Archive - Budget and Taxes

A version of this article was published in the Washington Post Outlook Section on December 1, 2002.

More Than Fat Will Be Cut in Maryland

With Maryland policymakers poised to cut spending to balance the state budget, we're about to be exposed to an unpleasant truth: There's not much fat to cut.

Gov. Parris Glendening announced some modest cuts last month, and Gov.-elect Bob Ehrlich has said he will make much deeper cuts in January. But the "excess" spending that is about to be targeted may include health care programs for people in nursing homes, community services for people with developmental disabilities and maintenance of our state parks and forests.

Here are some examples:

• Two years ago, businesses, unions and health advocates sought legislation to extend health insurance coverage to more low-income Marylanders. At that time, a single parent with two children who earned a little more than $500 a month was above the income limit to qualify for Medicaid. Because Maryland's income limits were so low, a low-income parent who did not work was twice as likely to have health insurance as a poor parent who did work because even low wages put the working parent above the income limit.

The debate on this proposal shed light on another shortcoming in Maryland's health care program. Despite years of inflation in health care costs, Maryland had not increased payment rates to doctors in a decade. The result was a dwindling number of doctors who were willing to serve people whose health insurance was provided by Medicaid.

Yes, the state could increase the eligibility levels and provide health insurance to more low-income, working Marylanders. But that wouldn't guarantee that the newly eligible would be able to find a doctor who would treat them.

In any case, the proposal died: Maryland did not increase Medicaid eligibility levels for parents or payment rates for most physician services.

• In 1998 policymakers realized that underfunding of services for the developmentally disabled meant a years-long waiting list of people who needed services. So that year the General Assembly enacted a five-year plan to provide at least one service to everyone on the waiting list.

The good news is that everyone who was on the waiting list on Jan. 1, 1998, has been served. The bad news is that since then, almost 5,000 more people have signed up for services; most of them are still waiting to be served.

Most of those still waiting for services need community support so that they can live outside of institutions, work and independently manage the tasks of daily living.

• Higher education may be another target for cuts, even though the university system hasn't recovered from cuts made in the 1990s. Per-pupil support for higher education is more than 20 percent lower today than it was in 1990. To make up for inadequate support, Maryland's universities increased tuition and fees 45 percent (after inflation) since 1990.

These are all examples of an underappreciated truth: While policymakers seek to cut as much as $1 out of every $9 of state spending, about 80 percent supports education, health and public safety.

These are areas that need more spending, not less. The other 20 percent pays for a range of items such as a court system, child care support for families, environmental protections and lead-paint abatement. The state spends $1 out of every $10,000 on support for affordable rental housing--not much fat there.

Maryland doesn't have a revenue shortfall because it spends too much money. Instead, years of tax cuts have left us with a revenue stream that doesn't generate enough money to provide the same level of services that we received last year. Or the year before that. Or the year before that.

It may be easier to believe that our tax dollars fall into a black hole, and that we don't get much back for what we pay in. But someday, perhaps, we'll get tired of sending our kids to overcrowded schools, waiting in line at the Motor Vehicle Administration or sitting in traffic on the Beltway--all of which pales in comparison with waiting years for service for a child with a developmental disability or going without health insurance.

Our policymakers are about to start cutting services to balance Maryland's budget. But be aware that most of what they will be cutting won't be fat.

--Steve Hill

is director of the nonpartisan Maryland Budget and Tax Policy Institute