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Incredible Shrinking Economy

Our View: Suddenly, It's A $2 Billion State Budget Deficit, And Fixes Aren't Good

September 21, 2009

Even aid to K-12 public schools, as high a priority as that's been for the state in recent years, can't be held exempt - not at a time when state-funded kidney dialysis, mental health services and programs for the developmentally disabled are potentially on the chopping block, too.

Lawmakers should also rethink their conventional wisdom of no tax increases in an election year. Will voters be angrier next fall at the thought of disabled loved ones losing services, or at updating the state's absurdly low tax on alcohol that's based on 1960s- and '70s-era prices? Would a one-year extension on the state's millionaire tax cause more uproar than local aid cuts that devastate libraries and after-school programs?

If Mr. O'Malley is feeling a little queasy right now, that's understandable. It's not swine flu but the discomfort brought by getting squeezed between a rock and a hard place. If it's any consolation, economists will no doubt underestimate the rise of tax revenue when the recovery belatedly manifests itself. Until then, there simply aren't many good budget-balancing choices left.

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