Lawmakers work on plan to solve budget problems Spending cuts, taxes both likely

November 06, 1991|By John W. Frece | John W. Frece,Annapolis Bureau of The Sun Ginger Thompson of The Sun's metropolitan staff contributed to this article.

ANNAPOLIS -- Legislative leaders laid the preliminary groundwork yesterday for what they hope will be a collaborative VTC effort with the governor to develop a comprehensive tax and spending plan to extricate Maryland from its seemingly endless budget problems.

Although discussions are still in the tentative stage, key lawmakers said they expect to hold as many as three hearings around the state to gather public opinion on spending priorities and tax concerns. They then hope to meet with Gov. William Donald Schaefer to develop a proposal that would be considered by the 1992 General Assembly.

Mr. Schaefer said yesterday that he would be willing to work with the legislators. "No question," he said. "If they have a plan, I'm for looking at it. I'm absolutely for working with them."

Whether the final plan will focus mostly on proposals to increase taxes, or to cut more deeply into spending, or some combination of the two remains to be seen. But House Speaker R. Clayton Mitchell Jr., D-Kent, said yesterday that there was "sentiment for a balanced plan" to contain both tax increases and spending cuts after meeting with the presiding officer of the Senate and fiscal leaders from both houses.

The legislature has recently completed a several-months-long study of state expenditures and revenues, and a condensed, executive summary of that report is expected to be available next week. Mr. Mitchell said the document will be used as the basis of hearings tentatively set for late November in Annapolis and possibly in Baltimore and Prince George's County.

Early next month, the state's Board of Revenue Estimates is expected to give the governor the official estimates Mr. Schaefer will use in preparing his fiscal year 1993 spending plan. Only then, after soliciting public opinion and understanding the extent of the state's financial problems, can a proposal be put together, said Mr. Mitchell.

Already in the current fiscal year, which began July 1, the state has been forced to trim spending by $446 million. It faces an additional deficit now estimated at $150 million. The cut in spending required to eliminate that shortfall will be the sixth major reduction in the past 18 months.

Budget advisers to both the governor and the legislature say the problem in fiscal year '93 could be even worse, especially if the economy does not improve. A $700 million deficit is now estimated, assuming the governor submits a spending plan that includes a pay raise for state employees, inflationary increases in the cost of government and certain mandated increases in spending.

"I think the bottom line is that what we really need is one big cooperative effort between the legislature and the governor and really even the counties," said Sen. Laurence Levitan, D-Montgomery, chairman of the Budget and Taxation Committee. "I guess we're starting to see if we can put that together."

Mr. Levitan said he believes the legislature should begin working with the governor to develop a plan immediately rather than waiting until after the revenue estimates are released next month.

And while he agreed that early public hearings are necessary, he noted that the public will not have many specifics on which to comment.

"It just gives people a chance to vent whatever they want to vent, because there aren't proposals. Our findings aren't proposals; they are generalities," he said.

Much of the impetus for hearings has come from Baltimore advocacy groups concerned about the cumulative effects of round-after-round of budget reductions.

Baltimoreans United in Leadership Development (BUILD), a coalition of community and church leaders that has lobbied for equity in education funding, recently enlisted the support of most of Baltimore's state legislators to study the budget crisis and make proposals to assure adequate education and health funding.

The group, counting on the public hearings to voice their concerns, persuaded Mayor Kurt L. Schmoke to host a hearing in Baltimore at the city's expense, making it easier for city residents to attend.

"It is important that we have input now, because now is when all the deals are being cut, behind closed doors," said Gary Rodwell, BUILD's lead organizer.

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