Delaying tactics

January 21, 2007

Within hours of taking office, Gov. Martin O'Malley accomplished a bit of fiscal legerdemain: He tied his own hands with the budget. The $30 billion spending plan Mr. O'Malley submitted to the General Assembly last week fulfills a number of his campaign promises and (no doubt much to the disappointment of his political opponents) it doesn't raise taxes. Ta-dah. But it also doesn't do much to cure Maryland's most pressing problem: the long-term state budget deficit.

How could it? Saddled with mandated new spending - chiefly, a $683 million increase in K-12 education aid required by the Thornton plan - Mr. O'Malley's options were few. The budget is balanced on a $1 billion withdrawal from the state's rainy day account. That's hardly a surprise. His predecessor's budget planning anticipated a similar approach this year. But it's not an entirely happy development: It simply means the day of reckoning for the state's finances has been postponed for 12 months.

Mr. O'Malley has a respectable argument for why he has chosen this path. His spending priorities - including $400 million for school construction, a fully funded Program Open Space, a freeze on University System of Maryland tuition in the coming year, and an increase in grants for stem cell research - are supported by a majority of voters. It's why he was elected. And taxes? He insists that he can't ask the public to pay more for state government until he has exhausted the alternative - eliminating waste, inefficiencies and other unnecessary spending.

Fair enough. But no matter how sharp the pencils of Mr. O'Malley's bean counters, they aren't likely to come up with $1.3 billion. That's the size of the projected gap between spending and tax revenue in the 2009 budget that he and the legislature will have to approve next year. That's not easily bridged without new taxes, because the majority of the state budget goes to education and health care, and the public won't (and probably shouldn't) countenance dramatic reductions to either.

Even balancing the 2008 budget required a bit of creative accounting - delaying a $53 million payment toward Montgomery County's Intercounty Connector, for instance - because of a $400 million revenue shortfall.

The public needs to understand this reality. The Thornton plan dramatically increased education spending without providing the means to pay for it. That piper must be paid. Voters deserve straight talk. Mr. O'Malley's claim of 2.5 percent budget growth (in reality, it's closer to 5.5 percent) aside, he has shown a willingness to face reality - at least by this time next year. Maybe.

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