Maryland's continuing budget woes could mean that the state's 75,000 employees will have to go without a general salary increase for the first time since 1984.
Both Gov. William Donald Schaefer and a legislative advisory committee said yesterday in Annapolis that a possible pay increase for state workers next year has been put in jeopardy by a growing shortfall in the current budget and weak signs of economic recovery ahead.
State workers have received a 4 percent pay increase annually for the past three fiscal years. In the past 15 years, they have not gotten raises only three times -- in 1977, 1982 and 1984.
Asked at a State House news conference in Annapolis whether he will propose wage increases for state employees in his forthcoming budget, Schaefer replied: "My answer is, we're all lucky to have a job."
Schaefer said he is aware of rumors circulating among state workers that he may order layoffs or furloughs to cut costs. He said that, although he has made no such decisions, he may consider taking such extreme measures.
"If the [downward] economic trend continues," he said, "we may have to think about it." Schaefer said layoffs and furloughs would be undertaken only as a last resort to save money.
Facing a financial shortfall in the current budget that could exceed $300 million, a legislative advisory committee yesterday recommended that next year's budget be capped by no more than a 5.1 percent spending increase, bringing the state's budget -- excluding federal money and capital spending -- to about $8.5 billion.
The recommendation, endorsed by the Spending Affordability Committee as a guide for the governor's proposed budget, contains no funding for salary increases. Nor does it include any funds that would be generated through revenue measures to be proposed by the governor's Linowes Commission, a controversial panel set up to restructure the state tax system.
Del. Charles J. Ryan, a committee member who also chairs the House Appropriations Committee, said additional money for state workers could be found if programs were cut from the budget. But, he added, cutting programs would mean taking money away from the needy.
"This should be the last place you look for program reductions," said Ryan, D-Prince George's.
State Sen. Laurence Levitan, D-Montgomery, who co-chairs the Spending Affordability Committee, said it will be up to the governor to propose salary increases for state employees.
"These are not happy days," added Levitan, who chairs the Senate Budget and Taxation Committee.
Despite the continuing bad budget news, leaders of state employee unions say they plan to fight for pay raises. At their summer convention, public employee unions called for a 15 percent pay increase. Although sobered by grim economic forecasts since that meeting, unions still want higher pay, according to Allen Gaddis, legislative liaison for the Maryland Classified Employees Association.
The Spending Affordability Committee, which consists of elected officials and three other citizens, was established in 1982 to recommend levels of state spending above the previous year's budget. The increase usually is tied to the growth in personal income.
Even with the group's approval of a 5.1 percent increase in the budget, the proposed cap will be about $145 million above estimated revenues projected by legislative analysts, according to Ryan. Committee members said they approved the higher budget cap in case revenues increase.
Charles L. Benton Jr., Schaefer's chief budget expert, said the panel's recommended cap is too low because the legislative financial projections are unrealistically gloomy.
The governor's budget department has been predicting that the current shortfall will be about $180 million, considerably less than the projections offered by the legislative advisers.