The land of plenty is quickly becoming the land of over-promise. Over-promises to teachers unions in the form of higher pensions we can’t afford. And over-promises to the uninsured to expand Medicaid. And over-promises to state employees whose future health care costs the state is putting off paying for.
The latest budget estimates show the state deficit for this year is over $500 million and on target to be over $1.3 billion next year. As Comptroller Peter Franchot recently said, “the Board of Revenue Estimates adopted an exceedingly weak revenue forecast for fiscal year 2009, and collections to date have fallen below those pessimistic expectations.”
This situation requires not just slowing the growth in government spending but actually cutting it. Period. Slimming state government is a new and untried phenomenon for our elected officials, including Gov. Martin O’Malley.
He called a special session to raise taxes across the board last year to pay for all of those over-promises. This year we’d like him to call the state legislature to special session to slash spending. Special interest lobbyists are working overtime scrambling to save money for their pet causes. But we need O’Malley and our state legislators to think of all of us, the “working families” so often mentioned in their press releases and speeches.
We grudgingly accepted higher taxes last year. We will not do it again with unemployment rising, housing values plunging, discretionary income falling and credit drying up.
We suggest state legislators start the process by reversing some recent legislation, including the 2006 decision to increase teacher pensions. That bill costs taxpayers more than $130 million per year today and will increase about 4 percent annually. Since bigger pensions do not increase teacher retention — the main argument for the increase — it should be dropped. That extra $110 million this year and hundreds of millions more in coming years to expand Medicaid should be put on the chopping table. And instead of deferring $46 million for state employee pension benefits as proposed, the entire pension and benefit programs should be overhauled so private sector workers don’t have to work until we die for state employees to retire early in comfort.
These are going to be unpopular decisions. But without them we shall pay higher taxes that will stunt state economic growth whether slots pass or the stock market rebounds in coming months.
