Budgetary blues

April 01, 2005

THE STATE budget is usually the center of action in Annapolis. This year, it seems more like a minor squabble.

House and Senate conferees have just a few more days to sort out their differences over the state's $26 billion spending plan. And while significant obstacles must be overcome (along with the customary theatrics and weekend meetings), few doubt they'll make their Monday deadline. State government no longer seems to be stuck in a financial crisis.

That's a good thing, right?

Maybe. Maybe not. The problem is, the budget that lawmakers are headed toward approving is another stopgap measure. True, Maryland's fiscal picture is considerably brighter today than it was two years ago. Tax revenue was recently projected to grow $187 million more than expected over the coming year. But this is a budget that still must borrow from Peter to pay Paul. The state's Open Space Program won't be fully funded. Neither will local transportation aid. Over the past three years, hundreds of millions of dollars have been drawn from both. Remember that the next time you hit a pothole or can't find a ballfield for your kids. Oh, and add to your list of complaints all the billions of dollars of public school construction needs (K-12 and higher education) that remain unfunded. That's why Johnny's school roof leaks.

The state's fundamental fiscal problem, the cost of future government obligations vs. inadequate future tax revenue, still exists. This is the infamous structural deficit. The problem is no longer immediate, but it's still there. And in a sense, it's worse. Because the state has limped along with half-measures, cutting a bit and raising fees a bit to make ends meet, the next economic downturn is likely to have a far more draconian effect on the state budget. In other words, we've already raided the kid's college fund and the cookie jar to cover the checking account imbalance. There's not much to tap the next time we're overdrawn.

Politics painted us into this corner. Gov. Robert L. Ehrlich Jr.'s refusal to consider any alternative to expanded gambling opened the paint can. The legislature's inability to counter this provided the finishing touches. Now, there's less incentive than ever for compromise. The only thing the governor and lawmakers can agree on is that they don't want to see a budget crisis next year. They're ready to set aside $400 million or so from this year's budget to cover next year's deficit.

That's not the wrong thing to do, but it's another short-term fix. This year's budget is not something to boast about during anyone's re-election campaign. Certainly, the House proposal to roll back Mr. Ehrlich's property tax increase for one year (and funded for one year only) should be set aside. Tight-fisted legislators are cutting back on Medicaid and taking laptop computers out of state police cars, but preserving the ethically questionable legislative scholarship program. There's also a foolish level of payback (targeted job eliminations and salary cuts to certain senior administration officials) in the budget - another symptom of the stratospheric level of acrimony in Annapolis. It's no coincidence that in this worsening climate, real solutions aren't emerging.

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