Glendening offers cautious budget, braking spending

January 21, 1995|By Peter Jensen | Peter Jensen,Sun Staff Writer Sun staff writer Frank Langfitt contributed to this article.

A fiscally cautious Gov. Parris N. Glendening gave the General Assembly a $14.5 billion state budget yesterday that would clamp down on spending, but he issued a stern warning to lawmakers not to use its anticipated $200 million surplus for a "gimmick" tax break.

Mr. Glendening's proposal offers no new taxes or tax cuts. It would increase state spending by roughly 4.5 percent over this year's budget, but it is $234 million leaner than the budget outgoing Gov. William Donald Schaefer proposed Tuesday.

Comparisons to the Schaefer budget, which was superseded by Mr. Glendening's spending plan, were made repeatedly by the new chief executive in his speech to a joint legislative session. He left little doubt that a new era has arrived in Annapolis -- the Democratic governor sounded like a near-Republican.

"I think he heard the voters," said House Minority Leader Robert H. Kittleman, a Howard County Republican. "I was kind of overall pleased."

Mr. Glendening's proposal for fiscal 1996, which begins July 1, would, for instance, cut financial and medical assistance to the poor and set aside millions of dollars more for economic development. It would reduce the number of state employees and limit employee raises to 2 percent, half a percentage point less than Mr. Schaefer had wanted.

In his presentation to the legislature, the governor also (x repeatedly used a term that is likely to be heard many more times by lawmakers during the 90-day session: structural deficit. It refers to the fact that state government is committed to spending more money -- about $200 million more -- than it expects to take in.

That problem won't arise until 1997, but Mr. Glendening said it is prudent to reserve $150 million now to help cover the expected shortfall and to set aside $50 million more to lessen the impact of possible federal budget cuts.

The governor told legislators that although he has promised to try to cut the state's income tax, it is sensible to wait until later in his four-year term. And he was firm on that point, offering to compromise on nearly everything but tax relief.

"Responsible tax relief must not be a gimmick that will increase other taxes or hidden service fees in just a few years," Mr. Glendening said in his midday budget address. "Let us trust the people to be smarter than to fall for such gimmicks."

That position puts the governor at odds with House Speaker Casper R. Taylor Jr. The Allegany County Democrat has said he wants to use $110 million to finance an across-the-board 3 percent income tax cut this year.

Mr. Taylor played down any potential conflict yesterday, saying, "I think his [Glendening's] approach is right on target. He's putting his money where his mouth is."

Mr. Glendening also demonstrated a willingness to reward the voters who put him into office. To do so, he proposed skimming $60 million from a $115 million surplus in the Maryland Automobile Insurance Fund (MAIF), the agency which insures high-risk drivers.

With part of that money, the governor would increase school construction in his native Prince George's County by $20 million and give police departments in Baltimore City and Prince George's and Montgomery counties a total of $20 million in one-time grants.

Baltimore and the two suburban Washington counties -- the only subdivisions the Democrat carried in the November election -- also fare well elsewhere in the budget.

The "crime prevention" grants would provide $8 million for Baltimore, $8 million for Prince George's and $4 million for Montgomery. Mr. Glendening said the political connection was "pure coincidence."

"The city has the biggest crime problem in the state," said Peter M. Marudas, executive assistant to Baltimore Mayor Kurt L. Schmoke. "We welcome the money."

School construction funds are needed in Prince George's County to lift a federal busing order, the only one of its kind in Maryland, the governor noted.

In one of his most controversial decisions, Mr. Glendening eliminated the $48 million Disability Assistance and Loan Program (DALP), which provides monthly cash benefits and medical care to 21,000 poor people. It is financed solely by the state, which can no longer afford it, he said.

The governor said medical care would still be available to DALP recipients through Medicaid, a program he also trimmed.

"I know that you will receive letters and petitions concerning the elimination of this program," Mr. Glendening said of the DALP cut. "But it just does not make sense for us to nip and tuck and cut our priorities of education, safe streets, business growth and jobs to support a $48 million Maryland-only welfare system."

City lawmakers worried that the action would affect Baltimore more than any other area. Del. Howard P. Rawlings, a city Democrat who is chairman of the House Appropriations Committee, said he was disturbed by the governor's decision to cut welfare.

"He's either sending a political message or he's completely insensitive to this population," Mr. Rawlings said.

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