In today’s Gazette, Laslo Boyd writes about the structural deficit that we face in Maryland and it’s impact on the Governor’s race. As the column makes crystal clear — Governor Martin O’Malley makes the tough choices to address the deficit, Bob Ehrlich just makes more empty promises.
The pattern for quite a number of years has been for the governor and General Assembly to pass, as required by the Maryland Constitution, a balanced budget for the following year, but with the realization that there was a built-in deficit facing the state in the subsequent year. The approved budget always has included a surplus, but never enough to fully cover the out-year shortfall. This situation is the very essence of a structural deficit.
Bob Ehrlich, in his four years as governor, made no serious attempt to come to grips with it. In 2007, Martin O’Malley and the General Assembly did try to end the ongoing structural deficit of the state during a special session where they cut spending, increased taxes and looked to anticipated lottery revenues in about equal proportions. Then the most serious national economic downturn since the Great Depression hit, and the balancing act of the special session was wiped out. Talk about no good deed going unpunished.
On the other hand, if O’Malley and the General Assembly hadn’t acted in 2007, the projected deficit would be at least double what it is now, and Maryland would be looking more like California, Arizona or Michigan.
To fully appreciate the coming challenge, you need to factor in as well Ehrlich’s stated goal of increasing the deficit before he deals with it. In a campaign stunningly short of specifics on any of his short list of policy proposals, the one strikingly clear position is Ehrlich’s repeated wish to roll back the 1 percent increase in the state sales tax from the 2007 special session. That 1 percent generates approximately $650 million. Ehrlich asserts that cutting the tax will stimulate the economy and result in more state revenues, but even the most ardent free marketer would be hard-pressed to argue that the hoped-for new economic activity will produce anything close to the lost revenues.
That’s right, Bob Ehrlich’s fiscally irresponsible plan will increase the state’s budget deficit by $2.4 billion over four years. But that hasn’t stopped him from making promises he can’t keep.
Eight years ago, Bob Ehrlich told us he would save us money. But he increased state spending by 33% in four years – more than any governor in Maryland history and more than governors Glendenning and Schaefer.
More proposals without details
But wait, there’s more. Ehrlich, in what sounds like a bit of pandering to state employees with whom his relationship hasn’t been all that good either, has expressed his disapproval of furlough days as a way to save state dollars. If he were to take that budget device off the table, he would need to find another $108 million in cuts somewhere in the state budget.
It’s hard to know where all that money will come from. One place, for sure, is public higher education, where the former governor is on record as supporting significantly higher tuition. Another will be in every imaginable fee that exists, plus others that may have to be invented. And, in reality, despite his staunch anti-tax rhetoric, he did end up raising the state property tax last time around. But don’t expect to hear any details on this issue before November.
It’s a familiar story, because we’ve heard it all before… In 2002, Bob Ehrlich told us he wouldn’t raise our taxes. But he raised the state’s property tax by 58% and raised more than $3 billion in taxes and fees on Maryland families.
In 2002, Bob Ehrlich told us he would save us money. But he increased state spending by 33% in four years – more than any governor in Maryland history and more than governors Glendenning and Schaefer.
In 2002, Bob Ehrlich told us he cared about our kids. But he cut spending for school construction creating a crisis in our schools, and he failed to fully-fund Thornton.
We’ve heard a lot of promises from Bob Ehrlich over the years, but he always comes back home to his fiscally irresponsible, special interest agenda. So it shouldn’t come as any surprise that Bob Ehrlich is again making fiscally irresponsible promises that he just can’t keep.
One of Bob Ehrlich’s favorite talking points is to claim he left the state a surplus when he was voted out of office. Asked on Dan Rodricks’s radio show today, “Did the Ehrlich administration leave the state with a $670 million surplus or not?” Ehrlich responded, “Yeah … It’s not in dispute, the numbers are the numbers.”
In reviewing that claim, we thought the public should hear from Maryland’s top expert in the spending and budget habits of Bob Ehrlich.
Ehrlich’s budget secretary, Cecilia Januszkiewicz, admitted to the Senate Budget and Taxation Committee that the entire “surplus” would be consumed just to “come close to balancing” the FY 2008 budget.
Januszkiewicz: “The question that Sen. Hogan raised was, what do we anticipate doing with the $670 million. We know today that the operations of the state government will require all of that money to come close to balancing the fiscal ’08 budget based on current projections. And, it would be used to; we would take it out of the Dedicated Purpose Account in fiscal 2008 and use it for operations. One of the reasons we did not leave the money in the Rainy Day Fund as would ordinarily have happened is because we want people to understand that we actually need that money to balance next year’s budget.”
And in fact, when O’Malley was elected in November 2006, budget analysts reported that Maryland had a billion-dollar budget deficit, not a surplus.
If his own cabinet doesn’t believe Bob Ehrlich’s crazy claims, how can he expect the voters of Maryland to believe them?
We listen so you don't have to.
On his radio show Saturday, Ehrlich tried to deflect blame for his big-spending, fiscally reckless governorship by peddling revisionist history, claiming that, during his administration, “I was congratulated at the time for spending taxpayer dollars wisely on core functions of government.
In reality, nobody “congratulated” Ehrlich for exceeding the Spending Affordability guidelines three years in a row, for saying spending affordability no longer mattered, and for steering the state into a fiscal mess. In fact:
- The Baltimore Sun called out Ehrlich for his reckless spending, arguing that his budget, which contained the largest spending increase in state history, “doesn’t look beyond 2006 – or take into account the possibility that the economy might eventually sour.”
- The nonpartisan Department of Legislative Services warned that Ehrlich’s budgets would leave his successor with deficits exceeding $1.5 billion.
- The Washington Post chided Ehrlich for “fiscal irresponsibility,” writing that, under Ehrlich’s budget, “it wouldn’t take a recession to spur serious budgetary problems.”
- The Baltimore Sun reported in 2006 that “[Legislators] say Ehrlich’s proposed budget would establish spending benchmarks that could be unsustainable.”
Ehrlich may not want you to remember, but the record is clear. Ehrlich spent money like a drunken sailor, increasing state spending by $3 billion — over 30 percent — more than any governor in state history. No amount of after-the-fact blame-shifting can put a glossy shine on his record of fiscal irresponsibility.
