Upcoming editorial: Maryland's $2 billion shortfall
Here's a preview of an editorial we're working on. Let us know what you think. The best comments will appear alongside it in the print edition.
Gov. Martin O’Malley learned this week why to hate economists. On the same week that Federal Reserve Chairman Ben S. Bernanke declared the recession “very likely” over and less than a month after shrinking the state’s general fund budget to 3-year-old levels, he’s now been told he must cut about $300 million right away, and instead of a $1 billion shortfall next year, it looks to be $2 billion.
Forecasts, shmorecasts.
Like a concrete block tossed in a pond, the ripple effect of high unemployment rates continues to spread long after the initial splash. Lost jobs means lost income tax revenue, and the latest estimates are that Maryland’s situation is worse (and the economic recovery is going to be slower) than was foreseen a mere month ago.
For anyone who remembers the last major recession in the early 1990s, the downward spiral is a familiar ride. It was just as painful for then-Gov. William Donald Schaefer, who presided over Board of Public Works meetings with the disdain of a vegetarian forced into butchery and helpless to do much more than hack away at popular and much-needed education, health and public safety programs on a regular basis.
Trim fat and waste? Mr. O’Malley’s options are not nearly so easy. The days of such easy choices are over. Just ask those Eastern Shore lawmakers who appeared before the Board of Public Works last week to plead the case for keeping open a state-run community mental health center in Chestertown that is due to close in February as a result of the last round of budget reductions.
No doubt that closing will hurt people. It will mean many living on the Eastern Shore will have to find treatment far from their homes. Some may not get help at all.
But guess what? More such sacrifices are going to have to be made, not fewer. Health care, education and public safety, that’s the majority of the state budget. Never mind the audacious hypocrisy of Shore Republicans, always pious voices for cutting spending in Annapolis, pleading for funding to be restored for the sake of their constituents — they’ll have a lot of company in that department before the recession is all said and done.
A lot of sacred cows are going to be headed for the slaughterhouse: Tuition freezes and aid to private colleges are nice things when the money is available, but those days are gone. State employee health benefits can’t be maintained at the status quo, and teacher retirement contributions? Local governments had better plan on picking up more of that tab next year.
Even aid to K-12 public schools, as high a priority as they’ve been for the state in recent years, can’t be held exempt — not at a time when state-funded kidney dialysis, mental health services and programs for the developmentally disabled are potentially on the chopping block, too.
Lawmakers should also rethink their conventional wisdom of no tax increases in an election year. Will voters be angrier next fall at the thought of disabled loved ones losing services, or at updating the state’s absurdly low tax on alcohol that’s based on 1960s and ‘70s era prices? Would a one-year extension on the state’s millionaire tax cause more uproar than local aid cuts that devastate libraries and after-school programs?
If Mr. O’Malley is feeling a little queasy right now, that’s understandable. It’s not swine flu but the discomfort brought by getting squeezed between a rock and a hard place. If it’s any consolation, economists will no doubt underestimate the rise of tax revenue when the recovery belatedly manifests itself. Until then, there simply aren’t many good budget-balancing choices left.







Comments
You write "Never mind the audacious hypocrisy of Shore Republicans, always pious voices for cutting spending in Annapolis..."
Just wait until the election. They want to have their cake and eat it, too.
When will their supporters ever learn, there's a better way.
Posted by: RE Goldberg | September 18, 2009 2:49 PM
where is the tax on booze it seems the booze wholesalers own this state
Posted by: hank | September 18, 2009 2:54 PM
It seems the boy Gov "misread" the economy as well as Biden did.
$2,000,000,000. AFTER the largest tax increase in Martyland history.
Do I smell another Special Session and new and more taxes to satisfy the addiction of these thieves in Annapolis?
Posted by: Fed Up | September 18, 2009 3:04 PM
Why is it that the tax on alcohol is so low? The Gov should raise that tax to todays standards as everyone else who pays taxes. No ones pay or income tax is at the 1960's and 70's era. Makes me think that the officials in Annapolis must have blinders on - Duh! Also, with State workers being furloughed and pay being decreased this also contributes to less revenue generated in the State because they don't have the money to spend.
Posted by: concerned citizen | September 18, 2009 3:04 PM
You can't keep cutting costs in hopes of keeping this boat afloat. You need to generate revenues. Add the higher welfare caseloads and federal sanctions for non-compliance and His Honor will need to come up with additional money to pay fines. Kinda bites when you add in the fact that cut my state salary reduces your revenues.
Posted by: DL | September 18, 2009 3:18 PM
How about the audacious spending habits of your boys in Annapolis who probably can't balance their own checkbooks with getting a loan.
Total and complete bs. As the 4th highest taxed state in the country I for one have had enough of Annapolis' tax and spend ways. Let em cut the bloody budget to shreds. Let Annapolis feel the pain like I do paying these ridicously high state and city taxes and then at night worry about my safety due to the liberal justice espoused by both city and state. I can't even send my son to the local 7/11 due to crime in Baltimore city. And I should be taxed more! For what. Corrupt Democrats in office, crime grime, drug dealers in the alley, gunshots two blocks up the street. No more new taxes. Let OMalley lie in this mess of his makings!
