State Revenues

In another burst of good economic news for Maryland, officials said yesterday the state closed out the fiscal year in June with an unexpectedly high budget surplus of more than $319 million.Coming on top of estimates in March that state revenues were $274 million higher than expected -- money that was appropriated in the state budget for the current year -- the new figures mean the state collected $593 million more than anticipated during the 12 months that ended June 30.The figures prompted renewed discussion of tax cuts yesterday and might hamper an expected move in the next legislative session to increase the gasoline tax to pay for road and other transportation projects.

State senators to begin debate on abortion banThe Senate Judicial Proceedings Committee approved a ban on so-called "partial-birth abortions" yesterday, sending the bill to what is expected to be an emotional battle on the Senate floor.Similar legislation passed the same committee last year, but was narrowly defeated in the full Senate. This year, after an election in which three moderate senators were ousted in part because of their votes against the abortion ban, the bill is expected to have a better chance of passage.

Maryland's fiscal picture remains remarkably rosy as state revenues continue to significantly outpace projections made only three months ago, officials said yesterday.During the fiscal year that ends June 30, the state has taken in almost $90 million more than had been projected as recently as March.In all, thanks to Maryland's robust economy, state revenues are expected to be about $450 million higher than projected a year ago for the current fiscal year.Much of the newest revenue surge is because of higher-than-expected income tax collections -- much of it on capital gains, said a spokesman for state Comptroller Louis L. Goldstein.

NEW YORK -- At 6 o'clock most mornings I walk over to a candy store on 57th Street to buy an armload of newspapers. That is my addiction. To each his own.Usually I have to squeeze my $3 through a couple or a half-dozen men and women clustered around the colorful tickets and come-ons of the state's Lotto games. It's like ''Guys and Dolls'' without music around here. The scene triggers the puritan within me. My feelings are, I hope, more than the lingering fear that someone might have a good time.

WHEN STATE legislators choose a new treasurer this week, they should pick someone with the right kind of background and temperament. The last two treasurers, Lucille D. Maurer and William S. James, were pragmatic and cautious members of the Board of Public Works, but they initially lacked any understanding of how to invest billions of dollars in state revenues -- a key part of the treasurer's job.This time, lawmakers need not worry about that shortcoming....

State bean-counters across America are brimming with confidence these days, as well they should. Their treasuries are chock full of tax revenue. Many of the spending cuts forced by the recession have been kept in place. A national survey shows that cash reserves, on average, are 64 percent higher than had been predicted a year ago.Still, many state officials are wary. The drive in Congress and the White House to finally get serious about the federal budget deficit could have a heavy -- and negative -- affect on the states.

The late Walter Lippmann, the sage of American political journalism, once observed that great leaders share two principal traits: something he called ''second sight,'' which he defined as an uncommon instinct to spot what would be enduringly important to move a state or nation forward; and the articulateness to persuade others that doing those critical things was right and necessary.Only the combination of the two special skills, he said, produced strong leaders of daring and determination, able to guide the crowds to higher paths that met their needs.

Maryland's next governor will inherit a state budget that will quickly fall $300 million into the red unless someone fixes a fundamental imbalance between revenues and spending.But the seven men and women who are fighting for the job are saying little about how they would do that.All seven -- Republicans Ellen R. Sauerbrey, Helen Delich Bentley and William S. Shepard, and Democrats Melvin A. Steinberg, Mary H. Boergers, Parris N. Glendening and American Joe Miedusiewski -- say they have no intention of raising taxes and would do so only as a last resort.

Weary state legislators convene their annual, 90-day legislative session Wednesday hoping that their long budgetary nightmare -- $2 billion in spending cuts and the largest tax increase in state history -- is finally over.Groggy from a three-year-long financial ordeal, polarized by infighting and partisan fights over higher taxes, and emotionally drained by the politics of abortion and redistricting, General Assembly leaders believe they are about to awaken to calmer, better times."There's a feeling that we're starting fresh, starting all over again, rather than in the middle of a [four-year]

Keno might boost the state budget -- but not the image of state workers.For one short day, a keno terminal was attracting bettors in the lobby of the State Office Building on West Preston Street in Baltimore.Too many bettors, it turned out, to look very good.At lunchtime Wednesday, state Personnel Secretary Hilda E. Ford went downstairs to find a mob of gamblers, most of them state workers. "I asked someone what was going on, and he said, 'There's a keno machine here.' "Perhaps they were just having a little fun on their lunch hours.

