Shelve program to build offices, legislators urged

November 21, 1990|By William F. Zorzi Jr. | William F. Zorzi Jr.,Sun Staff Correspondent

ANNAPOLIS -- Amid predictions that the economy will worsen, legislative budget analysts recommended yesterday that Maryland forgo plans next year to replace leased office space in Baltimore with a new $200 million state office complex.

The analysts, in a written report to the General Assembly's joint Spending Affordability Committee, urged the legislature not to borrow the $200 million for the buildings because of the "general deterioration of the state's fiscal condition."

However, Charles L. Benton Jr., the state secretary of budget and fiscal planning, cautioned legislators not to be hasty in putting off such a program. By making the one-time loan, the state could save money now spent to lease space while acquiring long-term assets.

In seven months, when the next fiscal year begins, the economy may be "better . . . on the buy side," Mr. Benton told the committee.

H. Furlong Baldwin, chairman of Mercantile Bankshares Corp. and one of four citizen advisers to the affordability committee, asked Mr. Benton, "What's your hurry? Why not wait?"

Mr. Baldwin said he believed the economy would continue its downward slide and the state may be in yet a better position in 19 months, at the beginning of the following fiscal year, July 1, 1992.

Mr. Benton politely differed with Mr. Baldwin's assessment, saying that 19 months may be too far away to speculate on the real estate market. The budget secretary said his office would be making a formal recommendation and presentation on the issue in the near future.

Meanwhile, Mr. Benton went on to revise upward -- from $110 million to about $200 million -- his office's estimates of the state's revenue shortfall in the current fiscal year, bringing it more in line with estimates by the legislature's analysts.

The administration's revised estimate, coupled with an anticipated budget deficiency of about $69 million, brings the state's total deficit for the current year to $270 million, according to Mr. Benton's estimate.

That figure is now closer to the legislative budget analysts' estimate of $313.5 million deficit, revised yesterday from an earlier $322 million estimate.

Despite the narrowing of the estimates, however, Mr. Benton continued to maintain that the legislative analysts' predictions were "overly pessimistic" and "overly cautious."

Saying that the administration has taken "drastic steps" to reduce the current year's "business-as-usual budget," Mr. Benton told the committee he expected Gov. William Donald Schaefer to send to the legislature in January a new budget that will not call for more spending than this year's already trimmed budget.

He also said the Schaefer administration did not currently intend to submit a budget for next year based on possible revenue generated by recommendations in a report by the Commission on State Taxes and Tax Structure, commonly known as the Linowes commission, after its chairman, R. Robert Linowes.

But Mr. Benton said, "I don't think the affordability committee should preclude consideration of [the] Linowes [commission report]," in setting a spending cap at its meeting next week.

In making his report to the committee, William S. Ratchford II, director of the legislature's Department of Fiscal Services, also recommended that no new state jobs be created except to run new state facilities, and that an increase in taxes only be sought as a last resort. He also told legislators not to count on any increase in federal funds.

Mr. Ratchford and his aides said a recent legislative audit indicates the state's current financial problems actually began in fiscal year 1990, but the extent of the problem was then "understated" by the Schaefer administration.

Instead of the $4.6 million end-of-year surplus the administration reported, legislative auditors said the figure should have been $41.1 million lower -- or actually a deficit position.

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