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BALANCING THE BOOKS

THE BALTIMORE SUN

Gov. Martin O'Malley has to submit a balanced budget to the legislature this week, but it has become clear in the early days of this General Assembly session that lawmakers have some ideas of their own. Unfortunately, they may not amount to much in the context of a $2 billion gap between Maryland's projected revenues and expenditures -- but that doesn't mean some aren't worth pursuing anyway.

The top of that list is the legislature's so-called "bond bill" program. Every year, the legislature gets a pot of money to dole out to pet causes, an Annapolis version of the earmarks that have come to symbolize the backroom dealing of Capitol Hill. The money involved isn't huge -- about $15 million a year -- and eliminating it wouldn't directly help fix the state's general fund gap since the money comes from the capital budget. And certainly many projects funded with bond bills are worthwhile.

But the program has poor financial controls and has been used too often in the past by legislators to steer money to organizations with which they or their relatives are affiliated. And bond bills are a key way the House and Senate leadership have to twist lawmakers' arms -- vote for this, and we'll let you have a project in your district. The General Assembly should scrap this one and not look back. While lawmakers are at it, they should also eliminate the legislative scholarship program, which has been abused in the past to dole out college money to friends, relatives and campaign contributors.

Senate President Thomas V. Mike Miller said last week that he doesn't think the state should reauthorize the historic tax credit program that helps facilitate the restoration of older buildings. House Ways and Means Committee Chairwoman Sheila E. Hixson has long had reservations about this program, and adding in Senator Miller's opposition means that even Governor O'Malley's support may not be enough. Too many lawmakers see it as money for Baltimore and vote against it.

That's a shame. The historic tax credit has proven to be the most effective stimulus program Maryland has -- an Abell Foundation study estimated that each state dollar invested returns $8.53 in economic activity, a stunning bang for the buck. If Governor O'Malley gets forced into some horse trading, he would be wise to preserve the historic tax credit program instead of his proposal for a tax credit for businesses to hire unemployed workers. It's unclear whether the size and duration of his new tax credit proposal would be sufficient to encourage hiring, but the historic tax credit program is a known winner.

Program Open Space is also potentially on the chopping block. The state has a dedicated revenue stream that's supposed to fund land purchases to prevent over-development, but the fund has been a frequent target of raids during previous tough budget times. Environmentalists have an excellent point that a real estate downturn, like the one we're experiencing now, is a great time for the state to continue its purchases because it can protect more land than it would during a real estate boom. But Senator Miller also makes an excellent point that if the state is being forced to choose between buying land and protecting the jobs of state workers, it's tough to justify buying land.

Because Open Space is funded through real estate transfer taxes, and the real estate market is in the tank, diverting the funds wouldn't amount to much -- perhaps $30 million to $50 million -- and the legislature could backfill that by paying for land purchases out of capital funds. It's not ideal, but in a budget crisis like this one, we may not have many other options.

Readers respond

Last year Del. Jim Malone got money for a YMCA where he sits on the board.

This year Sen. Ed Kasemeyer wants money for Merriwether Post Pavillion. Why should the taxpayers help fund a private entity? What's Kasemeyer's connection?

This pot of gold could easily be stopped, and it would send a message, as small as it is, that "we will not waste your money."

Voters' Ignorance

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