Legislators evade fiscal compromise Local aid package stymies progress

April 04, 1992|By John W. Frece | John W. Frece,Annapolis Bureau

ANNAPOLIS -- Unable to agree on taxes, Maryland lawmakers shifted their attention back to the state budget yesterday, hoping they can at least get that approved before the 90-day session expires at midnight Monday.

But even that effort fell apart last night.

House and Senate conferees on the budget abruptly decided there was no sense in meeting because the House wanted nearly $50 million in appropriations for expanded local aid programs, while the Senate conferees did not.

The aid would include a $30 million grant to Baltimore and five poor rural counties, and would provide $17 million to finance educational placements for disabled students.

The dispute, however, was not over what the money would go for, but rather over how the money would be raised.

With the additional appropriation, a $250 million tax bill would have to be pushed through in the final days of this contentious legislative session. Without it, only $200 million in taxes would be needed to balance the budget.

"The only thing for us to do is move our [$200 million] package," said Senate Budget and Taxation Committee Chairman Laurence Levitan, D-Montgomery.

"It is not as big as the House package, but it'll do the job."

With time running out and a Senate filibuster on taxes increasingly likely, senators, delegates and aides to Gov. William Donald Schaefer also began to seriously consider the likelihood that the budget for next year may have to be balanced without the luxury of any new revenue from higher taxes.

To avoid an extended session, the $12.5 billion spending plan for the fiscal year that begins July 1 must be enacted by day's end Monday. But without the $200 million budget-balancing tax package, the two houses would have to agree on a substitute list of nearly $200 million in additional budget cuts -- the legislature's scaled down version of what Governor Schaefer called "a doomsday budget."

"Unfortunately," conceded Mr. Levitan, "it could be a 'doomsday' scenario . . . I'm not a happy camper."

The budget conferees got back together yesterday afternoon after refusing to meet with each other all day on Thursday. They quickly narrowed their original list of $70 million in differences to just a handful of items.

Final compromise on those issues seemed clearly within reach, and the conferees were expected to meet again last night to finish their work.

Then this latest dispute arose, pushing off further negotiations until today.

Even if the conferees agree, they would send a budget back to the full House and Senate with only three days remaining in the session.

That would allow the separate tax conference committee to begin working on a compromise budget-balancing tax plan.

Last night, however, House conferees said they could not pass a tax plan without the local aid programs that assure certain votes; and Senate conferees said they couldn't pass a plan containing programs that require higher taxes.

"Hopefully we can get this impasse broken sometime today or tomorrow," House Speaker R. Clayton Mitchell Jr., D-Kent, told members of the House yesterday afternoon. "If not, 'doomsday' may go into effect."

"A lot of you may be happy about that," he added.

"Let me tell you one thing: If it sets in, your constituency out there is not going to be happy with you. There's only one thing the Constitution says we do when we come down here. That's pass a budget. Let's keep that in mind."

Exactly what would happen if a "doomsday" budget cut goes into effect is unclear. In his initial budget request, Mr. Schaefer filled a $700 million gap between revenues and expenditures with a $700 million "doomsday" list of cuts that would have all but eliminated several departments and made deep cuts in a broad array of state education and social services programs.

But the House and the Senate have already agreed to cut about $500 million in spending, leaving only $200 million to be filled with either revenue from higher taxes or further cuts.

The House version of the budget contains a "doomsday" list that would close the state mental hospital in Crownsville, close most state parks, cut $44 million in aid to education, cut another $36 million in police protection aid, and $30 million in Medicaid funds.

But that unappetizing list was put together largely to pressure lawmakers into voting for the companion tax increase instead.

Now that it appears the tax increase may not happen, the legislators are talking about revising the doomsday list -- which, in the black humor of the legislative staff, is now being called the "Armageddon" amendment -- to include spending cuts that, if necessary, they can live with.

Democratic leaders in the House, bitter that the General Assembly finds itself in this end-of-session predicament largely because the House's Republican minority has taken such an unbending no-new-taxes stance, now are looking for ways to pin any doomsday result on the Republicans.

When the budget was considered by the full House, Republicans offered their own doomsday list as a substitute for the one that was then already a part of the House version of the budget.

They argued passionately for it, but lost.

Now, Democratic leaders are considering giving the Republicans what they asked for: Their own list of doomsday cuts.

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