Revenue estimates questioned Legislators weigh contingency cuts

January 23, 1993|By John W. Frece and Tom Bowman | John W. Frece and Tom Bowman,Staff Writers

State legislators are so suspicious of the revenue estimates the governor used to prepare next year's budget that they are considering ways to cut programs automatically if the money doesn't materialize.

They say they are particularly worried that the new keno lottery game will yield less than the $100 million estimated by the administration.

"We've been given another phony budget with wildly inaccurate revenue estimates," Sen. Howard A. Denis, R-Montgomery, complained to his Senate colleagues yesterday.

"Keno is inaccurate and we all know it. If we accept it, we'll be back in special session this summer like we were the year before and the year before that," Senator Denis said.

Gov. William Donald Schaefer's budget proposal was introduced just two days ago and the first hearing on it has not even been held. But Sen. Laurence Levitan, the Montgomery County Democrat who chairs the Budget and Taxation Committee, said he already is working with committee staff on ways to write into the budget instructions to pare certain programs automatically if the revenues aren't there to support them.

He said it was hard to say now which programs might be subject to such contingency language, but said a proposed $120 million increase in aid to public schools might be a good place to start.

The effect of such budgetary action would be to shift responsibility from the governor to the General Assembly for cutting the budget if, like this year, anticipated revenues don't come in.

Mr. Schaefer's $12.7 billion budget calls for a 4.5 percent increase in spending even though tax revenues are expected to rise, due to growth in the economy, by no more than 2.3 percent next year.

The governor would make up the difference primarily through the estimated $100 million from keno, and another $30 million from increases in various fees and fines and transfers from other funds.

The Levitan proposal was favorably received by House leaders.

"We've had contingencies before. . . . Sure it should be considered," said House Speaker R. Clayton Mitchell Jr., D-Kent. "I think the Appropriations Committee and all the other committees will look into this."

"I'd like to see discussion of it," said Majority Leader D. Bruce Poole, D-Washington, saying that many legislators would like to avoid being called back for a special session later in the year to cut the budget. "We have to pass a budget that's sustainable for the entire year," he said.

Frederick W. Puddester, the governor's deputy budget secretary, said Mr. Schaefer was unlikely to favor that approach.

"I think the governor would prefer to be in control of the budget. That's one of the strengths of our whole political mechanism: the strong executive budget," he said.

Mr. Puddester also said it might be "tricky" to draft a workable automatic reduction provision, saying it would have to contain some sort of "trigger" to implement reductions when revenues fell below a certain percentage or a certain dollar amount by a certain time.

Such cutback mechanisms have been employed in the past, including one last year that would have chopped $100 million in the event the tax bill did not pass, said William S. Ratchford II, the legislature's budget director. But the tax bill eventually passed.

Still, Mr. Ratchford said the hard part for lawmakers is coming to an agreement on what to cut. "That's going to vary among individual legislators," he said.

KENO SELLING WELL

Keno sales for the week ending Jan. 17 were $3.5 million, up from $3.26 million the first week, the Lottery Agency said. Officials had predicted sales of $1.8 million the first week; $10 million by month's end. It now appears $10 million will be reached tomorrow.

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