Maryland is a case in point. Gov. William Donald Schaeffer, rather than downsizing the bureaucracy, has proposed a downsizing of critical government services, including reductions in the number of state troopers, limiting aid to welfare and foster care programs, laying off county health officials and eliminating medical helicopters in some areas. After a storm of protest, Schaeffer said he would rescind these decisions, but transfer much of the state's burdens to the wealthiest counties.
The state and federal deficit problems are not due to spending on essential services, but to spending on non-essential services by government that has grown too big and unresponsive to those who pay for it.
In Maryland, gasoline taxes were increased 5 cents a gallon in 1987. In that same year, Maryland benefitted from $400 million due to changes in allowed federal deductions. This year, four taxes and fees were approved that are bringing an additional $130 million into the state treasury.
Sales tax revenue in Maryland also increased, but Gov. Schaeffer says a $450 million deficit requires cutbacks or, by implication, more taxes.
The problem in Maryland and in many other states and at the federal level is that spending has outstripped income. When the recession hit, the programs continued while revenue decreased. As income declined, Maryland hired 6,500 new workers and the legislature authorized $500 million in new spending.
The average Maryland taxpayer now sees 45 percent of his gross pay removed for some tax or program. The leading employer in the state is government - federal, state or local.
Some states are responding to this vicious tax-and-spend cycle.
The real Massachusetts miracle did not occur under former Gov. Michael Dukakis. It is occurring now under Gov. William Weld, who has erased the fiscal year '91 $850 million deficit and, working with the legislature, has
closed the fiscal year '92 $1.8 billion deficit, all without raising taxes.
How did he do it? He cut spending. According to Moody's Investor Service, Massachusetts is the only state where actual fiscal outlays are down and where, due to a better business climate, revenues are beginning to increase.
Too many lawmakers don't understand that high taxes stifle growth and ultimately reduce revenue.
New Jersey Gov. Jim Florio doesn't understand it. His $2.3 billion tax increase led to a $1 billion deficit last year.
New York Gov. Mario Cuomo doesn't understand it. Cuomo has raised taxes $1 billion each year since 1989, and in 1992 his state faces a $6 billion deficit.
Protesters Saturday demanded that government begin to privatize. The Mercer Group, an Atlanta consultant, has surveyed 34 states and found that virtually all had contracted out a minimum of three government services. Savings from privatization ranged from 10 to 40 percent.
While the Soviet Union and even the welfare state of Sweden are moving away
from powerful central governments, our federal government and many states continue with bigger, more expensive and inefficient governments.