Top state lawmakers, who were to discuss the state's growing budget deficit at a meeting today, say they agree with the governor that layoffs are inevitable.
"I think there will be layoffs," said Del. Charles J. Ryan, D-Prince George's, chairman of the House Appropriations Committee. "I don't see how you can get an additional $250 million out of the budget without doing very substantial damage."
Lawmakers, however, could not say how many state workers would have to be laid off to solve the $243 million budget shortfall announced yesterday by state budget analysts.
Gov. William Donald Schaefer said he favors laying off 1,800 state workers Jan. 1 to bridge the growing gap between state revenues and expenses.
The governor outlined five plans to solve the deficit, including one that would throw 12,800 state employees out of work. His proposals were prompted by gloomy revenue figures released by the Board of Revenue Estimates, revealing that the current year's budget would wind up $423 million in the red if no spending cuts were made. In addition to slumping revenues, the projected deficit is caused by $70 million in cost overruns in such programs as welfare and Medicaid.
Because Schaefer already cut $180 million from the budget last month, budget analysts say the deficit is now projected at $243 million.
In addition to layoffs, Schaefer's menu of options calls for a new round of spending cuts and a raid on the state's savings account. The proposals come in the middle of what budget officials say is Maryland's worst economic tailspin since 1982, the last time state workers were laid off.
Although the budget cuts are likely to hit most state agencies, two of Schaefer's favorite projects will be off-limits. The new baseball stadium in downtown Baltimore, for example, is being financed "off-budget" by special instant lotteries and will proceed as planned, state officials said. Likewise, the light rail line from Hunt Valley to Glen Burnie will not be affected by a drop in transportation revenues, state officials said.
The administration is proposing, however, to borrow some of the money that has been set aside for other building projects, BTC including Schaefer's proposed golf course for Rocky Gap State Park near Cumberland, and the revamping of athletic facilities at the University of Maryland at College Park. The borrowing will not stop the projects, but will mean the administration will have to ask the legislature to refinance them in future years.
Top lawmakers complained yesterday that the governor, after ignoring the legislature on many issues, is now asking lawmakers to approve plans that will hurt many people. Legislative approval would be required for most of the plans Schaefer outlined.
"I think it should be pointed out that only this year, when we face a deficit, are legislators called in to say how do we solve this deficit," said Senate President Thomas V. Mike Miller Jr., D-Prince George's. "We were never called in and asked how do we spend the money."
Miller agreed that layoffs were likely, but said there are other ways to cut spending.
"I think agency department heads have got to be encouraged to eliminate any and all fat budgets," he said.
William H. Bolander, director of the American Federation of State, County and Municipal Employees, a union representing state workers, predicted that calls for layoffs will shift sentiment among public workers behind the Linowes Commission report -- a controversial strategy to raise $800 million a year by restructuring the state tax system and increase some taxes.
"Naturally, we're very upset about this," Bolander said of the proposed layoffs. "We feel [the governor] is pushing the panic button on this."
Schaefer said he is not counting on the Linowes Commission proposal to solve the deficit, and none of his five proposals includes a tax increase.
Schaefer said the plan he favors would throw 1,800 employees out of work and cut agency spending by $33.9 million. That plan would require legislative approval for shifting some money from the state's $126 million "rainy day fund" as well as from budgets containing corporate income tax receipts and other state revenues.
The harshest plan calls for $242.6 million in state agency budget cuts and laying off an estimated 12,800 state workers.
Another plan calls for no layoffs but includes taking $126 million from the rainy day fund and diverting certain tax receipts away from transportation projects and into general spending accounts.
Schaefer said any layoffs would affect most state departments, but at least three will be immune from layoffs: human resources, public safety and corrections, and juvenile services.
Asked if the layoffs would be temporary, the governor replied: "They're layoffs, people who possibly will not be back to state service."
Among the state's 14 departments, the Department of Health and Mental Hygiene already has almost 6 percent of its 14,000 budgeted positions vacant because of the state hiring freeze. Spokesman Michael Golden said yesterday there are more than 800 vacancies in the agency, which took one of the hardest hits in the last rounds of budget cuts.