Tax rise urged to avoid layoffs Legislators agree job cuts needed

December 07, 1990|By William Thompson and Thomas W. Waldron | William Thompson and Thomas W. Waldron,Evening Sun Staff Melody Simmons, Timothy B. Wheeler and Laura Lippman contributed to this story.

State workers, environmentalists and advocates for the disadvantaged called today for tax increases to avoid massive layoffs and deep program cuts proposed by Gov. William Donald Schaefer.

Legislative leaders, however, say tax increases are unlikely and they agree with Schaefer that the $243 million deficit will force layoffs and deep program cuts.

"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 could not say how many state workers would have to be laid off to solve the shortfall announced yesterday by state budget analysts.

Schaefer said he favors laying off 1,800 state workers Jan. 1 to bridge the growing gap between state revenues and expenses. He said he does not support increasing taxes. But Susan P. Leviton, attorney and president of Advocates for Children and Youth Inc., said today that the state must consider new taxes.

"I do think we really have to look at our tax structure and I'm concerned no one's talking about that," Leviton said. "We can rearrange some things we do, but I don't think we can withstand cuts. It will affect programs. It has to."

And Joan Willey, state conservation chair for the Sierra Club, vowed today to fight cuts in the state's parkland program, known as Program Open Space.

"It's for parks in the state. That's our inheritance for ever after," Willey said. "I'd rather have an additional tax than have him raid Program Open Space."

Schaefer yesterday 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 programs such 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, a major cut in the state's parkland purchase program, 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, 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 legislators on many issues, is now asking them 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 the proposed layoffs would 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 the five plans he outlined to balance the budget includes a tax increase.

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