Takers fall into line for portion of Md. surplus

State coffers expected to be $1 billion in black

November 14, 1999|By Thomas W. Waldron | Thomas W. Waldron,SUN STAFF

When it comes to state budgets, there are good times, and then there are times like these: Maryland's treasury is bulging with excess revenue that is fast approaching $1 billion.

With such bounty pouring in -- and with little talk of major tax cuts -- the scramble for money in Annapolis has intensified as advocates, legislators and others see a rare opportunity to cash in on the state's good fortune.

All are hoping to persuade Gov. Parris N. Glendening to include their requests in the budget he submits to the General Assembly in January.

At stake is a long list of pet projects -- from nuts-and-bolts items such as drug treatment and aid for the poor to glittery buildings, including two theaters, campus laboratories and a College Park basketball arena.

"If not now, when?" says Lynda Meade, director of social concerns for Catholic Charities, which is seeking additional money for poverty programs. "That seems to capture the essence of the economic times."

When the General Assembly convenes for its annual 90-day session in January, legislators will be met with the state's best budget news in a decade.

Legislative analysts estimate that Maryland will end the fiscal year with a surplus of $619 million, 6 percent of the state's main budget fund of $9.7 billion.

On top of that, Maryland is to receive as much as $188 million this year from the national settlement with tobacco companies.

The state also has at least $175 million in reserves that can be spent while it holds on to $500 million as a cushion against any economic downturn.

"We're extraordinarily fortunate to have these opportunities thanks to the current economic situation," said Budget Secretary Frederick G. Puddester.

The state's robust fiscal condition stands in sharp contrast to the recession of the early 1990s, when Gov. William Donald Schaefer and the legislature were forced to make cut after cut in state spending.

Now, with a nine-figure surplus on the table, the hardest part of budgeting is saying no, Puddester said.

"The issue that we have to deal with is raised expectations," he said. "People just expect to get more from the state now."

One thing that appears to have little momentum is a major tax cut.

Glendening and the Democratic leaders of the Assembly have resisted such calls from Republicans, saying the phased-in 10 percent income tax cut passed in 1997 will suffice.

Minor tax breaks

Instead, talk has centered on reducing or eliminating the state's relatively minor inheritance tax and on expanding a tax credit for the working poor.

Glendening, who has vast constitutional power when it comes to crafting a budget, is making final decisions about his spending plan for next year.

But with the governor having made certain commitments and with some spending formulas set in law, it's clear that Glendening's budget proposal will include several expensive items, probably including more than $100 million in new spending for state colleges, $250 million for school buildings, $15 million for new scholarships and $12 million for additional services for developmentally disabled adults.

Legislative analysts are also expecting a $123 million package of salary and benefit improvements for state workers and at least $14 million for incentives to attract new teachers.

Even after all of those programs -- and many more -- are funded, the state will have about half a billion dollars to spend, according to legislative analyses.

Included in that is Maryland's share of payments from cigarette manufacturers.

Glendening has outlined $101 million worth of initiatives to be financed with that money, including $52 million for cancer prevention, research and treatment and $30 million for anti-smoking efforts. The governor has laid out basic guidelines, but hospitals and others are jockeying to get a slice of the tobacco funds.

Eyes on the windfall

As for the rest of the unallocated money, it seems that everyone involved with state government has plans for a chunk of the budget windfall.

Nancy S. Grasmick, the state superintendent of schools, is proposing a $106 million boost in education spending.

House Speaker Casper R. Taylor Jr. is among those looking for the state to make a "big money" increase for drug treatment, particularly in Baltimore.

"We need to wake up to the need to fund drug treatment, which we have been reluctant to do," said Taylor, a Cumberland Democrat. "This year, we can afford to do it."

With the General Assembly bound to set limits on spending for such continuing programs, much of the battle in coming months will be over traditional pork-barrel items, money for buildings and other one-time projects.

The Greater Baltimore Committee will be seeking $11.5 million to begin the $53 million rehabilitation of the Hippodrome Theater.

Montgomery County Executive Douglas M. Duncan has a lengthy wish list that includes requests for $14 million to begin building a concert hall in Rockville and $50 million for his county's public schools.

These are the good times

Ben Bialek, lobbyist for Duncan, said the county executive is not seeking much more than in other years. But county officials expect to win more of their requests because of the state's solid budget condition, Bialek said.

"These are definitely the good times," Bialek said.

Presidents of Maryland's college and universities also see a chance to address some of their long-standing building needs.

Freeman A. Hrabowski III, president of the University of Maryland, Baltimore County, is optimistic that the state will accelerate funding for a project that otherwise wouldn't be built for at least five years -- a $38 million engineering and computer science building.

"People know we need to have many more information-technology workers," Hrabowski said. "And here's a time when we can get it done."

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