ACTING GOV. BLAIR LEE III and the Maryland General Assembly will be starting the year with a pleasant task: deciding how to spend a budget surplus that should add up to about $128 million. How did Maryland's prospects suddenly become so fair? Only last winter, the state anticipated such a big deficit that the sales tax had to be raised. But those calculations were made before the state's economy started improving last spring. Moreover, the budget-makers had not banked on the lottery's being so popular; they had underestimated the state's take by a two-year total of about $52 million; or 40 per cent.
This does not mean that last winter's nervous predictions were a false alarm. Perhaps the Board of Revenue Estimates should have expected more from the lottery - but then the board would have ben accused of gambling too much. Besides, it's better to be surprised by a surplus than by a deficit, as Virginia has learned the hard way recently.
In any case there's now a surplus - and no shortage of ideas about how it should be used. Mr. Lee wants to spread the benefits around. He favors lowering the state property tax, providing raises for state employees and bigger payments for welfare recipients, precluding tuition increases at state universities and colleges, and increasing aid for local schools by some $20 million. He is also considering cutting income taxes by hiking the standard deduction from $500 to $1,500.
This something-for-everyone approach may sound like little more than standard election-year politics. But it happens to be, as well, a sound way to handle a windfall. Aside from the school aid, Mr. Lee is not proposing - at least not now - any new programs that could impose large future costs. He has also rejected, and rightly so, the idea of repealing last year's sales-tax increase. That could cost the state $130 million a year, and the cut would probably be short-lived - unless the General Assembly finally came around to making the income tax more progressive, which we think should have been done some time ago.
That points to something that the state's officials and taxpayers should keep in mind. Maryland is growing again, but only at a moderate rate; no new boom like that of the 1960s is in sight. Moreover, budget pressures are likely to increase, pension obligations will grow and more inflation in medical costs could raise. Medicaid bills again. In short, the surplus is a welcome reprieve, but no one should expect Maryland's finances to stay so rosy for very long.