THIS WAS going to be a column about Maryland's outrageously high taxes, but, as sometimes happens, the truth messed up a good story.

Maryland is certainly not a "low-tax state," as claimed by the Maryland Budget and Tax Policy Institute.

But neither is it the "tax hell" described by Republican Gov.-elect Robert L. Ehrlich Jr. in his 2001 fund-raising pitches.

With a few exceptions, Maryland taxes seem just about right. That's not a conclusion you're likely to hear repeated much by either side as the General Assembly deals with a projected budget deficit of $1.2 billion for fiscal 2004. But it is supported by the facts.

Maryland's state and local tax haul as a percentage of personal income has declined from 10.2 percent in 1994 to 9.7 percent now, according to the Tax Foundation, a nonpartisan Washington think tank.

In 1994 Maryland ranked 20th highest nationally in this category, which is one good way to gauge the locally generated "tax burden" on a state's economy. Now Maryland ranks 37th, better than states such as Georgia, Mississippi and Arkansas, according to the Tax Foundation.

Maryland doesn't do as well in taxes paid per resident. But Marylanders make more than average Americans. So, of course, they are going to pay more in taxes.

In 2000, the most recent year for which results are available, Maryland was 17th highest in state taxes paid per resident, the Tax Foundation says. But even that's an improvement. In the early 1990s Maryland was 12th.

Maryland looks good in most individual tax categories, too.

It ranks 27th highest nationally in local property taxes paid per resident and 33rd highest in local property taxes as measured against total personal income, says the Tax Foundation.

It is 44th highest in sales tax collections and 39th highest in corporate income tax revenue as portions of the economy, according to an overview by the Maryland Budget and Tax Policy Institute.

Its 5 percent sales tax is below that of 16 other states, and in Maryland the sales tax applies to fewer items than in other jurisdictions. Maryland's top corporate income tax bracket of 7 percent is less than that of 25 other states.

The one big category in which Maryland still does poorly is also the most visible: personal income taxes.

We're No. 3 nationally in the personal income tax take as a percentage of the state's economy, after New York and Oregon, according to the Maryland Budget and Tax Policy institute. And Maryland's top combined state and local personal income tax bracket of 7.9 percent for 2001 was 12th highest in the country.

Not great. But not as bad as if Gov. Parris N. Glendening hadn't grudgingly signed a 10 percent tax cut in 1997 after coming under pressure from business and Republican gubernatorial candidate Ellen R. Sauerbrey.

It was the Glendening tax cut that removed Maryland from the red zone in the overall state tax rankings and put it in today's competitive slot.

Liberals might argue that other states' tax practices are irrelevant, that Maryland should assess its needs and tax its citizens accordingly.

But "benchmarking" performance against one's peers is always a good reality check, as corporations know. And high taxes can deter people from living in your state. No matter what your rates, you don't collect any taxes unless you have taxpayers.

There was a reason in 1997 to lower taxes to current levels, and it still exists.

When the economy picks up, Maryland may be in the best position since the 1980s to attract jobs and companies. Defense spending, which fueled the '80s bonanza, is coming back. And the low-tax, low-wage South, Maryland's historic economic enemy, is no longer low tax or even very low wage.

The budget will have to be balanced, of course. Slot machines would help, and so might a few carefully calibrated tax increases. A sales tax on services, which are untaxed now and make up a huge portion of the retail economy, is one no-brainer. It may make sense to raise selected business taxes.

But government will have to shrink. Between 1990 and 2001 - similar points in the business cycle - state and local government jobs in Maryland grew by 15.3 percent, while all other jobs grew by 13.5 percent and Maryland's population grew only 12.4 percent. There's room to trim the public payroll.

Government will never be as small as the Cato Institute wants or as big as the Institute for Policy Studies wants. But if you set yourself up to get criticized by both, maybe you're doing a good job.