Tough budget choices can't be put off forever

January 23, 2004

The $23.8 million budget submitted this week by Gov. Robert Ehrlich had good news and bad news for Washington County.

There's a $7.9 million increase in aid to schools, but a $3 million cut in assistance to local government, most of it in the highway user area.

Until the governor and the House of Delegates leadership can agree on how to address the long-term "structural deficit," this budget may be the best Marylanders can get in 2004.

The budget has already been criticized for its reliance on some accounting tricks to get Ehrlich through one more year before everyone has to agree to either raise taxes or make drastic cuts in state government.


There's not much choice, because as Budget Secretary James "Chip" DiPaula told The Associated Press, the deficit for the next budget year is already projected at $900 million.

The budget shouldn't make Democrats entirely unhappy, because it does include $98.5 million for sewer plant improvements to further the clean-up of the bay, a new Department of Disabilities and a bid to close a tax loophole that allows some corporations to shelter some of their income in shell companies set up in Delaware.

But Ehrlich's finance people acknowledge that even if the economy improves, increased revenues under the present tax system won't cover the higher costs of the education aid recommended by the Thornton Commission or the state's share of Medicaid costs.

We support the idea of holding off on any major tax increases until the group led by former Gov. Marvin Mandel finishes its look at how to streamline state government. But the day of reckoning cannot be postponed forever.

That's because borrowings from the various dedicated funds can only go on so long before the funds are depleted.

For example, is the account set up to pay local income tax refunds really overfunded by $162 million? Maybe yes, maybe no, but if you split that cash with the counties and Baltimore City, as the Ehrlich administration proposes, it won't be available next year, or until the next fiscal crisis hits.

Borrowing and postponing the hard decisions is what what the last Pennsylvania governor did in the last election year, leaving the tough choices to his successor. Erhlich and the legislature need to pledge that this is the last year they'll duck those decisions.

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