The opening salvos have been fired in Maryland’s upcoming battle of the budget. The stakes are high, the trends are gloomy and the outlook is disturbingly uncertain.
These are conditions that call for careful and measured consideration of all options as state policymakers keep one eye on economic conditions at home and the other on the outcome of federal budget battles in Washington.
Gov. Martin O’Malley was right to tell the Maryland Association of Counties last weekend that all options, including tax increases, should be on the table as the 2012 legislative session approaches with the state facing as much as a $1 billion shortfall in the 2011-12 budget.
Mr. O’Malley said, “We will have to make more cuts, and at the same time to protect our children’s future, we must be open to new revenues.”
The predictable response came immediately from a predictable source, state Sen. E.J. Pipkin, R-Eastern Shore, who excoriated the governor for even suggesting tax increases and asked, “What planet does he live on?”
This is the kind of kneejerk reaction that has contributed to the paralyzing deadlock in Washington that led to near default and downgrading of the nation’s credit. It is not helpful and it is not constructive.
It is far too early to determine whether any tax increases will be needed. But it is also far too early to take any option off the table.
Maryland’s own economic problems are bad enough, and they could be made far worse by what the federal government does or doesn’t do between now and the end of the year.
For example, the law authorizing highway and transit spending, which includes the federal gasoline tax, will expire Sept. 30 without congressional action. Republicans and Democrats are at odds over new legislation and there are fears of another stalemate like the one that shut down the Federal Aviation Administration this summer.
Such an outcome could have a devastating financial impact on Maryland, which is already considering its own gas tax increase to meet vital infrastructure needs.
Maryland should keep all of its fiscal options open until the full impact of federal action is known. Only then will state leaders know what has to be done. Then they will need to muster the political will to do it.