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The Maryland GOP on the state budget

August 19, 2007|By BOB MAGINNIS

Is Gov. Martin O'Malley really going to give Maryland Republicans' budget plan a fair hearing? Early indications are "no," which leaves the state's minority party in a tough spot.

If the governor and the Democratic leadership doesn't take their proposals seriously, Republicans fear that revealing too much detail too soon would allow the majority party to rile up the affected interest groups, ensuring the plan's defeat.

O'Malley ought to deal with the GOP in good faith, because there is a chance that as high as the Democrats are riding now, they will overreach themselves on the matter of new taxes.

It would be better, in my view, for the Democrats to have their constituents believe that the Republicans are forcing restraint upon them, instead of having citizens believe that they're just out-of-control, tax-and-spend lawmakers.

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In the middle of this whole issue is Del. Chris Shank of Washington County, also the Minority Whip of the Republican Party.

In a recent visit to The Herald-Mail, Shank said that at the end of the last session, the Republicans realized that they had to be intellectually honest with citizens, as opposed to just throwing rhetorical bombs at the Democrats.

Shank said that being honest required a plan that would restrain the rate of growth of the state budget, until state revenues caught up expenditures.

Shank said two years of restraint would allow the state to weather the storm without raising taxes, but the success of the plan depends on the Democrats accepting a budget that grows by 3.5 percent, as opposed to the 8.5 percent the O'Malley administration favors.

As committed as Shank says the Republicans are to budget reform, Shank said that the GOP caucus will not accept tax increases to bail the General Assembly out of past actions that were fiscally irresponsible, such as approval of the Thornton Commission education reform initiative without a dedicated source to fund it.

Shank did say that the budget can't be cut by $1.5 billion, Instead, the Republicans would like to see about $700 million in cuts, coupled with legalization of slots, which would provide $600 million in revenues.

Would-be slot licensees would bid in what Shank described as a "reserve auction. The company that agreed to accept the smallest share of slots revenues would be the winner, he said.

After that, 46 percent of what remained would go to education, 6 percent to the horse-racing industry, 4,5 percent to offset the impact on local government and 4.5 percent for administrative costs.

(Those who follow this debate should be prepared for would-be operators to say that they cannot possibly run their operations on what the state proposes to give them. That argument is a "load." And for all the poor-mouth citizens will hear, operators will make out just fine, even if they only get to get 10 percent of the revenues. It will be a lot easier to increase the operators' percentage later than to reduce it if state officials perceive that they're getting the short end of the revenue stick.)

Shank said the essence of the Republican plan is to avoid new taxes, including increases in the gasoline and the state sales tax, while avoiding any diversion of state Rainy Day Fund funds.

Shank said that under state law, Maryland must reserve an amount equal to 5 percent of of its annual revenues, or risk losing its coveted AAA bond rating.

Queried0 about some lawmakers' proposals to ask local counties to pay a greater share of the costs, Shank said that was a possibility, especially because state aid to education has grown by a great deal in recent years.

"We're not talking about cutting. But we need to pause, to allow the budget to catch up the expenditures," he said.

Will the Democrats at least give this plan consideration?

Republicans hope so, but after O'Malley met with Republican leading including Shank on Tuesday, he described the Republican plan as "an approach that would reduce our rate of investment" in Maryland.

That implies Republicans don't want to do the things needed to make Maryland a better place.

Asked what would happen if O'Malley and the Democrats persist in that attitude, Shank said he was "not prepared to have this discussion now, but we'll have to look at other methods to get the message out."

In my view, Republicans ought to offer that detail now, before the distraction of a special session or the regular session. If the Democratic leadership uses the GOP plan's detail to whip up interest groups, then Republicans must be prepared to defend their proposals.

The bottom line: Waiting for the Democrats to play fair, especially when they control the governor's office and a numerical advantage in the General Assembly, is a waste of time. Make the case for budget restraint now, before the public gets distracted by some other issue.

Bob Maginnis is

editorial page editor of

The Herald-Mail newspapers.

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