Md. Lawmakers In a Mood to Spend
By Daniel LeDuc
Like most states and the federal government, which have benefited from the glowing economy, Maryland is sitting pretty. The $260 million surplus in the main $7.8 billion operating budget already has prompted talk of new tax cuts, myriad pleas for a share of the cash and even some muted discussion of, just maybe, banking the money for when times turn sour.
Gov. Parris N. Glendening (D) wants to spend some of the surplus for new school construction and to expand health care for poor children. House of Delegates Speaker Casper R. Taylor Jr. (D-Allegany) agrees but also wants to use of some of it for a one-year cut in the state property tax. Other legislators want to spend some of the money to speed up a 10 percent cut in income taxes. And there are as many special interest proposals out there as there are special interest groups.
"If we had a dollar on the table for every proposal I get about the surplus, we could double the surplus," Glendening said recently.
Glendening already has spent the last week touring the state, from Catonsville to St. Mary's County, doling out money almost daily for transportation projects, library improvements and other new initiatives he is proposing in these flush times. He will formally announce his budget next week -- and his campaign for reelection later this spring.
Abundant money and a governor and legislature up for reelection: It is a combination with all the volatility of beer and a sailor's shore leave, and it is sure to dominate the General Assembly session that is gaveled into existence at noon today.
Still, the surplus won't be the only thing debated these next three months.
The governor predicts a "major battle" over how to address the outbreak of Pfiesteria piscicida, a toxic microbe that killed at least 30,000 fish and sickened people last summer along the Eastern Shore and some tributaries of the Chesapeake Bay. He has yet to issue his proposal, but a special commission convened by Glendening after the outbreak has urged that the state focus on pollution from farms, which passes into the waterways.
Glendening also has proposed a significant increase in state spending on higher education, in an effort to fulfill a commitment the state made a decade ago to improve the University of Maryland, particularly the College Park campus. The governor has proposed a $635 million increase over the next four years, $64.5 million of it in the budget he will unveil next week.
The legislature also will consider whether to change the pension system for state employees and teachers. Maryland is ranked near the bottom of all states in its pension payouts to retirees. The state pension board recommended changes to the system last year, to increase benefits but also to mandate employee contributions.
The state's cheery financial condition creates an easier atmosphere for discussions on nearly every program and proposal to be debated during the session.
That is far different from the beginning of the governor's term three years ago, when Maryland was still feeling the effects of the recession of the early '90s and budgets remained austere.
This year, for example, Glendening has proposed spending $29 million to expand health care coverage for children whose parents make too much money to qualify for Medicaid but not enough to afford their own insurance.
A less ambitious and less costly plan he advanced last year foundered in the legislature.
But this year money from the surplus, combined with federal matching money to pay for the proposal, means most members of the legislature are lining up behind Glendening's idea. The disagreement likely will come in how it should be done, not if.
"It's not only the money, it's an election year," said one lobbyist. "Any advocate trying to get a new program in -- this is the time to do it."
Every special interest group, from the state's business community to its charitable nonprofit organizations, is weighing in.
Nonprofits would like to see some of the money set aside to pay for tax incentives to spur charitable giving. Their plans range in cost from $8 million to $40 million.
Business leaders would like see more tax cuts, or at least an acceleration of the current plan to cut the income tax 10 percent over the next five years.
Sen. Barbara A. Hoffman (D-Baltimore), chairman of the powerful budget and taxation committee, said she is open to accelerating the tax cuts because the General Assembly and governor have committed to the reductions.
She also said a tax cut would relieve political pressure to spend the surplus, helping the state avoid long-term commitments it cannot afford. Spending the surplus on the accelerated tax cuts, she said, would "take the cookies out of the cookie jar."
Glendening also has urged caution. The surplus should be spent only on one-time expenses and not create long-term budget requirements, he said.
He is earmarking at least $225 million for school construction in the new budget, a part of which will come from the surplus. Glendening also said that a "significant portion" of the surplus should help pay for the income tax cut the legislature approved last year, although he has not endorsed speeding up its implementation.
Glendening's likely Republican opponent in this year's governor's race, Ellen R. Sauerbrey, has seized on the size of the surplus as a clear indication that taxes can continue to be cut in Maryland.
She advocated a 24 percent tax personal income tax cut in her close, but failed, campaign against Glendening four years ago.
"Surpluses make for dangerous times and especially during elections. It's like the Christmas presents come out on Christmas morning," she said. "I believe when you have a surplus, you return the money. This money belongs in the pockets of Maryland taxpayers, not in the bank accounts of state government."
But there are a few lonely souls in the legislature who believe it does belong in the bank accounts of state government, to help guard against an economic downturn in the future.
Maryland's rainy day fund, which has grown since the recession of the early 1990s caused slashes in state programs, now has more than $500 million.
That actually exceeds the goal the legislature set for the fund, which can be tapped in times of economic distress.
Del. D. Bruce Poole (D-Washington) is one of a handful of lawmakers who is urging that the Rainy Day Fund continue to grow.
"Sooner or later, there's going to be a downturn in the economy," Poole said. "Everybody is in the room when there's a press announcement about a surplus. The crowd dwindles when there's a recession."
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