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Higher ed is the golden-egg goose that boosts tax revenue

March 10, 2003|By TIM ROWLAND

At a Maryland Public Policy Institute-sponsored forum in Annapolis this legislative session, Anirban Basu of Towson University made the point that, while bad, Maryland's economic straits are not nearly so dire as they are in many other states across the nation.

What consistently explains Maryland's relatively good fortune, Basu says, is that extra spending on colleges over the past eight years has been the foundation upon which our economy has grown.

Some of Gov. Robert Ehrlich's most severe cuts in these troubled times are in higher education, and at the same MPPI forum, former state economic chief James Brady defended these cuts. Spending for higher education was so disproportionately high during the Glendening Administration, that it needs to be brought back in line, he said.

But Brady's point lacks closure. True, we spent a goodly share on higher education in the late '90s and perhaps it was disproportionately high. But the key point that Brady overlooks would seem to be this:

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It worked.

The University of Maryland's quality rankings have soared this past decade, along with the fortunes of a number of state schools. And where schools succeed, the economy has succeeded.

Ehrlich deserves credit for holding the line on taxes this year, but the schools have played a role, too.

Certainly, conservative budgeting is key to allowing people to enjoy more of their own incomes. But of all people, pro-business conservatives ought to understand that short-changing higher ed is like selling off the most profitable subsidiary in your corporation: It will give your income statement a substantial, one-time boost - but down the road loss of that cash cow will force greater cuts and greater debt.

Corporations can't go to the taxpayers when they run out of funds, but the government can and will. If the quality of our schools and the quality of our jobs wane, taxpayers will take the hit.

In the national tax-cut debate, conservatives are fond of saying that it's the rich who pay the great majority of the taxes and that's absolutely true. And how do we create wealthy taxpayers who serve to lower everyone's tax burden?

Certainly not as they have chosen to do in some states, by encouraging the processors of chicken carcasses and what-have-you to employ thousands of insufficiently educated people for the smallest possible amount of wages. That's not a tax-base booster. (Especially since the low-wage-payer has generally been attracted to the area by hefty tax breaks.)

Washington County is an interesting case, because we are on the cusp between the chicken pickers and the bio- and high-tech opportunities that have opened up to the east.

The lower wage warehouse jobs we've created have been higher in quantity than quality, and you can see the results in our local governments that are running deficits and looking to raise taxes to cope.

The current debate over higher education funding in Annapolis may seem remote, but it is coming at a critical time for Washington County, where at long last we might finally have a four-year and graduate-school building - and no one to teach in it.

If other universities across the state are tied up protecting their own diminishing resources they are not likely to have any spare parts for Hagerstown. That's why Washington County's lawmakers would do well to jump on a proposal by Hagerstown Community College President Guy Altieri which would allow university programming to be provided, not just by Maryland, but by out-of-state public and private institutions.

HCC could play a stronger supporting role as well, Altieri believes, because it has, among other things, lab and daycare services it could share. (Ah, for a university site adjacent to HCC; but then I did promise I wouldn't bring this up anymore, didn't I?)

If we could count on higher ed funding to increase in Maryland, such contingencies wouldn't be necessary. But it's good at least one person is considering all the options, and this is an opportunity for the delegation - which has been lagging behind throughout the planning phase - to lead in the programming phase of our local campus.

A good, well-funded school will make a difference here. Money spent will come back, multiplied, in tax revenue.

The paradox is that when we had a governor who spent liberally on higher ed, he wanted to spend liberally on everything else too. So the tax-revenue benefits of education were quickly soaked up throughout a generally bloated budget.

Now we have a governor who prefers cuts to spending, but applies those cuts to higher ed, a clear budgetary money-maker.

Some day there may be a politician who will spend freely on schools, but not feel obliged to use up (and then some) every penny that education generates. It would make for a nice nation indeed if government could somehow hold on to the good habit of making wealth possible, while ditching the bad habit of always demanding it back.

Tim Rowland is a Herald-Mail columnist.

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