More Budget Blues

Our View: The Latest State Budget Cuts May Be The Most Difficult Yet, But The Economic Outlook Is Gloomy Enough To Wonder: Is It Enough?

August 26, 2009

Perhaps the most troubling aspect of the $454 million in state budget cuts expected to be approved today by the Board of Public Works is the strong possibility that a similar situation will arise again in a matter of months as tax revenue estimates continue to drop. While the impact of the economic recession on Maryland's state government may not be quite as overwhelming as it's been in Sacramento and Albany, the worst may not yet have hit Annapolis.

Gov. Martin O'Malley said yesterday that the budget reductions are designed to preserve his administration's priorities as best as possible until a recovery takes hold. Most of the savings will come out of the hides of state agencies and by lopping off nearly one-quarter of aid to local governments.

That may be a sound approach. Certainly, preserving K-12 public education funding ought to be the highest priority, and Mr. O'Malley appears to have accomplished this - at least for now and assuming local aid cuts don't lead to reductions at the county level.

But it's also clear that the current administration is doing little more than putting fingers in the dike. The governor's own budget secretary acknowledges that next fiscal year's budget is at least another $1 billion in the red. Some of the cuts to be approved today will probably help that situation; many will not.

More than 200 people will lose their jobs thanks to these reductions, and all state employees will see smaller paychecks. Some may lose as many as 15 days of pay this calendar year. That's a lot, considering many counties have yet to issue a single furlough to their civil servants.

Average Maryland residents may not notice much of this, at least not immediately. Road projects are likely to be delayed and pot holes not fixed. Health programs will be scaled back, and fewer police will be on the payroll. Considering the state's general fund spending is about to fall to three-year-old levels for the first time in more than three decades, that's a remarkably modest impact.

How is this possible? Obviously, part of it is that Maryland was better positioned than most states for the economic downturn, and President Barack Obama's stimulus aid has been helpful in reducing the shock of falling tax revenue on governments generally.

But it's also because Mr. O'Malley has chosen to defer some of the hard choices. Is he minimizing the pain because it's in the interests of the state or because he fears what deeper cuts or raising taxes could lead to - voter unrest and a return face-off with former Gov. Robert L. Ehrlich Jr. next fall?

We cannot forecast the future. But we have learned enough hard economic lessons to know that facing budget realities sooner rather than later is almost always preferable. If there is a problem with these budget cuts - as painful as they may be - it's that they don't go far enough toward solving the long-term imbalance.

Mr. O'Malley didn't cause his budget problems. His willingness to raise taxes, chiefly the state's sales tax, is one of the factors that's kept the situation from being far worse than it already is. If he truly believes, as we do, that voters support elected leaders willing to make the hard decisions, then it's time more of them were made.

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