Proposal would cut aid to localities $60 million cut wouldn't end state's money woes, though.

July 16, 1992|By Marina Sarris and William F. Zorzi Jr. | Marina Sarris and William F. Zorzi Jr.,Staff Writers Staff writers Monica Norton, Larry Carson, David Simon, C. Fraser Smith, James Coram, Adam Sachs and Alan Craver contributed to this article.

A Maryland budget official yesterday unveiled a Schaefer administration plan to cut $60 million in aid to local governments and state agencies so the state can officially end the 1992 budget year in the black.

But the plan won't end the state's fiscal woes over the next 12 months, despite the influx of a half-billion dollars in new state taxes, said Frederick W. Puddester, Maryland deputy budget secretary.

"If we find revenues don't increase, then we'll have to address [fiscal year] 1993 at a later date," Mr. Puddester cautioned.

Legislative forecasters say the budget deficit could reach an additional $170 million before the 1993 fiscal year ends next June 30.

Gov. William Donald Schaefer, interviewed on the floor of the Democratic National Convention in New York yesterday, said he is worried about the budget.

"I've already reduced our spending," he said. "We've kept our Triple A bond rating, but state workers have been hurt. Legislators are already saying they will not consider new taxes next year. What it will mean is closing prisons, cutting juvenile services and other things."

The deficit plan must be approved by the Board of Public Works, which includes the governor, the comptroller and the treasurer.

The largest cuts -- $40 million -- would come from aid to local governments, such as money for health programs, police, schools and community colleges. That cut represents less than 2 percent of the $2.7 billion that Annapolis was to send to county government seats and Baltimore, Mr. Puddester said.

The plan includes a $12 million cut in non-mandated aid to education.

Programs dealing with child abuse and suicide prevention, teen pregnancy and high school dropouts will be cut by a half-million dollars, which is 6 percent of the total appropriation for those initiatives.

On the state level, at least 15 employees will lose their jobs under the plan, half of them from the Maryland Public Broadcasting Commission. Public Broadcasting, the state prosecutor's office and the Commission on Human Relations would suffer cuts of 10 percent in their budgets.

Other state agencies that were hard hit in last year's cuts, such as the health department, state colleges, police and prisons, would lose less than 1 percent of their appropriations.

The Juvenile Services Agency budget would be untouched because of the amount of stress the agency is under, Mr. Puddester added.

In the plan, Prince George's County took the hardest hit -- $12 million. Half of that was earmarked for magnet school programs there.

Baltimore's share of the cut was the second highest, totaling a much-needed $5.7 million for police, health programs, the library system and school grants, including more than $500,000 for school food services, according to city Budget Chief Edward J. Gallagher.

"It's going to hurt, that's for sure," Mr. Gallagher said, adding that while the city could absorb this first round, "I think we're going to be mindful of further cuts."

Mr. Gallagher said the city had set aside $1.6 million this year in a so-called "rainy day fund" for possible cuts in the fiscal year that began July 1.

Just last week, in anticipation of possibly losing as much as $9 million in state aid -- not including state grant money -- the Schmoke administration sent a memo telling agency heads to restrict hiring and stop all but the most critical expenses.

Mr. Gallagher said he was particularly troubled by the loss of $1.4 million of the $5 million in state grants budgeted this year for police aid. The budget had included $2 million for foot patrols and $3 million for a new violent crime patrol.

Also lost was $1.8 million in health grants, affecting school health and environmental programs, and $2.4 million from "non-mandated aid to education," including the loss of $1.2 million for the Enoch Pratt Free Library -- a cut that could mean a real setback to the struggling library system.

"That is extremely difficult," Mr. Gallagher said. "This has been a very tenuous situation, trying to keep the branches open."

Commenting on the inevitability of the cuts, Mayor Kurt L. Schmoke said the city had made plans "to avoid drastic reductions and relocations in services. We know it's coming." But the mayor remained firm in his commitment not to raise taxes in Baltimore, including any increase of the city's piggyback tax, as had been suggested by some legislators. "I don't see any new taxes," he said.

As in the city, county governments also have been anticipating cuts and saving against them.

In Baltimore County, officials had set up at rainy day fund of $10 million to handle anticipated cuts.

County Executive Roger B. Hayden says the county's cut of $4.7 million will probably sap money from that fund, but he worried that if state revenues do not increase, more cuts will follow.

"Government can't endure many more years of this," he said.

In Anne Arundel County, too, officials had stashed money away.

"We will be able to absorb the bulk of [$2.7 million] cuts by shifting around some funds," said Louise Hayman, spokeswoman for County Executive Robert R. Neall. "We're not going to have to dip into our Rainy Day fund," which has $10 million.

In Howard County, School Superintendent Michael E. Hickey said he had been told about 10 days ago that about $130,000 might be cut from non-mandated funds to education.

"If that's all, we can handle it," he said. "But it's worrisome that we're only 15 days into the fiscal year and already starting to experience cuts." Cuts in the county total $1 million.

In Harford County, officials hope to absorb an estimated $1.2 million cut through tighter management and control of spending, said Larry Klimovitz, director of administration.

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