Schaefer asks local aid cuts, Md. furloughs New cutbacks forced as deficit grows $225 million

December 11, 1991|By John W. Frece | John W. Frece,Annapolis Bureau of The Sun

ANNAPOLIS -- Gov. William Donald Schaefer, forced to slash spending for the sixth time in 15 months, recommended yesterday unpaid furloughs for state workers as well as deep new cuts in local aid and ordered state agency budgets to be squeezed again.

Legislative leaders generally disapproved of the plan, but were virtually paralyzed by indecision and could not agree on anything to suggest in its place.

"This is reality," Mr. Schaefer said, referring to his legal responsibility to eliminate the $225 million deficit that developed in the two months since he and the legislature trimmed $446 million. "If there are not taxes, if there is no more money, I can't say, 'I won't do it.' I've got to do it."

The governor proposed cutting state aid to local governments, many of them in financial difficulty themselves, by another $142.5 million. Although Mr. Schaefer said he would leave it up to local officials to decide how best to absorb the reductions, the cut comes on top of $230 million axed from local aid programs in the previous five rounds.

"We're having government by crisis," complained Prince George's County Executive Parris N. Glendening. "Every two months we're gettingsome new figure. You can't operate schools, police and the fire department like that."

The size of the proposed cut for each jurisdiction was based on a complex formula related to the relative wealth of each jurisdiction, with a cap so that no jurisdiction would be cut more than $25 million. Baltimore's hit was $13.3 million; Baltimore County's nearly $23.5 million; Montgomery, the state's wealthiest jurisdiction, was the only one to be hit with the full $25 million.

Mr. Schaefer also proposed furloughing state employees without pay for up to five days during the six months remaining in this fiscal year. He has resisted furloughs in the past, saying they were short-term solutions that did little to address a long-term budget problem. But his aides said he was convinced this time that furloughs were preferable to firings, which may occur anyway if state agencies are cut again.

The furlough proposal is geared to salaries: the higher the income, themore days without pay an employee must take. Those earning under $20,000 would have to take only one day without pay; those earning between $20,000 and $30,000, two days; between $30,000 and $40,000, three; between $40,000 and $50,000, four; and $50,000 or above, five. Charles L. Benton Jr., the governor's budget secretary, said the state can save the most money from the furlough proposal -- about $16.5 million -- if the unpaid days are taken on state holidays rather than workdays.

Mr. Schaefer said the state constitution bars him from imposing furloughs on certain public officials -- the governor, lieutenant governor, comptroller, attorney general, secretary of state, legislators, judges and clerks of court -- but he said he intends to write letters to those officials asking them to participate voluntarily.

Mr. Schaefer said he intended to take five unpaid days himself.

Reaction to the furlough proposal from the two largest unions of state employees differed sharply. Bill Bolander, executive director of Council 92 of the American Federation of State, County and Municipal Employees, said state employees have suffered enough and vowed to fight to stop the furlough plan when it is considered by the General Assembly.

Michael P. McCusker, a spokesman for the Maryland Classified Employees Association, said it was "preferable to job terminations" and called it "a responsible approach."

The governor also proposed that an additional $25 million be trimmed from state agencies, which have already absorbed $899 million in cuts during the previous five rounds. The governor directed his Cabinet to report back to him next week on precisely where it believes those cuts can be made, but one budget adviser acknowledged the potential for hundreds of job terminations.

"We have cut state agencies so that many of them are at the brink of not functioning," Mr. Schaefer said.

The balance of the governor's plan calls for $26.5 million in capital expenditures to be delayed. The effect: Construction of a new Public Safety Training Center in Carroll County would be postponed until at least fiscal year 1994; most of the few funds remaining in farmland preservation and parkland acquisition programs would be siphoned off; and even some economic development loan programs, which Mr. Schaefer has stubbornly protected, would be trimmed.

He proposed that $15 million intended to replenish the state's empty "Rainy Day Fund" be used instead to help balance the budget. The money came to the state when Congress voted to uphold Maryland's controversial Medicaid "provider tax." Separate legislation requires Mr. Schaefer to place an additional $25 million into the "Rainy Day Fund," a gesture lawmakers admit is intended to show bond rating houses that the state intends to replenish its emergency fund as soon as possible.

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