What would YOU do with $1 billion?
In the past few days, reports from the Ehrlich Administration indicate that Maryland had a $1 billion surplus for FY 2005, meaning that the state took in $1 billion more than what it spent. This is great news considering that a couple of years ago budget forecasts indicated that Maryland would be almost that same amount in the red!
Reducing spending [to be read cutting public services], a booming housing market, closing corporate tax loopholes (thanks, Steve), and a stronger state economy have (at least for the moment) opened the floodgates, and the cash is rolling in.
ONE positive result of this cash windfall is that the Governor has restored funding to public services that were either cut in part or completely in his FY 2006 budget proposal. Again, great news!
Just a few examples of restored funding include…
- Health Care for Legal Immigrants: $1.5 million in funding for health care for pregnant legal immigrants.
- Temporary Cash Assistance (TCA): $1.34 million in TCA benefits. TCA provides cash benefits to needy, unemployed, under-employed or part-time workers and their families who meet certain criteria.
- Adult Day Care Program: $880,000 for a rate adjustment for Adult Day Care. The Maryland Medicaid program covers medical day care services for elderly and disabled individuals who require the level of care provided by nursing homes.
A SECOND result of this unexpected cash has been increasing murmurs of tax cuts. If affordable, tax cuts are not inherently bad. In fact, tax cuts sound great--I mean every one loves a lil’ break in their taxes.
But let’s not get too far ahead of ourselves. As anyone who has ever balanced a checkbook knows, when you receive a big (and unexpected) check from Grandma, you don’t just spend it. You look at what you need, what you want, and what you anticipate down the road. Right?
In other words, despite this influx of unexpected money into the state’s treasury, Maryland is still facing a significant structural deficit. Down the road, say in FY 2007 and FY 2008, Maryland will experience a significant gap between revenues and the costs of running the government. The existence of this “structural deficit” is being overshadowed by the presence of this “extra” money.
So to answer my own question (and to briefly revisit Grandma), I would spend some of the $1 billion on a few needs, a couple of wants, and put the rest away for a rainy day. The rains will definitely come. For a family, the rains can be in the form of needing new tires or illness. For Maryland, the rains could be in the form of a $1 billion structural deficit in the next two years or federal Medicaid cuts.
So here is my wish list for Maryland….
- Fully fund the immigrant health program
- Restore funding to Medicaid providers
- Open the child care waiting list further
- Strengthen adult education in Maryland
- SAVE, SAVE, SAVE
NOW that I have shared my wish list for Maryland, what’s yours?
9 Comments:
$1 billion sounds like an huge amount of money. Granted, in some instances, it would be like an infinite amount. However, in the case of running a state like Maryland, while still nothing to sneeze at, $1 billion will not solve all that ails us.
As mentioned before, saving a significant portion of the funds would be very responsible. I don't think a tax cut would really do much to help Maryland taxpayers because it could not be that significant when broken down between all of them.
I propose using some of the funds to provide incentives to the residential sector to use renewable resources like solar power and wind power. Even geothermal HVAC systems would help delay our imminent energy crunch.
Also, I think using the funds to increase the level of affordable housing in the suburban areas of the state would be prudent since it is very difficult to purchase a home for much less than $230,000 in most of the areas outside Washington and Baltimore.
WHile using the funds to do many small good things would be attractive, it might be best to determine a few large scale projects that have been on the back burner.
By sustainable future, at 4:53 PM
This post has been removed by the author.
By Steve Hill, at 8:20 PM
Joanna Shoffner--you rock! Well done on the initial blog post.
What would I do with a billion dollars?
Let's see, we could give tax break to those biotechnology firms with large campuses up I-270.
We could change the tax laws so that multi-state manufacturing companies in MD don't have to pay any income taxes.
We could give a tax credit to film production companies.
We could pass a sales tax holiday.
We can make sure that companies don't have to pay real estate transfer taxes when they buy and sell property.
Oh, wait, we've already done all that!
Three things I'd do w/ a billion dollars:
1. Let's get serious about making sure that our neighbors who are dirt poor can have a minimally adequate standard of living. I am ashamed that our state is so stingy on cash benefits, access to health insurance, and access to affordable child care.
2. Let's add some staff in critical service areas: parole and probation officers, child welfare case workers, environmental services inspectors... We, collectively, are negligent in so many areas.
