Schaefer moves to deal with newest deficit

November 01, 1991|By John W. Frece | John W. Frece,Annapolis Bureau of The Sun

ANNAPOLIS -- Gov. William Donald Schaefer said yesterday that he has no intention of asking the legislature to raise taxes to eliminate the state's newest, $150 million budget deficit, saying in the clearest possible terms that he has "heard the word" from Maryland citizens and understands they do not want their taxes raised.

But with no new revenue in the offing, and the economy stagnating in a recession that refuses to end, Mr. Schaefer embarked on a "New Deal"-type tack to stimulate the economy by expediting the start of as many already-approved government construction projects as possible.

The effort will concentrate on projects already in the pipeline in the areas of transportation, higher education, prisons, sewer and water, and general state construction. Aides said they hope to cut the delay between the time a project is authorized and a contract is awarded. Special emphasis will be placed on projects that could create the most jobs, they said.

"The bottom line is, these are projects that create a lot of jobs and buy a lot of goods and services -- steel, concrete, ceiling tiles, block, asphalt, things like that -- all of which are going to be created or bought sooner or later," said Mr. Schaefer's staff chief, Paul E. Schurick, whom the governor credited with coming up with the idea. "What we're trying to do is create them sooner [and] get the money on the street sooner."

The governor said he hoped the action would reverse a statewidemood he described as pessimistic.

"We're going to put Maryland to work and we're going to use the expression, 'Stop crying and start sweating.' "

Whether or not the idea works, the governor declared at a State House news conference: "I'm not going to ask for any taxes. I am under the mandate from the public and from the legislature and from everyone: No new taxes. So, as far as I'm concerned, we'll do with what we have, live within what we have and what we don't have."

What that means, the governor warned, is that many of the same government programs that narrowly escaped elimination as part of a $446 million round of budget cuts completed in October will again be put on the chopping block.

Among the targets: what remains of the General Public Assistance program for the disabled, jobless poor; basic education programs for state prison inmates; State Police personnel; Medevac helicopter service, and drug and alcohol treatment programs.

Deeper cuts into state aid programs that directly benefit Baltimore and the 23 counties would be impossible without additional legislative authority, although some grants that pass through to local jurisdictions from state agencies such as the health department could face further reductions.

Frederick W. Puddester, the governor's deputy budget secretary, said if Mr. Schaefer is forced to cut the current year budget by another $150 million without authority from the legislature to tap into mandated programs protected by statute, the cuts will be unavoidably deeper than those originally proposed a month ago.

Mr. Schaefer said that he understood the prevalent "no tax" sentiment in the public, saying he pays personal income, sales and real estate taxes just like everyone else.

Yet at the same time, the governor said, his job is to watch out for all of the people, including the poor, and he said he worries about the "lack of compassion" of those who would rather see social programs cut than endure higher taxes.

"They feel they have done enough, that everybody should fend for themselves, and that's a natural reaction. I understand that," the governor said. "But then there's the other side, that somebody has to look out for the people."

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