Upbeat report on state economy adopted

Board sees higher tax revenues, income growth, low unemployment

Schaefer still unhappy


The state Board of Revenue Estimates adopted a rosy report about Maryland's economy and finances yesterday, predicting healthy income growth, low unemployment and swelling tax coffers for the immediate future.

General fund revenues for the fiscal year ending June 30 will be about $12.2 billion, the board said, or about $776.5 million more than estimated.

But the board's chairman, Comptroller William Donald Schaefer, who voted against adopting the report, couldn't have been more unhappy.

The blithe view of the economy belies widespread poverty, poor student performance in Baltimore and the rising costs of health care and prescription drugs, he said, adding that Gov. Robert L. Ehrlich Jr. needs to seek information from outside of his inner circle to learn what's going on in the state.

"I don't approve," he said of the revenue numbers, which predict state general fund revenues will grow 7.1 percent this year and 5.2 percent next year.

"I don't like that optimistic view. We've got to look more at the people who are poor."

He turned to Ehrlich, who sat in on the meeting in the ornate reception room of the State House. "You've been a great governor," Schaefer said. "You've had compassion. But there's more to be done for poor people. More.

"I'm sending you out a clear call. I would say you're riding high now, but you've got a lot of things in the background. You'll be here five more years, but sometime in that five years, you'll have hell to pay," he added, evidently assuming that the governor will be re-elected next year.

Ehrlich agreed that Baltimore - which is run by one of his Democratic rivals in next year's election, Mayor Martin O'Malley - is in poor shape.

"Test scores are up ... everywhere in the state except for one major subdivision," said Ehrlich, who emphasized that he was not "singling out any particular person."

"The state is spending a lot of money in that city on social services, on education," Ehrlich said. "We're not getting our money's worth. You know it, I know it."

Maryland School Assessment tests show that city schools lag behind those in other jurisdictions, but pupils have posted improved scores in reading and math in grades 3, 4, 5 and 6 in recent years. Middle and high school students have improved in some subjects and worsened in others.

O'Malley spokesman Steve Kearney said the governor's criticism is baseless.

"The governor is free to run for re-election against the people of Baltimore, but facts are stubborn things," Kearney said. "Crime is down, test scores are up, and he runs the Department of Social Services."

After Ehrlich left the revenue estimates meeting, Schaefer said the governor needs to work to get outside of the bubble created by his job and talk to people outside of his inner circle and see what's going on in the streets.

"Is he bringing in some new blood once in a while?" Schaefer said. "Is he bringing in people with brains, other than the people he's already got?"


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