No tax cut in governor's tight budget Education, jobs, law enforcement remain priorities

Somber State of the State

Stadiums get funds

1,030 state jobs to be eliminated

January 18, 1996|By Peter Jensen and Thomas W. Waldron | Peter Jensen and Thomas W. Waldron,SUN STAFF

Feeling the pressures of a stagnant state economy and a continuing loss of federal funds and jobs, a somber Gov. Parris N. Glendening yesterday presented a $14.7 billion state budget that increases spending by the smallest percentage in 51 years -- and casts doubt on the prospects of an income tax cut.

In his State of the State address to the General Assembly, Mr. Glendening rose to the defense of taxpayer-supported football stadiums in Baltimore and Prince George's County and sounded the themes he has repeated like a mantra since his 1994 campaign -- education, jobs and law enforcement.

While state employees are left without a cost-of-living increase, 1,030 jobs are to be eliminated and most agencies cut, the governor's budget offers significant increases for public school construction, local education aid and subsidies for companies relocating to Maryland.

"Except in the areas of our priorities -- work, learning and safety -- all other major departments were cut," Mr. Glendening told a joint session of the legislature.

"This is said without joy or even pride, but in sober recognition of the difficult decisions public officials at all levels are being forced to make."

The 45-minute speech met with general approval from his audience, although reactions were often just polite applause -- the subdued response of lawmakers recognizing uncomfortable fiscal realities and thorny policy questions.

"I think the budget comports with the feelings of the people of the state," said Senate President Thomas V. Mike Miller Jr.

"It emphasizes the governor's priorities while at the same time involves a significant belt-tightening."

The austere budget, described by Senate Budget and Taxation Chairwoman Barbara A. Hoffman as "uncuttable," assumes there will be no reduction in the state's personal income tax next year -- a proposal the governor has promised to consider in March when officials can better estimate state revenues.

Mr. Glendening had warned that the budget would lack a tax cut, but its absence on paper -- along with the stark reality of program reductions -- reminded legislators of how dim the tax cut's prospects now appear.

The governor's budget does not tap into the state reserve fund of $250 million, formed last year to either fund a tax cut or cover federal aid losses. Instead, Maryland's total reserves will increase to more than $500 million.

Bipartisan approval

Republicans and some conservative Democrats applauded the governor for his fiscal responsibility.

"He's starting to restructure government, not because he wants to but because he has to," said Del. Robert H. Kittleman, the House Republican leader.

But he said the governor should have done more to boost the state's sagging economy by proposing an income tax cut and repealing some of the state's pro-labor laws.

"It looks like he's going to let the business climate deteriorate even further," Mr. Kittleman said.

Lawmakers will spend the next 2 1/2 months examining the budget in detail. Under the Maryland Constitution, they have the authority only to reduce spending, not to increase it.

Rising to the defense of the state's $273 million investment in football stadiums, the governor said the projects would generate enough taxes to recoup their cost to the state. He said the jobs they would generate -- albeit entry-level, service jobs -- are "important to the economies of our central cities and metropolitan areas."

In all, the budget for next year will increase by less than two-10ths of 1 percent -- a minuscule amount compared with a typical growth of 3 percent to 7 percent.

By squeezing many state agencies, Mr. Glendening managed to find money to boost spending for schools and colleges and to offer some modest improvements in police and public safety programs.

"We made very difficult, tough and painful decisions," Mr. Glendening told lawmakers.

Several hundred layoffs

Most of the 1,030 state jobs that will be eliminated in the budget will come through attrition, but budget Secretary Marita B. Brown said there would be "several hundred" layoffs.

Among the big winners in the budget are Maryland's 24 local subdivisions, which will see state aid for their counties grow by 4.4 percent despite shrinking state revenues.

The governor also proposed an increase of more than 5 percent in aid to local school systems, pushing the state's share to $2.2 billion. He has allocated $133 million for school construction, the largest amount in 20 years.

"I will not -- we must not -- let economically hard times lessen our commitment to education," Mr. Glendening said.

The move won praise from many legislators and local officials.

"He's putting money in places where people want it, in education and school construction," said Sen. Clarence W. Blount, a Baltimore Democrat.

Impact on localities

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