5-day state furloughs likely Localities are likely to take a big hit in new round of cuts.

December 10, 1991|By William Thompson | William Thompson,Evening Sun Staff

In the sixth and perhaps most painful round of budget cuts this year, Gov. William Donald Schaefer today unveiled a $225 million cost-reduction plan that includes more cuts to state services, sharply reduced aid to local governments and, for the first time at the statewide level, employee furloughs.

State employees -- including Schaefer himself -- may be required to take up to five days off without pay, under the proposal.

The governor briefed legislative leaders and county executives on the budget-balancing plan at private meetings in Annapolis.

Maryland's latest budget deficit was brought about by a sluggish economy that has slowed revenues and increased state spending on social services, particularly Medicaid.

Already, state officials have been forced to cut and shift about $1 billion from the $11.6 billion budget.

State House sources said the governor is proposing that state agencies absorb $20 million to $25 million in cuts.

Depending on how individual agencies decide to curb their spending, the proposal could mean cutting services to the public and possibly more firings. So far, about 1,500 state positions have been eliminated.

The governor, once an ardent opponent of employee furloughs, proposed them because he has fewer options to balance the budget, aides said. The savings from furloughs is difficult to determine, but budget analysts say the daily government payroll is $4 million to $5 million.

Lawmakers said today the number of furlough days will depend on the rank and salary of a state worker. The highest paid will have to take the most days off. Under the proposal, the governor would take five days off without pay.

Of the latest projected $225 million deficit, about $140 million is .. attributed to revenue shortfalls and the rest to Medicaid costs. Much of the state's unpaid Medicaid bills will have to be "rolled over" into fiscal 1993, which begins July 1.

The governor was expected to eliminate more than $20 million in capital projects. This includes about $6 million set aside for Program Open Space, which helps local governments purchase undeveloped land for parks and recreation.

Local governments were to be hit hardest by Schaefer's plan. Lawmakers who attended today's meeting said the proposal requires that $142 million -- more than 50 percent -- of the projected deficit be absorbed at the local level, including $13 million for Baltimore.

That is tough news for local governments, who saw state aid cut by nearly $200 million in October when the governor and legislators agreed on a package that trimmed $450 million from the state budget.

"We're very, very concerned," said David S. Bliden, executive director of the Maryland Association of Counties. "Governments are straining. We realize that we have to be a part of the solution, but we've already made drastic cuts."

Bliden said local governments, already dazed by previous budget cuts, have little flexibility.

"Those large cuts will have to be passed off to local constituents," he said, adding that education, police and fire protection and public works will suffer more than they have.

Bliden said with the state less able to provide traditional levels of financial aid, local jurisdictions may have to increase property taxes.

Except for the proposed agency cuts, nearly every item on the governor's cost-containment list requires approval of the legislature.

Asked today if he can support the governor's cost-cutting measures, Sen. Laurence Levitan, D-Montgomery, replied, "I doubt it."

Levitan, who chairs the powerful Senate Budget and Taxation Committee, said the hardest part of the proposal to swallow is the massive cut to local aid.

"It's a big hit to local governments," he said. "But I don't know what the alternative is."

For a week, a legislative panel has been holding public hearings across the state in an effort to gather public opinion about how the state raises and spends revenues.

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