General Assembly forced into extended session No budget at end of regular 90 days

April 07, 1992|By John W. Frece | John W. Frece,Annapolis Bureau Laura Lippman, C. Fraser Smith, Marina Sarris and David Conn of the Annapolis Bureau contributed to this article.

ANNAPOLIS -- Maryland's General Assembly failed last night to do the one thing its citizens expect of it: pass a budget for the coming year.

Paralyzed over whether to raise taxes, lawmakers ended the regular 90-day session at midnight without a budget agreement, forcing the legislature into its first extended session since the current process was set up in 1916.

During the extended session, the legislature is prohibited from considering anything but the budget. Without new taxes, that budget will have to be balanced with what's been called a "doomsday" list of $250 million in additional spending cuts.

The cuts could include major reductions in aid to education, local governments, medical care for the poor, state parks and a variety of other programs.

But once lawmakers have completed work on that plan, Gov. William Donald Schaefer said, he intends to call the Assembly back into special session to work again on a budget-balancing tax package to stave off the doomsday cuts, as well a $350 million capital construction program for 1993 that died with theregular session last night.

The governor, who is to address a joint session of the General Assembly at 1 p.m. today, said last night, "I'm optimistic. I think they'll come to a compromise."

Asked if he feared the legislature's failure to enact a budget could jeopardize the state's coveted triple-A bond rating, Mr. Schaefer replied: "Today, no. I think we're still all right. . . . [But] if we stay at doomsday, I have some doubts."

Senate President Thomas V. Mike Miller Jr., D-Prince George's, said, "We'll meet with the governor tomorrow and hopefully in two days we'll do what we should have been able to do in 90 days."

But House Speaker R. Clayton Mitchell Jr., D-Kent, said if the Senate had done what the House did -- pass a "responsible and balanced budget" -- the session would be over.

And he predicted that when the assembly reconvenes, "This house will do the responsible thing. We will do it. And we'll have to convince the Senate to do the right thing, too."

The session's last gasp actually came at 9:30 p.m., when the filibuster-threatened Senate voted 25-22 to kill a House proposal that would have raised $200 million in taxes to balance the budget, nearly $50 million more to pay for local aid programs (primarily for Baltimore and Prince George's and Montgomery counties), and a nickel-a-gallon gasoline tax that would have restarted the state's stalled road construction program.

The vote shifted the pressure to the House, which had possession of three Senate bills that could have served almost the same purposes.

"I think it's pretty clear that this bill is not going to pass and if we're going to be a budget tonight, it wil have to come from across the hall," Senate Budget and Taxation Committee Chairman Laurence Levitan, D-Montgomery, said after the vote.

But the House and Senate bills differed fundamentally in the way the new taxes would be raised -- the House favoring increases in income and corporate taxes, the Senate favoring expansion of the sales tax. Neither side would give in.

Last night the two houses were tentatively scheduled to return to session at 1 p.m. today to hear the governor's speech, then recess for a day to cool off. They plan to reconvene Thursday to adopt the doomsday budget, and then return Monday to begin work on a new tax and capital construction plan.

Besides cutting aid to schools, agencies and the poor, the doomsday budget would have slam-dunked local governments by slashing another $95 million in state aid on top of $250 million in reductions already approved.

"It is starting to turn into a bittersweet day for Baltimore," said Mayor Kurt L. Schmoke, who went from the Orioles' Opening Day victory to the legislature's closing night defeat.

"Everyone felt so euphoric this afternoon, and now we're looking a budget that could do a lot of harm for a lot of years," he said.

In an extended session, however, the "doomsday" list of additional budget cuts could be revised. And, if a subsequent agreement can be reached on taxes, that list could be partly or completely replaced with new revenues.

Local governments were put squarely in jeopardy by last night's actions.

By killing the tax bill, it means Baltimore and the 23 counties will lose $88.5 million in state aid to help offset the state's Fiscal Year 1992 budget deficit rather than a $50 million hit if the tax bill had passed.

Also defeated with the tax package was expansion of local authority to raise piggyback income tax rates, a move long intended to offset the huge cuts in state aid.

Without that additional taxing authority, local governments would have little choice but to lay off employees, cut services, raise property taxes, or do all of those things.

By failing to pass an operating budget, the legislature was prohibited from voting for a state construction budget for next year.

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