Just a warm-up for the state's big budget-balancing game

The Baltimore Sun

When the real budget crunch comes - sometime soon - we may see a re-enactment of the "firefighters first" syndrome.

The concept involves a kind of aggressive tutorial on what government does with your tax money.

Here's how it works:

You're a mayor or governor who needs to raise money to make the budget work. Knowing that no one wants to pay more taxes, you announce that matters are so dire that cuts will be made in the fire department. This gets people's attention. It suggests that taxes pay for essential services.

As many know by now, Maryland faces a $1.5 billion structural deficit, largely as the result of a major public education program passed without what is called a "revenue source."

Taxes should have been raised - or spending cut - to make the new program affordable. That didn't happen. It was an election year.

So Gov. Martin O'Malley and the legislature will have to do now what should have been done years ago.

But the chore may have its upside.

Changes in the state income tax structure - making it more progressive, for example - could come as part of a deficit-erasing package.

What you saw in Annapolis last week, when the governor announced more than $213 million in budget trims, was preliminary to something more ambitious and politically risky. A shifting of the burden may be in order, but first the O'Malley administration has to establish its bona fides as guardians of the financial health of the state.

To that end, the governor announced various cost-saving maneuvers, the largest of which carves $47 million out of the Medicaid budget. That slice of savings comes from the most vulnerable of citizens, from a group incapable of meaningful resistance. The administration insists the trims can be made without damage to the system.

It could get worse, though. (Think firefighters at this point.)

Mr. O'Malley said the "real pain" would come if the budget had to be balanced entirely with cuts. "Because then you will see a whole lot of reductions to public safety, public education, all of the things that go into local government and our quality of life at the local level," the governor said.

A so-called doomsday budget would have closed the budget gap without tax increases, eliminating hundreds of state jobs, freezing workers' salaries and forcing tuition increases at state colleges and universities.

So, in other words, if we don't proceed responsibly, the symbolic firefighters may be in our future.

But things could get better and fairer.

The top income tax rate of 4.75 percent in Maryland kicks in after you've earned $3,000. So many of those who are least financially able pay taxes at the same rate as the most able.

It would please many, of course, if the governor and the Assembly were to find a way to modernize the tax structure, agree on services this state wants to provide and find a relatively pain-free way to pay for it all. Mr. O'Malley is addressing what could be the hallmark moment of his tenure. It will be a major test of his political and governmental acumen. Maryland is one of the wealthiest states in the nation, but that does not mean people are happy about being taxed. Just the opposite, perhaps.

In the end, every legislator will also have to decide how to address the tax and deficit issue. He or she will have to interpret the package of budget-balancing measures offered by the governor and the Assembly leadership: Last year, Republicans and Democrats balked when some substantial cuts were suggested in state aid to public education. Everybody wants deep cuts until he or she realizes that much of the budget goes to public education and public safety, teachers and firefighters.

And, don't forget, all of these exertions are necessary just to stay even, to bring income into line with spending. If the state wants to move ahead on health care, prison reform and other costly objectives, it will need elected officials as interested in the public interest as they are in long public careers.

C. Fraser Smith is senior news analyst for WYPR-FM. His column appears Sundays in The Sun. His e-mail is fsmith@wypr.org.

Copyright © 2021, The Baltimore Sun, a Baltimore Sun Media Group publication | Place an Ad
72°