Maryland faces a projected budget shortfall of nearly $2 billion next year, far more than expected, the state Board of Revenue Estimates reported Thursday. The gap means that the cycle of wrenching cutbacks will continue. Budget Secretary T. Eloise Foster said the widening gap became clear when updated projections showed a $920 million drop from previous revenue estimates, on top of the expected shortfall of more than $1 billion. The numbers form the foundation of the spending plan that Gov. Martin O'Malley will release in January, which by law must be balanced.

The waiting lines for food and medical assistance, always long at state Department of Human Resources offices, have grown even longer during this economic downturn as a surge in applicants has stretched caseworkers to the limit and left many people without benefits, simply because there aren't enough staff workers to process their claims. Baltimore Sun reporter Julie Bykowicz's poignant story Tuesday about Miracyle Thompson, a pregnant mother who was forced to skip meals so that her children could eat, represents a dilemma faced by thousands of Maryland residents who have waited longer than the 30 days allowed by federal law for emergency assistance approval.

Legislative leaders, saddled with a new budget hole of $516 million and a deadline for balancing the budget, said yesterday that they might resort to additional furloughs for state workers and slashing aid to local governments that have largely been spared in previous rounds of spending cuts. Senate President Thomas V. Mike Miller and House Speaker Michael E. Busch laid out some budgetary options yesterday as the state's revenue forecasters officially reported that they now anticipate more than $1.1 billion less in tax revenue during the next 16 months.

There was an audible sigh of relief in Annapolis when the federal stimulus package was enacted by Congress and signed by the president. The American Recovery and Reinvestment Act, with $3.7 billion for Maryland over the next 30 months, delayed the day of reckoning by doing what the state is not allowed to do - floating debt to fill a budget hole. That day of reckoning will come sooner rather than later. A few governors have rejected this found money, fearing it will lead to program expansions they cannot sustain.

State revenues are expected to drop more than $330 million below previous estimates for the next 16 months, setting the stage for another round of difficult budget cuts in the General Assembly amid warning signs of a weakening economy, state officials said yesterday. Lawmakers say they have no appetite for higher taxes in the wake of November's special legislative session, when they voted to raise them by $1.3 billion. Instead, the legislature will have to cut hundreds of millions of dollars to balance Gov. Martin O'Malley's budget.

One sign that Maryland's stop-smoking campaign is paying off is what isn't - the state collected $6.7 million less in tobacco taxes last fiscal year as sales continued to dip. Revenue decreased almost 2.5 percent, which is typical in recent years and slightly less than the state had expected, the comptroller's office said yesterday. While cigarette purchases edged downward, revenue from lesser-used tobacco products such as snuff increased 12 percent, or $800,000. All told, the state took in $272.

State revenues appear to have emerged from a more than two-year slump, raising the prospect that legislators will return to Annapolis next year facing a much smaller shortfall than expected. In a letter to General Assembly leaders, chief legislative analyst Warren G. Deschenaux said revenue trends indicate that the state may be facing a $252 million shortfall next year rather than the $800 million to $1 billion that had been expected. Revenues for this budget year had been expected to rise 7 percent but were up 9.8 percent for the year to date at the end of April, Deschenaux said.

Tuition cap bill would worsen budget shortfall C. Fraser Smith's column "When good policy meets good politics" (Opinion Commentary, April 25) is a perfect example of the spend-first mindset that has the state on the verge of a multibillion-dollar budget deficit. Mr. Smith's analysis of the legislation that would impose a 10 percent surcharge on the corporate income tax failed to address the legislation's major flaw: The corporate tax surcharge the legislation imposes would not generate enough revenue to pay for the spending increases and tuition cap the legislation mandates.

FISCAL RESPONSIBILITY, Gov. Robert L. Ehrlich Jr. said in his State of the State speech last week, is the first pillar underpinning his governance of Maryland. That's as it should be, and so we urge state legislators to analyze his latest bill to legalize slot machines by the standards of fiduciary duty required of those heading publicly traded corporations. CEO Ehrlich offers slots primarily to raise state revenues. So, does his plan maximize gains for his shareholders, in this case the citizens of the state of Maryland?

Question of the month Now that more than six months have passed since Sept. 11, how has your life changed? Has daily life returned to its normal course or been transformed by the "war on terror"? Or has the meaning of what is "normal" changed? We are looking for 300 words or less. The deadline is April 22. Letters become the property of The Sun, which reserves the right to edit them. Letters should include your name and address, along with a day and evening telephone number. E-mail us: letters@baltsun.