As the General Assembly wraps up its work on the FY12 operating budget, one fact is painfully clear from the 2011 legislative session: Gov. Martin O'Malley failed to provide the leadership required to correct the budgetary course of state overspending that is so badly needed to resolve Maryland's fiscal crisis.

The budget is severely underfunded. The non-partisan Department of Legislative Services has identified over $500 million of potential shortfalls and deficiencies in the $14 billion budget. Moreover, the proposed cash balance will be less than $50 million - a razor-thin margin that is lower than it has ever been.

The bottom line is that O'Malley and the Democrat leadership have kicked the can down the road until October.

Why October?

Yes, the budget that begins on July 1 will likely be in the red by October. More conveniently, however, is the fact that it is necessary for the General Assembly to meet in a special session this fall in order to adopt a new redistricting plan for Maryland's eight congressional districts.

Since the General Assembly is already in session - then why not raise taxes?

It is an O'Malley déjà vu. It will be the 2007 special session all over again. (click here)

This is the wrong path to take. Maryland should be addressing the problems of billion dollar structural deficits by attacking the spending side of the equation. 

In "Maryland's Fiscal Slide" (in The Maryland Journal Vol. 2011, published by The Maryland Public Policy Institute - click here), Eileen Norcross traces Maryland's fiscal policy since 1979. She describes how the downward spiral has steepened as O'Malley has cobbled together quick fixes over the last five years instead of strategically restructuring the budget. She summarizes:

"Maryland's fiscal slide offers an interesting case of not only how spending restraints may be evaded but also of how restraints and budget rules only superficially suggest fiscal discipline, and may in fact give cover to fiscal profligacy. Institutions meant to constrain spending have evolved according to a political logic sustained by gamesmanship. The result is that Maryland has grown its budget beyond what the state can support without more drastic reductions in spending or significant tax increases."

But attacking overspending is just too hard for Democrats in Maryland to conquer. There are too many special interest groups that would be offended and would withdraw their political and campaign support. That is especially threatening if you are a Governor aspiring to national office or a legislator eyeing up statewide races.

October will be the cruelest month for taxpayers checkered by red ink as Maryland Democrats hunt for tax increases and new fees - and thus satisfy their voracious budget appetite.