3. I'm sure that I still have a few hundred million dollars left over. I'd try to figure out the best way to use it to make our most disadvantaged communities healthier.
I look forward to reading what others would suggest.
Steve Hill
By Steve Hill, at 8:26 PM
Sustainable Future has some good ideas. I looked into wind power just out of interest a little while ago. Unforunately, except for right on the edge of the Bay, there are few areas that have sufficient wind to make it feasible. (I searched this after seeing a wind farm in Austria). Geothermal sounds interesting. I suspect the startup costs are high. Ethanol turns out to be a bust. I doubt if the fusion reactor will be successful. Anyway, sinking a few hundred million in renewable energy would be a great way to spend this.
Steve. Tax cuts? Maryland has an immense income distribution problem. Leveling this will make us more stable. Tax cuts don't help this at all, since they go to the upper end. How about a 21st century WPA? I think that is what you are suggesting. I know a lot of people that could use the employment. They want to work.
By Dr. C, at 12:19 PM
Dr. C:
No, I'm not suggesting that tax cuts are a good idea. I was being a smart aleck. Those are tax cuts that were passed in the last couple of years--at the same time we were booting low-income kids off of Medicaid, budgeting a dollar ninety five for rental housing assistance, and putting 20,000 kids on a waiting list for child care assistance. All so we could build up that big surplus.
I'm not sure how we build our communities. But, I live inside the beltway in Prince George's, and there are so many communities that appear to have little neighborhood economic or social activity. I don't know how we build those, but we must make our communities more vibrant.
Same situation is true in much of Baltimore and many of our rural areas.
One more thing to do with that surplus: Maryland--and other states--are about to get crushed by federal domestic spending cuts. We are going to have to fill in some of those gaps. For example, we rely almost entirely on the feds for rental housing assistance, but Pres. Bush proposed to eliminate about 9,000 units in MD. We spend next to nothing of state money on adult ed., but Pres. Bush has proposed to cut federal funds about 75-80 percent.
Those are just two examples. We've got some making up to do.
Steve Hill
By Steve Hill, at 12:47 PM
Sustainable future...I am inclined to agree with you, particularly about the lack of affordable homes. I do think that for many middle income individuals, owning a home in a safe area is out of reach. I do think that Steve makes a good point in his comments on Maryland's dwindling rental assistance program. It's a stretch to find rental housing for less than $1200 a month in Montgomery County. I so think that expanding the Renter's Tax Credit Program would be an interesting way to spend some of our surplus.
By MarylandPolicyBlog, at 1:56 PM
I sure woould like to know some specifics about what Ehrlich, O'Malley and/or Duncan would do with this (although it may not be the windfall that we thought given the cuts at the Fed level). I guess I am asking the big boys to put our money where their mouth is and tell us what they want to do. It will make a difference how I vote.
By Dr. C, at 11:27 PM
I'll keep this short. I agree that it's important to save for the rainy day.
By Alex Peak, at 3:34 PM
GIVE TEACHERS A HUGE RAISE!!!!
( I quit teachihg partially because I could not support myself on that crappy salary in a state with such high costs of living and it's not worth it when you get treated like crap)
Start a debt relief program for single people who make 50K or under. Everybody helps families - nobody helps out the single person living paycheck to paycheck. I'm drowning!
Fix the roads in Baltimore
Buy homes for educated people willing to be foster parents.
Build some decent, AFFORDABLE housing for middle class people! No one bedroom apartment should cost more than $500! Rents are out of control! How about some rental communities where the rent is dirt cheap but to keep out the trash, you do a criminal background check, they have to employed full time, and everyone has to have a college degree, technical school certificate, or some other "professional" certification (maseuse, teacher, police officer, nursing assistant, plumber, whatever). That way, you are helping the honest hard-working folks like me who are intelligent, good neighbors, and productive citizens, but just don't make bank.
The state of maryalnd and it's county government entities should be ashamed of what they pay their employees. Too many teachers, firefighters, ect..can't even live in the communities where they work or have to live in debt. This is a shame. DO SOMETHING ABOUT HOUSING PRICES!
Offer a huge grant to people who want to start a business in the state - but allow ANYONE to apply (the best business plan wins 1 st place and the most creative one wins 2nd place)Most grants have too many stringent and limited qualifications, standards, categories (grants for green people with the last name woogie).
ARTS grants!
By goddesscomedia, at 8:50 PM
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