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The Tentacle


March 4, 2003

Another Slick Ruse To Raise Taxes Rears Its Ugly Head

John W. Ashbury

As we head into the last few weeks of the Maryland General Assembly session, the leadership of the House and Senate are combining two ideas to create havoc for Governor Robert Ehrlich.

First is his bill to put slot machines at state horse race tracks, of which the Governor is a staunch supporter. The second is tax increases, to which the Governor said during his campaign - and afterwards - he was totally opposed.

So what’s next?

The present dilemma was created by a two-fold explosion. First, Governor Ehrlich’s predecessor spent like a wild man for nearly eight years. Parris Glendening had a like-minded legislative leadership which allowed him to spend in every way he could dream up. And secondly, the national economy tanked.

So, as this General Assembly session began, Maryland was faced with a $1.8 Billion deficit. Cutbacks implemented by Mr. Glendening just before his left office, and enhanced by Governor Ehrlich in the first few days in office, have reduced the shortfall this year into manageable range.

Now the crisis to face is approximately $1.3 Billion. The task is daunting. The fights are over what programs to cut, and which ones, cut by Mr. Glendening, to put back into place. There are few new programs suggested - or funded - in Governor Ehrlich’s budget proposal.

In Maryland the governor is almost "all" powerful. The legislature cannot add to his budget - only cut it. This situation was fine and dandy with all concerned, as long as the party represented in the Governor’s Mansion was the same as the one in the legislature. But put them at odds and LOOK OUT.

Governor Ehrlich says the state needs the slot machine legislation to balance the FY ’04 budget. House Speaker Michael Busch (D., Anne Arundel) is staunchly opposed. Senate President ‘Mike’ Miller (D., Prince George’s) is a proponent. So where do we go from here?

Mr. Ehrlich testified before a House committee last week to promote his slots bill, a highly unusual move. He played the "race" card during his presentation, much to the chagrin of both his supporters and his opponents. He said that Speaker Busch was kowtowing to African-American ministers who are opposed to the slots.

So, here comes the opposition, saying that the way to get around the Governor’s no tax threat is to tie them to the slots bill.

It is apparent that the Thornton Commission recommendations to improve state public schools, passed last year, could be the victim of the Governor’s threat: "No slots, No Thornton money!"

It could happen that way. And if it does, Frederick County Public Schools faces a deepening budget crisis of its own. In the just approved (by The Board of Education) $313 million FY ’04 budget, is a revenue source of $6 million in Thornton monies.

FCPS is already asking the county commissioners to fund $13 million more than the maintenance of effort ($4 million) to provide program enhancements. Without the Thornton funds, they will be seeking $19 million. That isn’t going to be funded by these commissioners.

The commissioners are wielding a very sharp budget ax of their own. They have already been told by state officials that more than $4.5 million in state highways funds will not be forthcoming this year. They expected to have only $21 million in new revenues for the next fiscal year, and already $4.5 million is gone due to a state decision.

Reducing that by the $4 million in maintenance of effort dollars to FCPS means the commissioners have only $12.5 million to fund every increase sought across the realm of county agencies - including pay raises for all employees, funding additional needs at the Sheriff’s Department, etc.

But back to the state dilemma. Democrats are proposing increases in the sales tax and in the income tax. Don’t forget that we are just now getting the full benefit of a reduction in the income tax of 10 percent, passed a few years ago when the economy was booming.

Thornton will cost the state about $1.5 Billion per year when fully implemented. Best estimates are that slots will bring in $800 million. And a one percent increase in the sales tax will generate a similar number. Together they equal Thornton promises.

We can’t, however, forget the ruse the legislators pulled in the early 1970s when the lottery was first proposed. The argument was that all the money the lottery generated would be given to education. When the final bill was passed, however, that little detail was missing, and the lottery money goes into the General Fund to be spent as the powers-that-be see fit.

All the legislative leaders are saying that the slots money will go to fund Thornton, but we should be wary. What other "critical" need will arise in the future that will send Thornton to the scrap heap? If that happens, you can bet that the legislation to "unfund" Thornton will gather little notice until after the fact.

All the candidates knew last Fall that this year’s legislative session was going to be a nightmare fiscally. They still wanted to be part of the solution. But we aren’t seeing much leadership from those returning to the harness of responsibility.

They all seem to be under the impression that increased spending must happen every year. Someday, we can hope, that they will understand, as we do, that we must live within our means. Taking more money from the pockets of Marylanders might just create the revolt that they all fear.

If we have to live with less as productive citizens, then those who feed at the public trough should have to do the same. And that includes those who make the rules.



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