Maryland begins grim search for excess spending Leaders shun rise in taxes but feel little fat is left

September 03, 1991|By C. Fraser Smith | C. Fraser Smith,Annapolis Bureau of The Sun

ANNAPOLIS -- Determined to prove it is doing everything to balance its budget short of raising taxes, the Schaefer administration has embarked on a grim search-and-destroy mission with government fat as the enemy.

The exercise proceeds with the conviction that most of the fat is gone. Revenues are down and demand for government services is up. Yet, more than $700 million was cut from the budget in the fiscal year that ended June 30.

But the search for unnecessary spending goes on.

"We are working on the assumption that he [Gov. William Donald Schaefer] is going to balance the budget without [new taxes], because there aren't any," said Frederick W. Puddester, a deputy budget secretary.

After a decade of robust revenue growth and expanding government services, Maryland finds itself in the company of states whose gaping deficits seem to leave them no alternative but to reach for the taxpayers' wallets.

Seeing a need to explain this turnaround, state officials at every level are saying Marylanders don't fully understand why the deficit is so deep or just how important government services are -- if not to them individually, then to society as a whole. The same officials are painfully aware that many taxpayers don't buy the argument.

Mr. Schaefer tells of a letter he received recently from a Marylander who wrote that he was simply tired of paying for the care of society's casualties.

The man said he was suffering "compassion burnout," the governor lamented.

So, from a limited selection of spending programs -- many are shielded from the knife by federal or state law -- the trimmers must find at least $300 million that can be removed from the current budget and $700 million from the one being prepared for next year.

The national recession, a pullback of federal aid during the Reagan years, mandated health programs and other forces beyond the state's control are cited by state and county officials alike.

But their critics say imprudent spending practices adopted in the 1980s are equally responsible.

The debate over causes has less immediacy, however, than the approach to a cure.

"There's no question in my mind that entire programs will have to be terminated," Budget Secretary Charles L. Benton Jr. said at a recent Board of Public Works meeting.

Stopping short of layoffs for the moment, the state has recently taken these actions, among others:

* Every department has been ordered to devise a plan for cutting 4.25 percent from what it had been authorized to spend this year. The hope is to find at least $100 million during this process. Other targets will include aid to community colleges, a $25 million budget item, and the organizations that receive millions of dollars in specific state grants.

* About $97 million in flexible block grants to local governments could be reduced, and the major aid programs for public schools might also be in jeopardy. Only 25 percent of the local aid can be cut by the governor on his own. The remainder of that fund, plus the education aid, could be reduced only by the General Assembly, which could meet in special session to consider such an action this fall.

* Legislators are actively considering a proposal under which state education aid would be reduced while allowing counties to restore the cuts by imposing local taxes.

Since the wealthier subdivisions would profit most from a higher local tax on wealth, state Sen. Laurence Levitan, D-Montgomery, says he would promote long-term assistance for the poorer jurisdictions from what he called the common pot. Mr. Levitan says he already has had discussions on that subject with Baltimore Mayor Kurt L. Schmoke.

* Rather than approve a holdover contract for the state's vehicle emissions program, the state ordered preparation of a request for proposals in the hope that some enterprising vendor, hungry for business now, will have an idea for saving money.

* Recognizing that health care for the poor is its fastest-growing program, the state is hoping to reduce the number of low-birth-weight babies by requiring pregnant women to obtain prenatal care to remain eligible for benefits.

The average cost of treating premature infants in hospitals is $25,000, according to Nelson J. Sabatini, the secretary of health. A million dollars invested in prenatal nutrition programs saves many millions later because normal-weight babies do not require costly medical intervention.

Delegate Ellen R. Sauerbrey of Baltimore County, the Republican minority leader, agrees that major cuts have already been made in state spending. The issue now, she says, is the need to make government smaller, to redefine and restrict its role.

Leaving aside more radical redefining, critics of state spending patterns argue that prudent management would have saved states such as Maryland from the large deficits they now face.

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