5% rise recommended for operating budget

December 22, 1993|By William F. Zorzi Jr. | William F. Zorzi Jr.,Staff Writer

The Maryland General Assembly's special joint Spending Affordability Committee last night recommended that next year's state operating budget grow by 5 percent above current spending levels.

But the recommended $444 million increase in spending -- supported by an estimated increase in tax revenues -- would not allow for any new state programs, according to William S. Ratchford II, the legislature's top fiscal adviser.

The committee also recommended not extending beyond the Dec. 31, 1994, expiration date a 1 percent surtax on wealthy Marylanders -- the result of action taken by the legislature in April 1992 at the height of the state's budget crisis.

Under the law, Marylanders with taxable incomes of $100,000 or more, and couples with combined taxable incomes of $150,000 or more, were pushed into a 6 percent income tax bracket, instead of being taxed at the state's 5 percent rate.

Those affected by the higher tax are the top 1.2 percent of taxpayers, more than 25,000 Marylanders.

In the upcoming session of the General Assembly -- an election year -- legislators are almost sure to let the surtax die, although Gov. William Donald Schaefer apparently has not made a decision on whether to introduce a bill to extend the tax.

The recommended 5 percent budget increase would not be enough to cover programs now in place because of new aid mandated for next year, inflation and a 3 percent cost-of-living increase proposed for state employees, who have gone four years without a raise, officials said.

Those additional expenditures for next year's estimated baseline budget -- the amount needed to maintain existing programs plus the mandates and pay raises -- would require that $114 million be cut from the operating budget estimate of $9.4 billion, said Mr. Ratchford, director of the legislature's Department of Fiscal Services.

Those figures do not include another $15 million needed to offset more than $100 million in losses from the state employees' health insurance program administered by Maryland Blue Cross and Blue Shield.

"Where am I supposed to find $114 million?" Frederick W. Puddester, Mr. Schaefer's deputy budget secretary, asked after the meeting.

"We'll find it; we'll find it," said Del. Howard P. "Pete" Rawlings, the Baltimore Democrat who chairs the House Appropriations Committee.

But Mr. Rawlings offered no specifics as to where.

The recommendation of the Spending Affordability Committee -- a panel of senators, delegates and four public members -- is not binding on Mr. Schaefer, who will submit his budget to the legislature after it convenes next month. The governor has ignored the committee's recommendation in some years, only to have the legislature cut the budget down to the recommended levels.

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