$14.4 billion Md. budget is passed

April 04, 1995|By John W. Frece | John W. Frece,Sun Staff Writer

The General Assembly enacted a $14.4 billion state budget last night that is as notable for the money stashed away in reserve funds as it is for the money appropriated for programs.

The budget contains no new taxes, few new spending initiatives and a modest 2 percent salary increase for about 75,000 state workers.

It even reduces -- albeit by only 60 positions -- the number of authorized state jobs.

As it has for the past 15 years, the budget contains restrictions on when Medicaid funds may be used to pay for abortions for poor women. Gov. Parris N. Glendening wanted to lift the restrictions in an effort to make abortions as available to poor women as they are to women who can afford to pay. But the House refused to go along, and the Senate let the House action stand uncontested.

The House gave its final approval to the budget yesterday afternoon, 113-22, and the Senate followed suit last night, 43-4.

Sen. Barbara A. Hoffman, a Baltimore Democrat and chair of the Budget and Taxation Committee, called the budget "cautious, prudent and somewhat dull."

Many of the budget decisions were made with an eye toward next year's legislative session.

Driven by a desire to cut state taxes but fearful that Congress could sharply reduce Maryland's federal aid, lawmakers set aside $250 million in various reserve accounts.

Of that total, $190 million was put in a fund to offset federal cutbacks. Any amount not used for that purpose is to help pay for the personal income tax cut that Mr. Glendening and legislative leaders have promised to seek next year.

The other $60 million goes into the state's "Rainy Day Fund," money set aside as a hedge against financial crisis. With this latest installment, the fund is projected to reach $371 million next year. That would exceed the assembly's goal of setting aside an amount equal to 5 percent of the general fund portion of the budget.

""I think it is a budget that reflects fiscal constraint on the part of the state," said Del. Howard P. Rawlings, the Baltimore Democrat who chairs the House Appropriations Committee. But Howard County Republican Robert H. Kittleman, the House minority leader, said he was skeptical that the Democrats will ever use the reserves to lower taxes. Instead, he said, he expects the money to be used to "backfill" programs that have been cut by Congress.

"I think we'll be lucky if we ever see a tax cut," Mr. Kittleman said. "There'll be another excuse next year."

Overall, spending in the budget for the year that begins July 1 will rise by 4.4 percent. Increases include about $96 million more for the operation of public schools, plus a nearly 8 percent boost in state spending on prisons and police.

About $30 million was appropriated for public school construction. When combined with money in the capital budget, which is still pending, funding for school construction could reach $120 million.

"There is a lot of additional money in this budget for education and to staff up our correctional facilities," said Frederick W. Puddester, a deputy chief of staff to Mr. Glendening.

Mr. Puddester noted that the legislature agreed to Mr. Glendening's request for a huge increase in the "Sunny Day Fund," a pot of money the governor can use to lure businesses to Maryland or to keep businesses here. Started in 1989 by then-Gov. William Donald Schaefer, the fund has never had more than $5 million. Mr. Glendening wanted to raise it to $30 million. The legislature compromised at $20 million.

In an attempt to avoid a gas-tax increase during the four-year term that began this year, the budget directs the Department of Transportation to limit its annual spending on road construction projects so the money can stretch over the remainder of the term.

The budget also includes rewards for the three jurisdictions that Mr. Glendening carried in November: Montgomery and Prince George's counties and Baltimore City. Each received about $5 million in special grants -- for schools and police in Prince George's and Baltimore and, in Montgomery County's case, for urban renewal in Silver Spring.

Baltimore County also will receive about $2 million for infrastructure improvements in the rapidly developing Owings Mills area.

For Baltimore City, however, legislators withheld $5.8 million in school aid until officials demonstrate progress in implementing specific management reforms.

Unlike his predecessor, Mr. Glendening agreed to adhere to the legislature's self-imposed goal of limiting the increase in state spending to 4.5 percent or less. To do that, he trimmed $234 million from the budget that Mr. Schaefer submitted the day before he left office.

The most controversial reduction was the elimination of a $35 million program that paid disabled adults $157 a month. Their $13.5 million medical program also was abolished.

Under pressure from lawmakers and advocates for the homeless, however, the Glendening administration developed a replacement medical care program and, in place of the monthly stipends, offered $10 million in housing vouchers to help former recipients find shelter.

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