Deficit-reduction proposal lessens state aid cuts Furloughs still likely, local officials say

February 13, 1992|By John W. Frece | John W. Frece,Annapolis Bureau

ANNAPOLIS -- The speaker of the House yesterday proposed a deficit-reduction plan for 1992 that would cut state aid to local governments by $88.5 million.

That's far less than the $142.5 million cut that Gov. William Donald Schaefer has proposed, but local officials said it's still likely to mean more furloughs for government workers and more reductions in spending for schools and other services.

The best thing they could say about the plan was that they now have a better idea of how much they'll have to trim from their respective budgets before the current fiscal year ends June 30.

"It's a question of, 'Are you going to die by a quick bullet or be nipped to death?' " said Prince George's County Executive Parris N. Glendening. "Now, we're literally bleeding to death."

David Bliden, executive director of the Maryland Association of Counties, said the only truly acceptable figure for reducing local aid would have been "zero," but he added that the counties knew they would have to share in the state's deficit reduction.

"It'll be painful. It'll require some significant adjustments, but counties have already started," he said.

The plan developed by Speaker R. Clayton Mitchell Jr., D-Kent, and now backed by Mr.Schaefer, anticipates a fiscal 1992 deficit as high as $270 million.

It would eliminate the deficit through four major actions:

* An $88.5 million cut in state aid programs for Baltimore and the 23 counties. Mr. Schaefer had proposed a plan in December that called for $142.5 million in local aid cuts, a figure rejected by legislators and local officials as too high.

* Moving $80 million from the state's Transportation Trust Fund to the general treasury, probably money from the state's corporate income tax that was shifted into the transportation fund years ago. Legislators and Schaefer administration officials said such a transfer would make a gas tax increase almost unavoidable.

* Another $41.8 million would be cut from state agency budgets, a figure that includes savings from the five unpaid furlough days that Mr. Schaefer announced in December and which most state agencies have already begun to implement.

* About $50 million would be transferred from the remaining balances in several state funds set up to buy parkland, preserve farmland, or provide a "rainy day" cushion.

Under the speaker's revised plan, Baltimore would lose $8.3 million in state aid, compared to $13.3 million under the governor's original plan. Baltimore County would lose $14.6 million, down from the $23.5 million proposed in December.

Anne Arundel would take a $9.2 million cut, down from $14.9 million.

Carroll County would lose $2.3 million; Harford County, $3.1 million; and Howard County, $5.1 million.

Henry Bogdan, Baltimore's lobbyist, said the city had hoped the cuts could be reduced to $65 million overall.

The speaker's plan would mean more furloughs of city workers and cutbacks in city services, Mr. Bogdan said, adding, "We'll do it with the least damage to basic services as we can."

The biggest loser would be Montgomery County, which would lose $15.5 million in state aid.

Montgomery would have lost more under the plan's strict formula, but Mr. Mitchell and the governor agreed to cap the county's cut at $15.5 million.

Edward J. Kasemeyer, Montgomery's lobbyist, said County Executive Neil Potter has reviewed the speaker's plan and will support it.

But he said the county is still likely to order workers to take more unpaid furloughs, and that the school budget could be trimmed by another $4 million.

Sen. Laurence Levitan, D-Montgomery, chairman of the Budget and Taxation Committee, said, "I would tend to go along with" the plan.

Other senators, however, said there was some resentment to the idea of protecting Montgomery County -- one of the wealthiest counties in the nation -- from absorbing its full share of the cutback in state aid.

"That caused us some concern, but I believe that can be worked out," said Sen. William H. Amoss, D-Harford.

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