September 08, 2009|By Marta Hummel Mossburg
To listen to Maryland House Speaker Michael Busch, the state is starving. "You're down to bone and gristle now when it comes to state government," the Democrat recently said in response to the $454 million cut from the current budget last month by the Board of Public Works.
The state has burned $736 million worth of flab from the $14 billion 2010 operating budget in the past two months. But the trims do not imperil big government in Maryland. And they resemble a series of bulimic purges more than any systemic dietary changes - meaning more rounds of cuts will be necessary to balance the budget in coming years.
The 200 layoffs included in the decision are only .3 percent of the executive branch work force. By any other standard, that is an incredibly modest trim.
Towson-based Black & Decker laid off 1,200 of its employees earlier this year throughout its operations, about 5 percent of its work force, while M&T Bank laid off over 400 people in Baltimore City and Baltimore County, according to the Department of Labor, Licensing and Regulation (DLLR).
Home Depot's EXPO design stores laid off about 200 in Columbia and Bethesda. Nationally, Starbucks announced earlier this year 6,700 cuts, 4 percent of its work force, and Macy's cut 7,000, 4 percent of its work force. Along with layoffs, many major companies cut benefits and contributions to retirement plans - none of which is happening to state employees.
So to say that the state is balancing the budget "on the backs of state workers and residents," as American Federation of State, County and Municipal Employees Maryland Director Patrick Moran said, is a joke. If anything, the paucity of cuts means that Marylanders in the private sector must shoulder a bigger burden at a time when fewer people are working and contributing to the tax base.
According to the DLLR, Maryland added 1,049 state workers from 2007 to 2008. Local government added 5,697 jobs in the same time period as the state shed 18,503 private sector jobs.
While the layoffs, combined with furloughs for state employees and cuts to state agencies, local aid and higher education will balance the budget this year, they will not fix the underlying $2 billion structural deficit. For that, Gov. Martin O'Malley and state legislators must address entitlement spending in Maryland, which has grown from 16.2 percent of the budget in 2001 to 20.8 percent for the current fiscal year.
The 2009 "90 Day Report" published by the state Department of Legislative services shows that health insurance payments will be $869.6 million in 2010, a 17.4 percent increase from 2009. And teacher retirement spending will jump 22.1 percent to $759.1 million this year. Spending on each of those items is larger than the total amount cut this year.
Senate President Thomas V. Mike Miller and Speaker Busch took a preliminary step to address those issues. They appointed a committee to explore "state, county and municipal fiscal relationships."
Shifting the burden is one way to make local governments more responsible for their spending. Mr. Miller and Mr. Busch should be commended for starting the discussion. But they should also explore cutting state employee benefits, worth on average $24,347 per employee each year. Those benefits far exceed ones offered to Maryland's private sector workers, who also earn less than state and local workers on average.
With an election year ahead, Governor O'Malley and Democratic legislators will likely avoid riling the state teachers' union with proposals to shift or cut benefits. But avoiding the problem only means directing more money to benefits at the expense of students, roads, police and other essential government services.
As state protests over health care reform show, Maryland residents will not always accept government taking their money. And avoidance only ups the possibility for a class war between the haves in government and the have-nots in the private sector asked to pay for benefits they will never receive.
Marta Hummel Mossburg, a Baltimore resident, is a senior fellow with the Maryland Public Policy Institute and a columnist for the Washington Examiner, where this article originally appeared.
