Governor delays funds for building projects

$130 million reserved in case revenue drops

March 16, 2001|By Thomas W. Waldron | Thomas W. Waldron,SUN STAFF

In his first significant reaction to the uncertain national economy, Gov. Parris N. Glendening is postponing $130 million in building projects until the end of the year to see how tax collections fare.

The governor told legislative leaders yesterday that he will decide whether the state can afford the projects after Dec. 15, when officials make their forecast of revenues for the year ahead.

If revenues head downward, the money for the building projects would be used to meet other state spending needs, the governor said.

"This would ensure that the funds would still be available to help the state's budget if there is a national economic slowdown," Glendening said in a letter to the chairmen of the General Assembly's two budget committees.

Glendening's decision occurred a day after officials reduced their estimates of how much money the state will collect next year by $50 million, the first downward revision in several years.

The delays announced yesterday affect a small portion of the state's planned $1.4 billion building program for next year.

Among the projects Glendening postponed are a new dental school at the University of Maryland, Baltimore; a new public policy institute at the University of Maryland, Baltimore County; and a new research building in Montgomery County for the University of Maryland Biotechnology Institute.

Worried that the state may not be able to afford Glendening's ambitious building program, key legislators had pressed the governor to take steps to slow such spending.

"If the economy went south, we wanted to have a little cash to give us some planning time," said Sen. Barbara A. Hoffman, chairwoman of the Senate budget committee.

"We're just trying to be prudent."

Del. Robert L. Flanagan, the House Republican whip, called Glendening's move "a modest step in the right direction."

"We need to move with much more restraint in some of these capital expenditures in order to get it right," Flanagan said.

Glendening's move came as the Senate budget committee finished work on the governor's $21 billion spending plan for the year that begins July 1.

Two Republicans - Sens. Martin G. Madden of Howard County and J. Lowell Stoltzfus of the Eastern Shore - voted against the budget, saying it would spend state reserve funds that will be needed if tax revenues slide.

"To take $478 million out of our `rainy day fund' with all the warning signals around sets us up for large program cuts or tax increases in the next year," Madden said.

Unlike their colleagues in the House of Delegates, the Senate committee approved spending $5 million on textbooks for students in private and parochial schools. Glendening had asked for $8 million, but the committee voted 8-5 to scale it back. The House eliminated the program in its spending plan.

"We ought to help and educate children, wherever we find them," said Sen. Nathaniel J. McFadden, an East Baltimore Democrat who supported the textbook funding.

Sen. Christopher Van Hollen, a Montgomery County Democrat, voted against the spending, saying, "Given the shortfall in funding for very important priorities in the public-education system, I don't think we can go forward with this."

If the full Senate votes to keep the $5 million in the budget, as expected, a conference committee would have to resolve the difference between the chambers.

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