ANNAPOLIS -- A powerful legislator yesterday proposed dramatic ways to reduce government spending by freezing education funds, combining state agencies, and turning over some state operations to private business.
House Speaker R. Clayton Mitchell Jr. also recommended that the state reduce its work force and cut aid to local governments by about $150 million.
Mr. Mitchell said the state has to make "structural changes now" rather than making piecemeal cuts. "We have to realize in the '90s we won't have the growth that we had in the '80s."
His plan contains no estimates of cost savings or required layoffs. He said he decided to go public with the plan to encourage debate.
Gov. William Donald Schaefer recently announced that the state must slash $500 million to balance its budget, marking the eighth round of cuts to eliminate a deficit since the recession hit Maryland.
Mr. Schaefer yesterday said he is considering Mr. Mitchell's proposals, especially the $150 million in cuts to the counties and Baltimore. He said he would like input from county officials.
"I don't want to tell them what to do. How they do it is up to them," the governor said.
Mr. Schaefer did not commit himself on the education proposal, which he called the "most controversial."
Mr. Mitchell wants lawmakers and the governor to consider freezing -- and possibly reducing -- planned increases in education funding for the next two years.
Within the last 12 months, the state has cut money for local governments, some of which was used for education services. rTC But the bulk of the state's direct aid to education remained intact.
"I just don't think at this point in time we can fully fund it," said Mr. Mitchell, an Eastern Shore Democrat.
Irene Dandridge, president of the Baltimore Teachers Union, was shocked when told of Mr. Mitchell's idea.
"I think that's irresponsible in light of the fact that schools are just barely recovering from the cuts last year. In Baltimore, it would be devastating. We'd have to lay off people and enlarge class sizes," Ms. Dandridge said.
Mr. Mitchell's suggestions also include:
* Merging the separate agriculture, natural resources and environment departments into one, eliminating duplicate positions.
* Merging the Housing and Community Development Department with the Department of Economic and Employment
* Merging natural resources police with the state police and closing the natural resources police academy.
* Turning over to private businesses the operation of the state-owned Baltimore-Washington International Airport.
* Trying to reduce the amount the state pays for health benefits by changing the way its own workers as well as poor people are grouped in insurance pools. Insurance companies would be asked to bid on the new coverage.
Mr. Mitchell also suggested that many functions of government, such as health-related inspections, be turned over to private business.
No one is suggesting more tax increases to balance the budget, which many politicians now say contains structural problems that cannot be solved without major changes in the number and kinds of services that government provides.
Mr. Schaefer said he has not yet developed a plan for erasing the deficit, although he is looking at ways to do it both with and without legislative approval. Lawmakers would have to act, for instance, if the governor wanted to cut more than about $40 million from local governments.
The legislature already plans to participate in the process.
"I spoke to the governor today and told him the Senate wanted to cooperate with him," Sen. President Thomas V. Mike Miller Jr., a Prince George's County Democrat, said yesterday.
Both he and Mr. Mitchell said they would consider holding a special legislative session as long as a budget-cutting plan can be shaped in advance.
Acknowledging that his proposal would abolish government jobs, Mr. Mitchell said it also would create some jobs in the private sector. "I hate to lay people off at a time like this," he said.
House Speaker R. Clayton Mitchell Jr. suggested the state make the following budget cuts:
* Cut aid to local governments by up to $150 million.
* Freeze or reduce planned increases in education funding.
* Merge the state's agriculture, natural resources and environment departments and eliminate duplicate positions.
* Merge the Housing and Community Development Department with the Department of Economic and Employment Development.
* Abolish the Department of Personnel, allowing agencies to maintain their own personnel offices.
* Allow private businesses to operate the state-owned Baltimore-Washington International Airport and to take over most duties of the Department of General Services.
* Put state workers and medical assistance recipients into a combined insurance pool to reduce the amount the state pays in health benefits.