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'Headed in the right direction'

Unlike Md.'s last Republican governor, Larry Hogan shows he knows how to make a deal.

When you elect as governor someone who has spent his life in real estate, you expect he knows how to make a deal. Gov. Larry Hogan's response to the House Appropriations Committee's significant re-writing of his budget proposal suggests that may prove to be the case. Mr. Hogan wanted to eliminate Maryland's persistent gap between projected spending and revenues — the so-called "structural deficit" — entirely and forever in his first year. In a unanimous, bi-partisan vote, the House committee advanced a proposal Friday that gets about 75 percent of the way there while providing funds to reverse some of the governor's cuts to education, employee salaries and other worthy causes. Though he's not declaring victory yet, Mr. Hogan is giving every indication that he'll take three-quarters of a loaf.

That's an important sign for those reading the tea leaves for how the next four years of divided government are going to play out. Maryland's last Republican governor, Robert L. Ehrlich Jr., had a tendency to declare war in such situations, but although Mr. Hogan has made some stylistic missteps in his first weeks in office, this was an important indication that he can be effective in working with the legislature to achieve his goals. For all the changes the Appropriations Committee made, this budget proposal still moves the state in a direction it likely would not have gone had Mr. Hogan not been elected.

Credit, too, goes to House Speaker Michael E. Busch and Appropriations Chairwoman Del. Maggie McIntosh who took up the challenge of finding a way to restore some critical priorities of Democrats — and ones Mr. Hogan said he wasn't keen on cutting either — like public education and state worker raises while keeping more or less within the governor's framework. The committee's decision to monkey with a plan to pay extra into the state employee pension fund is unfortunate and will cost the state in the long run. We're with Mr. Hogan and Comptroller Peter Franchot in objecting to that decision. But it's also worth noting that the plan the House settled on isn't quite as bad as the one the Department of Legislative Services initially suggested, and it is also only one part of the spending cuts the committee approved.

In all, the Appropriations Committee found nearly $300 million in spending reductions not included in the governor's proposal. The largest part of that comes from assorted reductions to the Medicaid program — not something Democrats are typically eager to cut. The committee agreed to forego the repayment of Program Open Space funds diverted during the Ehrlich administration, and it signed on to most of Mr. Hogan's proposed cuts to community colleges and private institutions of higher education. The legislature is subjecting itself and the judiciary to the same 2 percent across-the-board spending cuts the Hogan administration adopted for executive agencies.

On the campaign trail and since being elected, Mr. Hogan has presented himself not as an ideological warrior so much as a mathematical one. His said his decision to eliminate cost-of-living increases for state workers was not because he has some animus against them but because the state didn't have the money. He said he would love to fully fund K-12 education, which polls have indicated is the top priority of voters in the state, if legislators could find alternative cuts that kept the state on sound fiscal footing. His statement Friday night — that he had concerns about some of the committee's actions but felt matters were generally "headed in the right direction" — showed that he meant it.

Mr. Hogan also said that "the budget process will not be completed without meaningful discussion on the many tax relief measures our administration has introduced for struggling Maryland families, small businesses, retirees, and veterans." We beg to differ. We certainly don't object to tax cuts if they can be fairly targeted and paid for responsibly. But Mr. Hogan repeatedly said on the campaign trail that talk of tax cuts should wait until the state's finances are stabilized. We got a no-news-is-good-news report on Maryland finances this month when the Board of Revenue Estimates declined to revise its December forecast of state tax receipts, but given the repeated write-downs of the last year, we're not so confident that the budget will stay balanced now and forever more.

In addition, the General Assembly's commission on business competitiveness, which has already produced a set of recommendations that has been well received by both parties, is due to produce a report on the state's tax structure. We should wait to hear what it says. If we're going to cut taxes, we should do it in a comprehensive way that makes the state stronger, rather than just helping a few favored groups.

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