Marylanders deserve more value for their tax dollars

By Robert L. Ehrlich Jr.
Sunday, October 17, 2010

The Post asked the candidates for Maryland governor: How will you close the state's budget deficits? And what more can a governor hope to achieve in a time of such severe fiscal constraints?

Across Maryland, families and small business owners have spent the past few years making difficult adjustments to their monthly budgets to cope in a tough economy. They've cut out the luxury spending, paid down their credit card balances or put off hiring new workers until their balance sheets are in order.

Yet the same can't be said for the state government that represents them. After four years of Gov. Martin O'Malley's leadership, here are the stark fiscal realities we face:

First, total spending under O'Malley has risen by $22 billion over the past four years compared to the previous four. It should surprise no one, therefore, that the state's revenue only covers 84 percent of its expenditures.

Second, a record tax increase hailed by O'Malley as the "long-term solution" to Maryland's budget woes in 2007 has actually left Maryland with $6 billion in out-year deficits.

Third, as Marylanders pay down their own debts, state debt has increased 27 percent. With revenue shrinking, politicians took up the dangerous habit of issuing debt to pay for current-year expenditures. In other words, they've been paying their mortgage with a credit card.

Missing in Annapolis is an adult conversation about the wisdom of spending money we don't have. I see the next four years as a historic opportunity to create a government of the future, rather than preserve a government that clings to the past. With a sorely needed dose of candor and hard work, we can transform the mission, reach and scope of state government to deliver services at a reasonable cost that citizens are willing to pay. Here's how:

Value-for-Dollar Initiative: Government's legacy the past four years has been to enact higher taxes and provide fewer services in return. In Montgomery County, for instance, residents enjoy 17 cents of services for every dollar they pay to the state in taxes. Families and entrepreneurs get horrible value for their dollar, and the next governor gets a massive budget shortfall on the horizon.

I will end this mindset and institute a Value-for-Dollar Initiative. The goal will be to align government expenditures with revenue by delivering outcomes for Marylanders at a price they are willing to pay -- and not a penny more. This means shifting government's starting point from last year's base entitlements to what citizens are willing to pay for core government services. In fact, we'll require agencies to remove last year's entitlement entirely and begin budgeting anew.

Conservative budgeting: To maximize the Value for Dollar Initiative's success, my administration will only adhere to conservative revenue estimates when formulating annual budgets. Doing so will help overzealous agencies and legislators avoid unpleasant shocks associated with revenue not meeting expectations. It will also help us replenish our rainy day fund, 50 percent of which O'Malley has spent.

Pension reform: A preeminent threat to Maryland's long-term fiscal solvency is its pension obligations. The Pew Center on the States recently raised "serious concerns" about Maryland's pension liabilities, noting that Maryland has only 65 percent of the funds needed to meet $33 billion in obligations. I will introduce bipartisan pension reform that is fair to both pension beneficiaries and the taxpayers who finance the system. We can control the costs of state pensions while still protecting the benefits that existing state employees have already earned.

Review mandates: Nearly three-quarters of Maryland's $32 billion budget is mandated spending. Over the past four years, Maryland's governor and legislators have gone to extraordinary pains to pretend this elephant is not in their living room, even as it strains our fiscal solvency. A bipartisan review of entitlement spending in state government and ineffective expenditures is long overdue, and will start in my first year.

Skeptics should consider my first term in office. We inherited more than $2 billion in deficits from my predecessor. In less than four years, we eliminated $1.4 billion in unnecessary spending, reduced the executive branch bureaucracy by 7 percent and tripled the state's rainy day fund to $1.4 billion. Even in those tough fiscal times, I increased investments in our public schools more than any governor in history, including O'Malley. Today, I remain as committed as ever to ensuring every student has access to an education that prepares them to compete in the 21st century.

Maryland's families and job creators deserve credit for making tough decisions to put themselves on stronger financial footing. Sadly, their governor has failed to show the same resolve. With new leadership next year, we can and will do better.

The writer is the Republican candidate for Maryland's governorship.

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