Local governments hit in the budget, again

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.

Although officials knew more cuts were inevitable, the proposed reductions in state aid to cities and counties shocked local officials, who scrambled to renew their pleas for higher state taxes.

"This is absolutely devastating," said a subdued Mayor Kurt L. Schmoke, who learned that the city faces the loss of another $13.3 million in state aid.

"We're way past the point of cutting fat. We're into the bone," he said minutes after leaving Schaefer's office.

Schmoke and other officials quickly called for the legislature to support an increase in state taxes or face a deterioration of government services.

"We're ruining the quality of life in this great state . . . ," Schmoke said.

Parris N. Glendenning, the Prince George's County executive, called the Schaefer plan "absolutely unacceptable" and said the proposed cuts to local aid were "much worse than anticipated."

"It is government by crisis," he said.

State employees -- including Schaefer himself -- would be asked 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 before talking to reporters in Annapolis. The governor said he wants a response from the legislature on his plan by the end of a week.

Schaefer, appearing relaxed as he sat on the corner of a conference table outside his State House office, said he expects the economy to continue in poor health and predicted a seventh round of budget cuts in the spring if state revenues do not pick up.

"Quite frankly, I don't think people are being convinced yet that we are having a tough time," he said.

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.

As part of the governor's plan, state agencies must absorb $25 million in cuts. Another $26 million in state capital projects will be postponed, including about $6 million set aside for Program Open Space, which helps local governments purchase undeveloped land for parks and recreation.

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, although a smaller number of employees has actually been fired.

The governor, once an ardent opponent of employee furloughs, proposed them today because he has so few options to balance the budget, aides said. The saving from furloughs is difficult to determine, but Schaefer's budget analysts estimate that $16.5 million could be saved if state workers take from one to five days off without pay.

Schaefer said today that 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 and other constitutional officers who earn more than $50,000 a year 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 obligation will have to be "rolled over" into fiscal 1993, which begins July 1.

Local governments are to be hit hardest by Schaefer's plan, facing $142.5 million in cuts.

That is tough news for local governments, which 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 that with the state unable 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 legislative approval.

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

Local Cuts

These are cuts in aid to local governments proposed by Gov. William Donald Schaefer today. Totals are in millions.

Anne Arundel .. $14.9

Baltimore City ..13.3

Baltimore County 23.5

Carroll .. .. .. .3.7

Harford .. .. .. .5.1

Howard .. .. .. ..8.2

Montgomery .. .. 25.0

Prince George's .21.2

Statewide .. ..$142.5

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