jr. plays the boy who cried wolf. Policy disputes are always politically motivated. Democrats just want to embarrass him. Much of the time, he's wrong -- a victim of the bunker mentality that so often pervades the State House's second floor. But once in a while he's correct -- and his opponents are hoping the rest of us won't notice.

Such is the case with two controversial pieces of legislation sitting on his desk. One is the so-called living-wage law that would require state contractors to pay certain workers at least $10.50 per hour. The other is the proposed three-year 5 percent cap on tuition increases within the University System of Maryland. The bill would also guarantee about $100 million more in state funding for the system.

Both proposals passed the General Assembly in the final hours of the 2004 session, and at first glance they are quite attractive ideas. The living wage might be one of the most effective and humane strategies available for helping the working poor -- and decreasing their dependence on government-financed programs such as food stamps and Medicaid. Montgomery and Prince George's counties and Baltimore City already have living-wage laws. Meanwhile, the university system has seen its budget cut by 14 percent over the past two years. That's sparked a 30 percent increase in tuition, a hard hit on middle-class families and one of the hidden taxes of the Ehrlich administration.

But here's the rub. Neither measure is fiscally responsible -- and the Democrats know it. They never would have passed the bills if the governor were a member of their party. Mr. Ehrlich has promised to veto both, and that's perfectly fine with his opponents. A living-wage veto would outrage unions, energizing a traditional Democratic base. Kill the tuition cap (in order to spare big business a modest and temporary increase in the corporation tax from 7 percent to 7.7 percent) and he'll be painted as favoring corporate profits over middle-income families.

Mr. Ehrlich has no choice. The legislature's own budget analysts figure the living-wage bill would raise the state's cost of doing business by $5 million to $10 million a year. No other state has such a rule, and the timing could hardly be worse. The state is still facing an $830 million deficit next year.

The tuition cap has a similar problem. The corporate tax covers only 60 percent of its cost. The rest must come from the state's general fund. This isn't the time to tie up state spending with mandates -- no matter how laudable. Is keeping down tuition more important than some of the potential budget cuts looming ahead (cutting payments to nursing homes or for local law enforcement, for instance)?

The best way to thwart this Democratic trap is to veto the bills but not abandon their constituencies. Mr. Ehrlich needs to find some taxes he can support and finally solve his long-term budget crisis. (One suggestion, governor: Go for the same corporate tax increase you're about to veto but direct the proceeds to the general fund. It'll show you're not a captive of fat-cat donors.)

With future budgets in balance, he wouldn't have to slash higher education; he'd be able to invest in it. And if Mr. Ehrlich can show that kind of leadership, why would voters elect a Democrat in 2006?

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