GOP Wary of Glendening's Spending
By Daniel LeDuc
Thanks to a vigorous economy, Gov. Parris N. Glendening (D) has cash to spread around. But although he calls his initiatives "prudent" and "responsible," the increase in spending this election year -- the biggest budget increase of his administration -- has opened him to Republican charges of reckless spending.
As the General Assembly begins to consider Glendening's budget, there are some underlying questions to the political debate: Will the good times that make the governor's largess possible continue? If not, will the state suddenly find itself living beyond its means?
"There's not enough money to do all the governor wants," said House Minority Leader Robert H. Kittleman (R-Howard). "They're planning on rosy income projections."
But in an interview, Glendening defended his proposals as affordable.
"Every year, people say the strong economy can't go on," he said. "Every indice we have . . . shows a strong economy at least for a year and well into 18 months."
Indeed, at this point Glendening's fiscal advisers say the only uncertainty is how quickly income taxes can be cut.
"Clearly income tax revenues are ahead of estimates. There's no disputing that," said Glendening's budget secretary, Frederick W. Puddester. "The question is how much -- and how much staying power they have. It comes down to funding a long-term tax reduction on what may or may not be short-term revenues."
The debate over spending will dominate the second half of the General Assembly's session as lawmakers begin to focus on which of the governor's spending proposals they will embrace and whether and how they will cut taxes. Although some trimming is expected, reaction to Glendening's plans to spend more on school construction, higher education, children's health and the developmentally disabled has been largely favorable in the Democrat-controlled legislature.
But the focus will intensify in the next week as state budget officials calculate February tax receipts and issue a new estimate of the surplus, which some analysts expect to grow by at least $50 million from its current $283 million.
It is that additional revenue that has thrust tax cuts to the top of the agenda in Annapolis. Several options to speed up the 10 percent income tax reduction passed last year are pending in the Senate. That reduction was to be 2 percent a year over the next five years, but Senate leaders want to complete the cut within four years, while some senators believe the tax could be cut 15 percent.
In the House, delegates say they want to cut the state property tax. But that appears to have less chance given the opposition of key senators and Glendening, who has endorsed accelerating the income tax cut.
Whatever is decided will likely become an issue in the governor's race. In that context, the debate will be framed by two very different philosophies of government.
Glendening, a self-described "progressive," resisted tax cuts until last year and believes that government should be a force for good in society. His advocacy of new government programs beginning in his days as Prince George's County executive earned him the nickname in Republican circles of "Spendening." He signed on to an acceleration of the income tax cut last month only cautiously.
His likely Republican opponent is Ellen R. Sauerbrey, the former Baltimore County delegate who ran against Glendening four years ago advocating a 24 percent cut in the income tax. A conservative, she has long been an advocate for reducing government and said the increasing revenue shows taxes could have been cut more.
Last year, Glendening appeared to take the tax issue away from Sauerbrey with his embrace of the 10 percent income tax cut. But with the surplus rising and Glendening proposing new spending, Sauerbrey could be positioned to argue that the extra money should be returned to taxpayers.
The new spending is possible, Glendening maintains, because of the flush economy and prudent fiscal planning. The governor and legislature have filled state reserve funds with more than $600 million, more than twice as much as Wall Street analysts say is necessary.
Though significant, that money could be eaten up quickly during a recession. But few lawmakers are interested in increasing the reserve, instead feeling political pressure to return the money to taxpayers or to increase spending.
To keep spending under control, Glendening has said that he will use the surplus only for one-time expenditures rather than ongoing new programs. He has earmarked $88.5 million of the surplus for school construction. An additional $100 million will help pay for the 10 percent income tax cut, but that tax cut and his health program for children -- also being paid out of the surplus this year -- are ongoing costs that will have to be accounted for down the road.
The governor also proposed $635 million in new higher education funding over the next four years. He vowed to college administrators that he would provide that money even if the economy slowed, obligating himself to the increased spending.
He argues that the spending is possible because the programs are modestly priced in the context of an overall $8 billion general fund budget.
Nevertheless, some of Glendening's harshest Republican critics in the legislature have complained that the governor's proposals are being made without an eye toward those future obligations. They note that after next year's surplus, the nonpartisan Department of Legislative Services is projecting a $200 billion budget shortfall in two years that will grow to $539 billion by 2003.
Though that is a relatively modest $100 million a year that has to be accounted for, Republicans are seizing on every bit of spending to attack the governor. Last week, Minority Whip Robert L. Flanagan (R-Howard) even denounced Glendening's proposal to spend $3 million to aid public libraries. "We need a plan to address the overwhelming deficits," he said. "We're on a fiscal upswing, but these things don't last forever."
Flanagan voted for the bill anyway, an acknowledgment of the popularity of much of Glendening's agenda.
That is the political edge for the governor, who has to counter the attacks of his spending: He has selected very popular programs such as aid to schools and the developmentally disabled. And by agreeing to accelerate the income tax cut, Glendening forces Republicans to go along or else be seen as resisting tax reductions.
He has made it very difficult for his GOP adversaries to argue against him, something they admit will make their job harder.
"When Santa Claus is giving out the presents," Sauerbrey said, "you don't want to be the Grinch."
© Copyright 1998 The Washington Post Company