Localities reeling from state aid cuts County leaders unsure how to deal with loss of another $142 million.

December 11, 1991|By Department of Budget and Fiscal PlanningFrom staff reports Staff writers Bruce Reid, Michael A. Fletcher, Larry Carson, Norris P. West, Jay Merwin and Monica Norton contributed to this story.

With their budget year almost half over, local government leaders say they don't know how they will deal with the governor's proposal to cut more than $142 million in aid to cities and counties.

Their ability to raise new revenue is curtailed because, for the most part, local governments raise money through property taxes or the state's piggyback local income tax.

In Baltimore, the news of a proposed $13.3 million cut -- more than double that anticipated -- left city officials at a loss.

"I don't have an idea what we are going to do," said Edward J. Gallagher, the city's budget chief. "God, that was a shock. We had no idea that it would be this much."

News of the cut comes as the city is still reeling from a $27 million reduction in state aid ordered during the last round of budget cuts.

That reduction caused Mayor Kurt L. Schmoke to announce plans to close five firehouses, shut library branches, furlough teachers and lay off more than 100 city employees.

Gallagher said he is preparing a list of possible cuts in city services for Schmoke to choose from.

"The problem is that there is not much left to cut," Gallagher said.

For his part, Schmoke said he will hold off making specific decisions until he sees if the General Assembly will come up with its own plan to deal with the issue.

"We need a statewide solution, not just a Baltimore City solution," he declared.

Baltimore County administrative officer Merreen E. Kelly briefed the County Council on the new cut during a work session late yesterday. "This is a very, very serious matter," he said, adding that he would be in meetings today to figure out what to do.

He added that besides a loss of $52 million in state aid this budget year, county tax revenues are now $15 million under projections.

Morris Barrett, president of the Baltimore County Classified Employees Association, said, "I still feel fairly confident" about County Executive Roger B. Hayden's assurances that his efforts are aimed at preventing layoffs of county workers.

Anne Arundel County Executive Robert R. Neall last week said he was anticipating $8 million to $10 million in new cuts from the state and thought the county could handle them. However, Schaefer has proposed a $14.9 million cut.

"Bobby was very surprised by the larger amount the state allocated," said Neall's spokeswoman, Louise Hayman. "He believes the amount assigned is larger than it ought to be."

Hayman said Neall is concerned about the state's Medicaid crisis and its impact on local governments. "Until the Medicaid issue is resolved, the county will continue to bear the brunt."

Neall was to meet today with his Cabinet to discuss budget changes that would minimize the impact of the cuts. The county already has seen a $20.8 million reduction in state funds.

In Carroll County, commissioners had announced a budget-cutting strategy Oct. 31. But the governor's proposal -- a $3.7 million cut -- is more than triple the amount they were prepared to absorb.

At that time, the commissioners cut $3.2 million from the county's $115 million operating budget.

They had planned to apply $1.2 million of those savings to the next round of state cuts, which were announced yesterday. But because the county will take a bigger hit than they had expected, they must start the budget-paring process again.

"There's no county that wasn't surprised today by the level of reductions," said Steve Powell, Carroll's director of management and budget.

He said he and his staff expect to begin looking for new ways to reduce spending today, present a plan the commissioners by the end of the week, and have the decisions made by the end of the month.

Carroll has so far avoided laying off personnel or forcing them to take unpaid furloughs. But now, Powell said, "All that will be an issue to be discussed."

Harford County Administration Director Larry Klimovitz said officials would need time to determine where $5.1 million in additional cuts can be made.

"We may wind up going into our fund balance," he said, referring to the county's $9.8 million budget surplus from fiscal 1991.

He said the county's first priority is avoiding layoffs.

The county administration already has undertaken a number of cost-saving measures, including hiring and wage freezes, community college tuition increases and energy conservation steps to deal with $6.4 million in state cuts earlier this year.

Howard County Executive Charles I. Ecker, who last month announced a budget-reduction plan that included five-day furloughs for employees and reduced trash collection, called the proposed loss of an additional $8.2 million "devastating."

The county already had been hit by a $7.9 million reduction in state aid earlier this year.

"Another $8 million on top of the $8 million cut a couple of months ago will mean that services will be reduced or eliminated," Ecker said. "Everything's open. Education is going to take a hit -- the community college, fire and police department."

He said he already has warned the county's superintendent of public schools, Michael E. Hickey, of impending cuts to his budget.

Meanwhile, Ecker said he also planned to meet with the county's legislative delegation to try to persuade them to soften the blow of these cuts and come up with a plan to avoid more of the same next year.

Local cuts

Here is the latest round of cuts in local aid proposed by Gov. William Donald Schaefer and the total cuts in local aid this year if the proposal is approved. All figures are in millions of dollars.

Jurisdiction Latest Total

Anne Arundel .$14.9 $32.1

Baltimore .. ..13.3 .30.0

Baltimore Co. .23.4 .51.0

Carroll .. .. ..3.7 ..8.0

Harford .. .. ..5.0 .11.2

Howard .. .. .. 8.2 .16.1

Statewide .. .142.5 325.5

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