When it comes to preserving land and creating public parks, few government programs have succeeded like Maryland's Program Open Space. It has been one of the state's most effective weapons in the cause of protecting the environment and off-setting the worst effects of poorly-managed sprawl development in the cities, suburbs and rural areas.
The elegance of the program is in the simplicity of its design. By law, a .5 percent share of the transfer tax paid at real estate closings is set aside for protection of land against future development. So the more development takes place, the more real estate is bought and sold in the state, the more money is set aside for land preservation.
The problem is that the fund has proved to be a big temptation when the economy sours and tax receipts decline. Throughout its history, governors have sometimes been inclined to take money from Program Open Space to balance the general fund budget. That's understandable — to a degree — given that the state sometimes has more pressing demands than land preservation when unemployment is high and people are in need.
This can be a difficult balance to strike, but it's exactly what the General Assembly now faces. For a half-decade, the state has been diverting transfer tax income to finance the budget by temporarily amending the law for one year at a time. In return, Gov. Martin O'Malley, with the legislature's blessing, has financed Program Open Space projects in the capital budget, borrowing money to pay for such things as playgrounds and conservation easements or buying development rights from farmers.
Open Space is not alone in this bit of fiscal sleight of hand, incidentally. Other pay-as-you-go programs have been replaced with bonds, too, but Program Open Space, on both the local and state level, has been by far the biggest target for this with hundreds of millions of dollars involved.
At the height of the recession, that made a lot of sense. But five years later, it's not clear that Maryland is going to end this practice any time soon. In theory, the state is supposed to stop the diversions by 2020, but some environmentalists now have their doubts — in large part because Governor O'Malley chose not to include any cash for Program Open Space this year.
That doesn't mean Program Open Space isn't getting funded — eventually, maybe. Under the current plan, the program is supposed to be largely caught up in six years. Estimates are that the shortfall (the difference between borrowed money spent and transfer tax proceeds lost) will be in the neighborhood of $6 million, which isn't bad compared to the cuts other government programs have endured.
But what happens if there's another recession, or a new governor or legislature is less committed to restoring past cuts, or the state reaches its debt limit? Program Open Space is in a far more vulnerable position today than it was pre-recession, and while the circumstances aren't nearly as bad as they were under Gov. Robert L. Ehrlich Jr. — who zeroed out the program for the first three years in office at a cost of $400 million — there's legitimate reason for alarm.
Few, if any, candidates running for office this year are talking about restoring Program Open Space, but many are talking about adding new burdens to the budget like funding universal Pre-k education or reducing taxes. Meanwhile, lawmakers are seriously considering passing a Fiscal 2015 budget that reduces the state's contribution to the state still-underfunded retirement system, a troubling prospect given that it's not yet even 80 percent funded.
Since it was created in 1969, Program Open Space has invested about $2 billion in preserving Maryland land, but it has also been raided in the ballpark (surely an apt metaphor) of $1 billion. Restoring the program needs to be a higher priority for the current General Assembly or else future occupants of the State House will wonder, if such spending can be delayed for a decade, why not cut it altogether?
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