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May 26, 2004

The Baby or the Bath Water? Tough Choices!

Richard B. Weldon Jr.

The Baby or the Bath Water? Tough Choices!

Richard B. Weldon Jr.

Maryland is facing a series of tough choices in the next 12 to 18 months. These choices are necessitated by the impending budget cuts, as income will come nowhere near addressing the fixed cost of state agencies and services.

Risking beating a dead horse, we had two alternatives to address the question of funding state services: tax increases or slot machines. One is a sucker's bet, the other is an easy out.

Taxes, an easy way out? You might not think so, but notwithstanding the pain of voters angry about their taxes going up, most politicians find it much easier to keep saying yes than to ever have to say no.

A common device is to raise taxes during the middle of an election cycle, avoiding the last year. The logic being that voter's memories are short enough that they'll forget if you hit them early in a term.

The upcoming FY06 budget will be bleak, painful, and very difficult. Programs that have operated for years will suddenly be facing the ax, and long time state employees will be looking at layoffs, something rarely ever considered.

In the last two years, Governor Robert Ehrlich and his administration have cut thousands of positions, but with very few actual bodies put out of work. Most of these cuts came from deleting vacant positions, a much easier choice than terminating a current employee.

There may be a silver lining in this cloud, though. The pain and hardship that will be necessary due to deep cuts in the operating budget may afford Maryland the chance to conduct a bottom's-up review of every single program, position, and service.

Government entities, be they federal, state, or local, are creatures of the demands placed on them by their customers. A new service or program usually starts to address a specific need, and then continues because there are people employed to fill that need.

It is far more common that these programs and services continue because of the people doing the work than it is that the service or program is still needed. Only in rare instances are there mechanisms in place to continually evaluate that the original constituency still exists.

I would always prefer to fund a program after an independent review verifies that the need still exists. In Frederick County, the county manager requires his directors to conduct a budget performance review, justifying expenditures by proving that the mission and objectives of the program are still valid.

Local government is better at this than the state. Small towns and mid-sized cities have to deal with a much more responsive electorate, so they are naturally more cautious about tax increases.

I can recall the two mayors I worked for, Tom Smith of Brunswick and Jim Grimes of Frederick. Tom's favorite saying was "watch your pennies, and your dollars will take care of themselves". Tom had a knack for spotting any out-of-the ordinary budget trends or expenses, and would always question any anomaly.

Mayor Grimes was more of a "big picture" kind of chief executive. Not that he didn't have a detailed understanding of the budget, HE DID. He was more comfortable allowing the budget director and finance officer to make recommendations, serving as a top level decision maker.

The budget development process was different at all levels of government. The obvious trend, though, is that the budget detail and control gets farther from the decision-maker the higher you go.

Mayor Smith made every single decision, Mayor Grimes set more of the broad view, the county commissioners try to grasp things at a very high level, and the governor depends on a sort of "bubbling up" of budget data to the highest level.

As the numbers grow, so do the stakes and the advocates. The louder and more numerous the voices for bigger pieces of the budget pie, the quieter the voices of everyday citizens begging for fiscal responsibility.

The tightening of resources at the state level will create a return to a higher degree of budget scrutiny and more stringent spending controls.

State agencies in Maryland would benefit from such a high degree of scrutiny. In some isolated cases, it has been years since anyone took a critical look at some of these agencies, even longer since many programs were validated.

Governor Ehrlich understands the need for essential citizen services. The cuts facing the state next year were not a product of the first Republican administration in 36 years, although the Democrat's will try to spin it that way.

The simple fact is that through a combination of national economic challenges and too much spending during the "good" times, ol' Mother Hubbard has gone to the fiscal cupboard and found it bare.

I, for one, am willing to accept the idea that we may have to go through a tough year or two before we see relief. Local governments will howl when additional cuts hit, and I have no doubts that good programs and essential services will be impacted.

That said, I also expect that that the services and programs that survive these tough times will be the truly essential services, those people and programs that support our most fragile and at-risk populations.

I recall my father-in-law talking to me about the Depression, and the way that people re-focused on what really mattered after weathering that nightmare. Nothing adds focus and seriousness like a severe lack of resources.

Our sacrifices will come nowhere near those suffered by the generations that re-built America in the 30's, but I'm certain that we'll have a better sense of what really matters, less duplication of effort, more cost-conscious state employees, and a smaller, more efficient service delivery system.

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