Posted by: jay | September 18, 2009 3:44 PM
Just what we need, more tax cuts. You on the "Editorail Board" should get out of your offices more and see what the real world is really like. Us out here have to make the painful choices of what to do without or to not purchase something. It is something that our Legislators should learn to do themselves. The days of continuous increases in the state budget are over. When the legislators stop saying they are cutting the budget, when in acutality they are only cutting the "INCREASE" in the budget year over year.
Posted by: Joe | September 18, 2009 3:45 PM
I won't never mind the audacious hypocrisy of Shore Republicans if you won't never mind the audacious hypocrisy of the entire state's Democrats.
Deal?
Posted by: Carole | September 18, 2009 4:29 PM
Cutting aid to private colleges is a short-sighted and uninformed proposal. Why eliminate the “private” option, when the” public” option costs taxpayers six times more for each degree conferred. Aid to private colleges is primarily used to provide financial aid to Maryland residents. If this aid is not available, many of these students will attend public universities, costing taxpayers millions more or they will go out of state and take their tuition dollars and talents with them.
Posted by: BS | September 18, 2009 4:42 PM
What about cutting funding for all the day labor centers that contribute nothing from our tax investments except for taking jobs from local citizens. Or any other wasted funds on Casa de maryland
Posted by: lenny | September 18, 2009 4:54 PM
I recall a somewhat smug Governor O'Malley declaring that BRAC would balance out any job losses.
Guess he was wrong.
Posted by: bryanintimonium | September 18, 2009 5:05 PM
Unfortunately the Fed. was misrepresenting the reality of the economy, or was just getting hopeful because home sales were finally up. Didn't he notice-sale were up because prices continued to tumble? As far as O'Malley's delima goes; He already raised taxes on the millionaires and many have left the state-severely depleting revenues. He may want to re-think that stratagey. The waiste is in Annapolis and that building in Baltimore-home of the school board and all those embezillers. And that is where the cuts should begin.
Posted by: Joe Kluskey | September 18, 2009 6:25 PM
Isn't it about time to do a thorough analysis of state gov? Time to cut the programs that can't be funded, reduce the spending, stop living beyond our means, and quit bellyaching about it.
Posted by: Bar | September 18, 2009 8:34 PM
ATTENTION!! Congress Has The Votes Needed To Pass A Public Option - TODAY http://bit.ly/TCq7O
Why A Strong Public Option Is Essential - By jacksmith - Working Class
Robert Reich explains the pubic option: http://bit.ly/dDYSJ http://robertreich.blogspot.com/
John Garamendi on the Public Option and the Grassroots: http://bit.ly/TJMty
It's not just because more than two thirds of the American people want a single payer health care system. And if they cant have a single payer system 77% of all Americans want a strong government-run public option on day one (86% of democrats, 75% of independents, and 72% republicans). Basically everyone.
It's not just because according to a new AARP POLL: 86 percent of seniors want universal healthcare security for All, including 93% of Democrats, 87% of Independents, and 78% of Republicans. With 79% of seniors supporting creating a new strong Government-run public option plan, available immediately. Including 89% of Democrats, 80% of Independents, and 61% of Republicans, STUNNING!!
It's not just because it will lower cost. Because a strong public option will dramatically lower cost for everyone. And dramatically improved the quality of care everyone receives in America and around the World. Rich, middle class, and poor a like.
It's not just because it will save trillions of dollars and prevent the needless deaths of millions more of YOU, caused by a rush to profit by the DISGRACEFUL, GREED DRIVEN, PRIVATE FOR PROFIT MEDICAL INDUSTRIAL COMPLEX!
It's not just because every expert in every field, including economist, and Nobel laureates all agree that free market based healthcare systems don't work. Never have and never will. The US has the only truly free market based healthcare system in the World. And as you all know now, IT IS A DISASTER!
It's not just because providing or denying medically necessary care for profit motivations is wrong. Because it is WRONG! It's professionally, ethically, and morally REPUGNANT!, Animalistic, VILE and EVIL.
THE REASON THE PUBLIC OPTION IS ESSENTIAL:
The public option is ESSENTIAL because over 200 million of you are trapped in the forest of the wolves. Which is the forest of the DISGRACEFUL, GREED DRIVEN, PRIVATE FOR PROFIT MEDICAL INDUSTRIAL COMPLEX! With no way out except through needless inhumane suffering, and DEATH. While the wolves tear at your flesh, and rip you limb from lib. Then feast on your lifeless bodies like a dead carcase for transplant parts.
At the most vulnerable times of your lives (when you were sick and hurting), millions of you have had to fight and loose cruel, but heroic battles. Fighting against the big guns of the DISGRACEFUL, GREED DRIVEN, PRIVATE FOR PROFIT MEDICAL INDUSTRIAL COMPLEX! in the forest of the wolves. All because you have no place else to go. You have no other CHOICE!
