Fiscal plans cause alarm

Glendening's budget for next year called overly optimistic

`Gloom and doom'

Governor discounts analyst's warning about overspending

January 24, 2001|By Thomas W. Waldron and Howard Libit | Thomas W. Waldron and Howard Libit,SUN STAFF

Legislative analysts warned yesterday that Gov. Parris N. Glendening's proposed budget significantly underestimates the future cost of state programs and predicted Maryland will face a major shortfall in a year if it's approved.

While Glendening has boasted that his spending plan will lead to balanced budgets for the next five years, the General Assembly's chief fiscal analyst said the budget is so overly optimistic that the state is likely to find itself in a $350 million deficit by next year.

Warren G. Deschenaux said the governor had used similarly optimistic budget projections in the past. But, he added, "The forecasting is somewhat more disingenuous" this time.

Even as the analysts questioned the fiscal soundness of the governor's proposed operating budget for the year that begins July 1, Glendening unveiled a record $1.5 billion construction budget.

As expected, the governor's capital spending proposal focuses on construction at colleges and universities, buying land to protect open space, revitalizing older neighborhoods and continuing his eight-year pledge to build and renovate more than 13,000 public school classrooms.

"I feel very confident about this state, and I'm pleased with our prosperity," Glendening said. "I believe the way to continue the prosperity is by investing in people."

Among the projects the governor wants to build next year are three academic buildings at University of Maryland, Baltimore County; a basketball arena at University of Maryland, College Park; a performing arts center in Bethesda; and a public-safety training center in Sykesville.

The capital budget is part of the governor's $21 billion overall spending plan for next year.

That budget is sure to face significant cuts because it exceeds the legislature's self-imposed spending limits by more than $200 million.

The legislature's fiscal analysts also said yesterday that Glendening's office, in balancing the budget, relied upon several assumptions that understate state needs.

For example, Glendening's budget includes funding to pay for medical insurance for 428,000 Medicaid recipients. Recent state figures show that the state has 442,000 people enrolled in the program, and analysts said that number could climb if the economy slows, costing the state an estimated $32 million.

"We believe Medicaid is underfunded," said Deschenaux. "The budget does not reflect the caseload we expect - mainly because it does not reflect the caseload we have now."

Glendening downplayed Deschenaux's warnings on Medicaid and other budget issues.

"Three years ago, he was projecting we'd have a huge shortfall right now," the governor said. "He's fulfilling his doom and gloom role, and he's wrong."

But lawmakers said the budget analysis made it clear they will face a painful task cutting Glendening's spending plan to an acceptable level.

"This is going to be hard," said Sen. Barbara A. Hoffman, chairwoman of the Senate Budget Committee. "The governor found a way to say `yes' to a lot of worthy causes. We have to be the parent who says, `You can't eat all your Halloween candy on Halloween.'"

The ranking Republican on the House Appropriations Committee, Del. Robert L. Flanagan of Howard County, said the staff's analysis "vindicated" the GOP, which has been raising warnings about Glendening's budget for weeks.

"There's a growing consensus that the Glendening-Townsend administration may leave Maryland in the same fiscal crisis that Glendening left Prince George's County," Flanagan said.

The almost $1.5 billion capital budget proposed yesterday is more than double the amount Glendening spent on construction in his first year in office and is 12 percent more than the state's capital budget for this year.

Almost half of the capital budget plan would go to education, including $418.6 million to colleges and universities and $245.5 million to renovate aging schools and build new ones.

New projects include $5 million for Coppin State College to upgrade campus telecommunications wiring and fix an exterior wall at the Miles Connor Building. Plans for a new academic building at St. Mary's College also were moved forward one year.

Money for public schools would be less than the record $300.3 million the state is spending this year - though the governor said Maryland will meet his goal of spending $1.6 billion during his eight years in office.

The governor continued taking advantage of Maryland's surplus to pay for the construction projects, choosing to dip into the extra money for $603.7 million in cash rather than add to the state's debt.

As previously announced, Glendening's budget includes more than $170 million for Smart Growth initiatives aimed at limiting sprawl and reinvigorating older communities.

A small portion of that money would go toward Baltimore's digital harbor plan, to attract technology firms and other businesses to the city by creating parks, bicycle paths and waterfront boardwalks.

While most of the $45 million digital harbor plan was left unfunded, Glendening described it yesterday as "a good project" and said he would likely include some funding for it in a supplemental budget submission in coming months.

Other projects included in the capital budget are money for Ripken Stadium in Aberdeen, the replacement of the state police barracks in North East and a new District Court building in Silver Spring.

In Annapolis

Today's highlights

11 a.m. Senate meets, Senate chamber.

11:45 a.m. House of Delegates meets, House chamber.

2 p.m. House Ways and Means Committee, briefing by state school Superintendent Nancy S. Grasmick on education finance, Room 110, Lowe House Office Building.

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