Analysis: 'Balanced Approach' Meets an Unbalanced Budget - Southern Maryland Headline News

Analysis: 'Balanced Approach' Meets an Unbalanced Budget


Commentary by Len Lazarick, Len@MarylandReporter.com

Public employee unions, nonprofit groups and education advocates have been huddling in recent weeks to organize support for what they call “a balanced approach” to the continuing fiscal mess facing Maryland.

“Balanced approach” means balancing next year’s budget with its continuing billion-dollar shortfall not just with spending cuts but with more revenues: tax hikes. These include tax increases on millionaires, corporations, internet sales and a long list of consumer services, not to mention cigars and gasoline – a pretty inflammatory mix in all.

Tonight, as the Spending Affordability Committee meets in Annapolis, we’ll get to see if legislative leaders are inclined toward a “balanced approach.”

Monday night, AFSCME — the American Federation of State, County and Municipal Employees, the largest union of state workers – and MSEA — the Maryland State Education Association, representing more than 70,000 teachers – along with a dozen other sponsors organized a “community conversation” on the impact of state budget cuts. They brought out more than 100 people to Baltimore City Community College.

Worst fiscal crisis since the Depression

“States are facing the worst financial crisis since the Depression,” said Jon Shure of the Center for Budget & Tax Policy in Washington and a Bethesda resident. The states are experience “the biggest drop in revenues that they ever seen,” he said.

“There are some people who want to take advantage of this crisis to shrink government,” Shure said. But like someone who has lost his job and can’t pay his mortgage, “you don’t have a spending problem, you have an income problem.” (This flips the mantra of Republican legislators, who like to say, “We don’t have a revenue problem, we have a spending problem.)

Shure argues that “cutting makes it harder to build a strong economy,” and state governments can quickly put revenues back into the economy.

Neil Bergsman of the Maryland Budget and Tax Policy Institute – an affiliate of the Maryland Nonprofits Association — said “we need government to step up and provide some demand.” The state has already “cut services” – scaled back increased spending – and reduced government jobs.

Workers testify about impact of cuts

Attesting to the budget cuts, a long string of government workers testified to the way tight funds have changed their jobs.

Archie Nelson, a resident adviser for the Department of Juvenile Services and union shop steward, said “we’ve become guards” through budget cuts, keeping the detained youths from assaulting each other, rather than helping them see a positive way out of their situation.

Karen DeCamp, director of neighborhood programs for the Greater Homewood Community Corp., talked about the impact on education.

“We’re flat funding education,” DeCamp said, and “that flat funding meant real cuts. Flat funding is a de facto cut.” She wanted the inflation adjustment restored to the Thornton education funding formula.

It was the same argument that was made two weeks ago by none other than Alvin Thornton himself, the Howard University educator who chaired the commission that led to a massive infusion of funding into K-12 education since 2002. Thornton was speaking to the Maryland Education Coalition at a meeting in Columbia.

As far as he is concerned, “Thornton” aid has not been fully funded.

Business groups on a different wave length

While teachers and social service workers agree among themselves about the need for more revenues, they might as well be speaking in foreign languages to chambers of commerce and other business groups, who see some of their members struggling to hold on through the recession.

Sen. James Ed DeGrange, the Anne Arundel Democrat who is the Senate chair of the Spending Affordability Committee this year, told the BWI Business Partnership Wednesday morning that jobs putting people back to work in the private sector and transportation funding – along with balancing the budget — would be the focus of the upcoming session.

DeGrange, who rarely votes for a tax increase, seems inclined to raise transportation revenues, but found little support for a gas tax hike. He asked how many people “wouldn’t mind” a gas tax increase. Out of about 150 business people at the breakfast, he counted four who raised their hands.

“That’s better than my last meeting,” DeGrange observed, noting that “the business community is kind of divided” on tax hikes for transportation.

He said nothing that would have encouraged education advocates.

Flat funding for education

“It’s always been that we haven’t touched education,” particularly for K-12, DeGrange said, who also chairs two budget subcommittees. But next year, in education aid, “maybe we hold some things flat. That’s the only thing that hasn’t been touched.” (Public school aid was largely held flat this past year.)

“Everything has to be on the table,” DeGrange.

“There will be proposals” for other tax increases, but transportation funding is “where the focus is going to be,” DeGrange said in an interview.

Gov. Martin O’Malley has shown some support for a gasoline tax hike – as have top legislative leaders — and last week O’Malley argued that a millionaires income tax surcharge doesn’t drive the wealthy from Maryland.

This evening’s meeting on Spending Affordability Committee might provide some clues as to whether legislative leaders foresee a steady diet of cuts or the “balanced approach” with tax hikes other groups are advocating.

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