Governor issues warning as cuts are made official State may face another round of budget-paring

October 19, 1991|By C. Fraser Smith | C. Fraser Smith,Maryland State Department of Budget and Fiscal Planning SUN GRAPHICSAnnapolis Bureau of The Sun

ANNAPOLIS -- Gov. William Donald Schaefer signed a $450 million budget-reduction bill yesterday that will cost more than 1,500 state workers their jobs, and he warned that another round of deep cuts may loom "in the near future."

In a "joyless" ceremony, Mr. Schaefer signed what he said was an ironclad script written for him and the General Assembly by the voters of Maryland.

"There is no other course we can take other than cutting employees and downgrading programs," the governor said.

Over the last year, Maryland has slashed more than $1 billion in state spending. Still, the taxpayers say that budget problems must be solved by increasing efficiency and downsizing government rather than raising taxes, the governor said.

Sales and income tax revenue continues to fall below levels projected when the budget was balanced last year -- thereby forcing the state to cut spending to keep the budget in balance as required by law.

"Are the budget cuts over? I don't think so. . . . If the sales tax falls off over Christmas, we'll have a very difficult time," Mr. Schaefer said.

The only good news, he added, came from a businessman he knows who said that recent toy sales have been promising.

House Speaker R. Clayton Mitchell Jr., D-Kent, said the new, deficit-driven spirit of cooperation between the governor and the General Assembly "is the greatest hope the people have."

Senate President Thomas V. Mike Miller Jr., D-Prince George's, said government has to find a way to regain its momentum as a promoter of higher education and to meet its commitment to secondary education.

"We have to regain the confidence of the people," he said.

What the people say is, "Look for the fat," Governor Schaefer said. As he has several times in recent days, the governor said people don't recognize how many cuts have been made already.

"There is no fat. The fat was removed long ago," he said.

If taxes are to be raised to save endangered programs, Mr. Schaefer said, taxpayers will have to give him "some sort of mandate." He said he will not utter the word taxes "until there's a feeling I get from people that they understand what I'm doing."

The bill signed yesterday, a compromise worked out with legislative leaders, spared subsistence payments to General Public Assistance recipients -- all 24,000 of whom would have been dropped from the benefit rolls under the governor's original proposal.

The welfare recipients and 54 state troopers were saved by transferring the burden of these cuts to local governments, which lost about $115 million under the governor's first plan and $183 million under the one signed yesterday.

Mr. Schaefer said he intends to watch carefully how local governments handle the cuts that now face them.

He said he wants to be certain the law's prohibition on reducing the number of classroom teachers is observed.

State budget cuts

The $450 million budget balancing bill signed yesterday by Governor Schaefer would cut state spending in the following areas:

* Aid to county and local government: $183 million

* Health: $50 million in all, including $34 million in in-patient hospital care for General Public Assistance recipients.

* Welfare: $22 million, largely in savings achieved by cutting family welfare benefits and General Public Assistance subsistence grants to the 1989 levels.

* Public Safety: across-the-board cuts, $31 million

* Higher Education: $50 million, mainly from across-the-board cuts at the University of Maryland; including a 25 percent cut aid to private colleges, which saves $7 million.

* State government administration: $35 million

* Delayed payment of Medicaid costs: $70 million

* Legislative and judicial budgets: $9 million.

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