But the PUBLIC OPTION will give you someplace safe to go. And it will give us someplace safe to take you. The public option will be your refugium (your refuge). Where the wolves cannot get at you when your down, hurting, and vulnerable. Where everyone who needs it can find rest, security, comfort and the care they need. Protected by the BIG GUNS of We The People Of The United States. THE MOST POWERFUL PEOPLE AND COUNTRY ON EARTH.
This is why it is so critical that we do not lead another 50 million vulnerable, uninsured Americans into the forest of the wolves, without the protections of a Strong Government-run public option. We The People Of The United States MUST NOT LET THAT HAPPEN to any more of our fellow Americans. If healthcare reform does not contain a strong public option on day one. YOU MUST! KILL IT. Or you will do far more harm than good. And millions more will die needlessly. Rich, middle class, and poor a like.
To those who would continue to obstruct good and true healthcare reform for the American people, and who seek to trap millions more vulnerable Americans in the forest of the wolves. We will continue to fight you. We are prepared to wage all out war against you, and will eagerly DESTROY! you. Time...is...UP! YOU HAVE BEEN WARNED! No Co-op's! No Triggers! NO INDIVIDUAL MANDATES! without a Strong public option on day one.
Healthcare reform can be the GREATEST! Accomplishment of our time and century. A time when future generations may say of us, that we were all, AMERICAS GREATEST GENERATIONS.
BUT WE MUST ACT!
I therefore call on all my fellow Americans and the peoples of the World. To join us in this fight so that we may finish becoming the better America that we aspire to be for everyone.
SPREAD THE WORD!
I have been privileged to be witness as many of you fought, and struggled to take your first breath, and your last breath on this earth. Rich, middle class, and poor a like. Life is precious.
Whatever the cost. WE! MUST SUCCEED.
God Bless You My Fellow Human Beings
jacksmith - Working Class
Things You Can Do To Help NOW! http://www.everydaycitizen.com/2009/09/tired_of_watching_people_die_n.html
No Triggers! http://www.huffingtonpost.com/jason-rosenbaum/a-trigger-for-the-public_b_277910.html
Triggers http://www.huffingtonpost.com/david-sirota/weve-seen-these-triggers_b_283583.html
Krugman on heathcare (http://krugman.blogs.nytimes.com/2009/07/25/why-markets-cant-cure-healthcare/)
Senator Bernie Sanders on healthcare (http://www.youtube.com/watch?v=RSM8t_cLZgk&feature=player_embedded)
Posted by: jacksmith | September 19, 2009 12:26 AM
Unfortunately the Fed. was misrepresenting the reality of the economy, or was just getting hopeful because home sales were finally up. Didn't he notice-sale were up because prices continued to tumble? As far as O'Malley's delima goes; He already raised taxes on the millionaires and many have left the state-severely depleting revenues. He may want to re-think that stratagey. The waiste is in Annapolis and that building in Baltimore-home of the school board and all those embezillers. And that is where the cuts should begin.
Posted by: Joe Kluskey | September 19, 2009 7:07 AM
Funny number this $ 2Billion. Seems to me this is exactly the amount( give or take a cool millin or 2) in surplus left by Gov Erhlich that Omalley blew before he even took office. Anyone remember the so called "special session" the taxes the increased spending and the Long awaited slots that Democrats fought against the entire time Erhlich was Governor? Does this realloy surprise anyone in MD? You democrats that are over 30 need to Wake up and realize that the Democratic party of yester year is not even close to what the Democrat party is all about today. What this state needs is SHARED POWER. In the meantime, yes, tax cuts do work, but not if just keep increasing spending. Tax cuts generate MORE Revenue--NOT LESS. But you cant keep growing government and entitlement programs without consequences.
Posted by: Carlhk1 | September 21, 2009 7:22 PM
Unfortunately, MD's budgetary problems did not begin in either the Erhlich of the O'Malley administrations.
They began in the Glendening administration which passed a 10% cut in MD State Personal Income tax, added the beginnings of a major increase in state aid to education via the Thornton Commission report and provided no increase in MD State revenues from such sources as slots, MD State property tax, or internet sales tax from other sources to offset those losses.
FYI - I just bought a set of four(4) truck tires via the internet and lo and behold Shelia Hixon I paid no MD State Sales Tax!
While MD's Constitution requires a balanced budget all administrations and the General Assembly still rely on funny revenue forecasts such as the "cigarette tax". Which is working as desired -- making cigarettes more expensive so people won't smoke. But that results in less actual tax revenue for the state.
Unfortunately, the gasoline tax is now suffering the same condition. As gasoline became more expensive people drove less miles and traded-in or bought cars & trucks that got higher miles per gallon. Remember "Cash-for-Clunkers."
The result MDOT announced $ 2.1 billion in project activity cuts! These hit all counties in the state and it doesn't look likely to change soon.
If there's going to be a change in MD's budgetary condition it won't happen until after the next Gubernatorial election in November, 2010 and in the General Assembly in 2011.
Until then we will continue to muck around avoiding the tough actions necessary to rectify the budget deficit.
Who knows maybe by then, if they really try hard, there will be a $ 3 billion shortfall!!!
And the beat goes on.
Posted by: My View | September 23, 2009 9:53 AM