Legislators give Schaefer 'firm' proposal on budget

February 26, 1991|By John W. Freceand Peter Jensen | John W. Freceand Peter Jensen,Annapolis Bureau of The Sun

ANNAPOLIS -- Legislative leaders presented a "firm" and apparently final offer to Gov. William Donald Schaefer last night on how to get this year's budget back into balance, including plans to sacrifice the $7.2 million Rocky Gap golf course and convention center proposed near Cumberland.

The two sides said they were in agreement on most of the cuts proposed but agreed to disagree on the remainder.

"All in all, we're not far off," the governor said. The Rocky Gap golf course, he added, "would have led to a boom for Western Maryland, but I can't protect it anymore."

For several years, the Rocky Gap project has been viewed as the cornerstone of hard-pressed Western Maryland's hopes for economic recovery.

In search of almost $89 million to bring the current year's budget back into balance, legislators also recommended last night that about $4 million in economic development programs, including $1.5 million from the governor's business-enticing "Sunny Day Fund," be trimmed.

They suggested that another $6.4 million be transferred into the state treasury from uninsured penalty fees paid to the currently flush Maryland Automobile Insurance Fund, the state-run insurance fund for high-risk drivers. And they recommended that $3 million be trimmed from various state agencies, which could lead to layoffs or furloughs for state employees.

The changes, plus small reductions in several other state programs, were recommended by House and Senate leaders in response to a budget-balancing plan put on the table Saturday by Governor Schaefer.

Mr. Schaefer said he opposed any reductions to economic development programs and said state agencies "cannot stand any further cuts."

Although Mr. Schaefer said he remained opposed to several elements of the legislature's plan, it appeared that his hands were tied.

No further negotiations on this year's budget had been scheduled. It will be up to the legislature to enact the budget reconciliation legislation, and Mr. Schaefer will have no choice but to sign it or break Maryland's constitutional requirement for a balanced budget by vetoing it.

The governor wanted to cover a large chunk of this latest deficit by transferring into the general treasury $39 million from the $54 million remaining in the state's "Rainy Day Fund," a pool of money set up for just such purposes.

But the lawmakers, not wishing to deplete that fund just days before a meeting with New York bond rating houses, proposed instead to take only $28 million from the fund. That decision, however, meant they had to look to other programs to make up the difference.

The Rocky Gap project, a survivor of several previous rounds of budget cuts, was an obvious target.

It was proposed in 1988 by Governor Schaefer and steadfastly backed by him ever since as a key economic development tool that would draw corporate conventions, golf tournaments and tourists to the mountains of Western Maryland.

But administration officials and convention center developers were never able to line up the financing needed for the hotel portion of the project. While legislators authorized the use of state money to design a Jack Nicklaus signature golf course, they refused to allow it to be built without the convention center.

Last month, the governor trimmed $3.5 million from the golf course but thought he had still left enough in the project to get it completed if hotel financing could be arranged.

"I've tried my best. I can only do it for so long," Mr. Schaefer said.

Yesterday, after being officially informed by the state's Board of Revenue Estimates that this year's budget had again been thrown out of whack -- this time by $89 million -- by a continuing drop in state revenues, the legislature finally pulled the plug.

"We believe the state cannot continue to maintain an appropriation for this project in light of its fiscal problems," House Speaker R. Clayton Mitchell Jr., D-Kent, and Senate President Thomas V. Mike Miller Jr., D-Prince George's, said in a letter to the governor.

Delegate Casper R. Taylor Jr., D-Allegany, the legislature's most vocal supporter of the golf course project, said he was "skeptical" the governor would go along. "I'm still hopeful we can get it worked out," he said.

The legislature's proposal to reduce the budget shortfall also:

* Disallowed the administration's proposal to "roll over" $10 million in Medicaid bills until the next budget year.

* Cut $5 million from the state's share of "Open Space" program and $5 million from the local government share rather than taking $10 million solely from the local portion.

* Removed $2.5 million from the Department of Economic and Employment Development and $2.5 million from low-income housing programs. The administrationhad proposed taking all $5 million from housing.

Legislative leaders said Governor Schaefer initially rejected the Open Space decision, the cut in agency funding and the DEED reduction.

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