Legal mandates permit governor little leeway when trimming budget

November 03, 1991|By John W. Frece | John W. Frece,Annapolis Bureau of The Sun

ANNAPOLIS -- With an $11.4 billion budget at his disposal, it would seem that Gov. William Donald Schaefer would have little trouble absorbing budget deficits of several hundred million dollars.

Just cut the fat, trim the waste, slash some programs.

But the increasingly obvious hard truth is that a Maryland governor has little flexibility when it comes to large-scale spending reductions. That is largely because most of the money the government spends is constitutionally mandated; or required court decisions or by federal or state laws; or involves functions that technically could be eliminated, but as a practical matter can, at best, only be reduced.

It is a complaint often aired by Governor Schaefer, who says his hands are tied when he goes to make up a new budget or is forced to trim an old one.

In good times, the amount of spending that is truly "discretionary" rarely involves more than a few hundred million dollars, maybe 1 or 2 percent of the overall budget, advisers to both the governor and the legislature agree.

In bad times -- that is, these days -- there is virtually no discretionary spending, and therefore few obvious targets for cuts. Absent the frills, the only things left to cut are basic services, and many of them are protected.

Deputy Budget Secretary Frederick W. Puddester says when he and other aides sit down with the governor to discuss budget-cutting options, he begins by telling Mr. Schaefer what he cannot touch:

* He starts by backing out about $2.2 billion in federal funds, most of which come with strings attached.

Then he deducts $1.8 billion in "special funds" collected from the gasoline tax and motor vehicle fees earmarked for transportation uses. Another $928 million is collected in college and university tuition and fees, but that money is recirculated to cover higher education costs.

That leaves the $6.5 billion "general fund" portion of the budget -- the part financed by income, sales and other state taxes and lottery revenues. But most of that money is off limits, too.

* The state constitution requires that enough money be budgeted to cover public debt (about $41 million in fiscal year 1992) and to pay for public schools from kindergarten through the 12th grade ($1.85 billion in fiscal year 1992).

In addition, the governor must include in his spending plan the budgets of the other two branches of government, the judiciary and the legislature, exactly as they are submitted to him.

By the time all that is set aside, only about $4.5 billion of the budget remains.

* State law then dictates that another $463 million be sent back to Baltimore and the 23 counties through various formula-driven state aid programs. The programs include: grants to help counties implement the "critical areas" Chesapeake Bay protection law; aid for police protection, primarily in Baltimore; money for local health programs, community colleges, fire, rescue and ambulance services; or to reimburse counties for property tax credits granted low-income homeowners and renters at the direction of the state.

The statutory mandates are one way legislators can set spending priorities in a budget in which they have no constitutional authority to raise appropriations or even transfer money from one program to another.

That shrinks the size of the pie to a little more than $4 billion.

* Then comes what Mr. Puddester calls "the big five": health, welfare, public safety, juvenile services and higher education. Together, they consume nearly $3.4 billion -- or more than half of the General Fund budget.

Theoretically, much of that money is not mandated, but in reality, the state has little choice but to spend it.

No law, for example, says the state must supplement university and college tuition and fees with huge outlays of tax revenues, but a collective policy decision was made years ago that tuition and fees alone cannot adequately finance quality educational institutions.

Similarly, no law stipulates how much the state must spend to run prisons or centers for juvenile delinquents. Yet the state cannot turn its back on criminals sentenced by the courts. About $314 million of a $554 million public safety budget was appropriated for prisons this year. Another $91 million was separately budgeted to deal with young people in trouble with the law.

The state spends more than $29 million a year for public defenders to provide legal services for the poor, again responding to a right guaranteed by the constitution.

"I always say there are constitutional, statutory and moral mandates," said Paul E. Schurick, Mr. Schaefer's staff chief. "Moral mandates, which are touchable by the governor, include such things as medevac helicopters, kidney dialysis programs, homeless programs or even prisons. There's no law on the books that says you have to fund it."

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