Decision time in Annapolis

September 24, 2004

GOV. ROBERT L. Ehrlich Jr. is allegedly unhappy that somebody at the state Department of Health and Mental Hygiene leaked a memo detailing how that agency might (and we emphasize might) trim $480 million from next year's budget. Why? Probably because these cuts are so outrageous, not only because of the harm they'd inflict on children and pregnant women but also because of how little actual savings they'd generate. Cut mental health services for the poor and society will pay for it elsewhere -- in hospital emergency rooms or in the criminal justice system. The cost is only shifted.

Mr. Ehrlich and his budget secretary, James C. "Chip" DiPaula Jr., asked agency heads to find ways to reduce their budgets by 12 percent.

That's not an unreasonable exercise in fiscal planning -- if pursued in a reasonable fashion. But it's clear that in certain areas of government, cuts of this magnitude inflict real harm and are not tenable. The health secretary simply doesn't have that many nonmandated programs to cut.

Ironically, news of these potentially calamitous cuts comes as the tax revenue picture is getting better, not worse. Revised estimates suggest the state will rake in about a quarter-billion dollars more than expected over the next 9 months. That's great, but getting too elated over these numbers would be just as big a mistake as getting too angry over potential cuts. Maryland's big problem is structural: The state's spending continues to outpace revenues. Improvements in the economy only delay the inevitable crisis.

What's a governor to do? Step one is for Mr. Ehrlich to overcome his affinity for slot machines as fiscal policy. He has more or less said he has. House Democrats were willing to put the idea to voters, but the governor refused. The truth is, he couldn't deliver enough House Republican votes. And there was an undeniable serendipity at work: He was spared from a potential self-inflicted policy disaster yet still looks like a beleaguered taxpayer's best friend.

That's good, because Mr. Ehrlich will need all the political popularity he can muster for the challenge ahead. Taxpayers need to hear more about potential budget cuts, and the governor can't hide from the bad news forever. The health department is surely not the only agency poised to take it on the chin. Maryland residents must be made to understand what's at stake in this budget debacle -- not the least of which is the potential unraveling of the social contract.

Finally, the hour is drawing near for Mr. Ehrlich to face facts: Maryland needs to take its budget medicine sooner rather than later. This administration has made the easy cuts, raised some fees and drawn down surpluses. It's time for fewer short-term fixes and more long-term solutions. That means higher taxes. Other Republican governors have raised them; Mr. Ehrlich can, too. Voters will accept a tax increase -- if they understand the consequences of not raising them. And to do that, the governor would be wise to start leaking all the memos he can find.

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