20070427 A costly failure to tackle budget gap By David Brinkley

A costly failure to tackle budget gap

By David Brinkley, April 27, 2007

May 4th, 2007 Editor’s note: in a recent phone conversation with Senator Brinkley, he gave me permission to reprint this…)

At the bill-signing ceremony Tuesday, state Senate President Thomas V. Mike Miller commented that he was glad to see that the bill to protect the terrapin was on the list to be signed because the slow pace of the turtle symbolized the glacial pace of the O'Malley administration. A red-faced Gov. Martin O'Malley gave thumbs-up and replied, "Fear the turtle?"

Mr. Miller has spoken freely about the lost opportunities of the 2007 session - articulating a position that many legislators agree with but few are willing to speak about.

The new governor requested time from legislative leadership to assess the state's financial situation in preparation for major changes in 2008. Thanks to his predecessor, Gov. Robert L. Ehrlich Jr., there was cash reserved for such a luxury. However, spending down the state's cash reserve funds to the statutory bare minimum leaves the state in a worse position for next year's budget deliberations.

The General Assembly's failure to address the state's structural deficit in this year's session portends greater hardships on Maryland's working families when the taxman (or woman) comes in future sessions. Which taxes will the state increase without putting Maryland at a competitive disadvantage?

Regrettably, initiatives to address the state's pending budgetary disaster were rejected even though relatively small measures to reduce spending this year would yield big dividends in the future.

While the administration sought (and received) more time to seek efficiencies, most legislators know that the annual budget process over the last few years has been concentrating on trimming increased spending in most other agencies to fund the historic increase in public education funding recommended by the Thornton Commission.

I support Governor O'Malley's StateStat initiative. I submit, however, that he will find Governor Ehrlich streamlined state operations, and the low-hanging fruits of financial efficiency have already been harvested.

Now the Democrats' rallying cry in Annapolis is that nothing short of major tax increases can possibly fix the dilemma we will confront next year. I disagree, and so do the members of the Republican caucus.

Senate Republicans offered an alternative budget plan this session to retain the state's cash reserves for a true "rainy day" and to trim spending increases this year but maintain high levels of education funding. A video lottery terminal bill passed by the Senate last year could be used as a new funding source that would eliminate the structural deficit over the next five years.

Several senators noted that this plan could solve the state's fiscal challenge without the need to increase taxes. Despite the pronouncement of a newfound cooperation in Annapolis, this measure failed on a party-line vote.

On a positive note, few new state programs were added requiring additional funding in the future. Paradoxically, "progressives" will decry the failure of these programs as a failure of the legislature.

These progressives conveniently ignore the black market created by Maryland's high tobacco tax, particularly in Western Maryland and the Eastern Shore. The damage to Maryland's retailers as consumers increasingly purchase goods over the Internet, thereby avoiding the sales tax, is another unwelcome byproduct of their tax policy. And they ignore the impact on affordable housing for Maryland's working families of their advocating a new tax imposed on impervious surfaces, in the name of "protecting the bay."

In summary, there is a need to restore fiscal discipline to the budget that was lacking this year. The administration squandered an opportunity to get a head start on resolving the structural budget deficit without higher taxes. Resolving that problem without higher taxes can be accomplished - but will require the commitment of Governor O'Malley, House Speaker Michael E. Busch and Senate President Miller.

Sen. David Brinkley, a Republican who represents Frederick and Carroll counties, is minority leader of the Maryland Senate. His e-mail is david AT dbrinkley.com.

Brinkley MD Senator David Brinkley