Governor trims state spending

He freezes hiring, cuts budget 1.5% for all departments

Security costs exempt

Capital projects to be delayed, but no layoffs planned

October 18, 2001|By Michael Dresser | Michael Dresser,SUN STAFF

Noting revenue losses and extra security costs as a result of the Sept. 11 terrorist attacks, Gov. Parris N. Glendening announced yesterday that he is trimming the current state budget by $205 million and warned that more cuts may follow in December.

Glendening said the reductions will be achieved through a hiring freeze, a 1.5 percent cut in all department budgets and deferring capital projects. He characterized the cuts as "significant" but not "draconian" and said he plans no layoffs of state employees.

"We'll make the necessary choices to submit a balanced budget next year," he said. "We will maintain our fiscal stability."

Some top legislators welcomed the cuts, but the governor's critics complained that his across-the-board reduction harms essential services and spares budgetary "fluff."

"This is the lazy governor's way of cutting the budget," said House Minority Whip Robert L. Flanagan, a Howard County Republican.

The heads of key departments were feeling the budgetary pain.

"It's going to be very difficult," schools Superintendent Nancy S. Grasmick told the state school board.

The governor said the state has spent $6 million more than it planned on security measures after the attacks in New York and at the Pentagon. He said those costs will rise at least another $15 million to $20 million by the end of the fiscal year that ends June 30, and said more money may be needed for added security during the legislative session that begins in January.

The extra costs come at a time when revenues, which were faltering, are expected to drop further because of the economic fallout from the terrorist attacks. The governor said the impact on tourism and the airlines has been especially hard, but added that he's seen signs of a rebound.

Glendening said he expects to save $99 million through a hiring freeze that will exempt only security personnel. The spending cut by state agencies will yield $41.4 million, he said.

He also will put off indefinitely $65 million of the $133 million in capital projects he had previously deferred until December. The remaining $68 million also could be deferred if revenue projections look weak later this year. Aides said the projects to be delayed - many of them university buildings - will not be chosen until December.

The governor again warned that nobody should expect to find any new programs in next year's budget - even small ones.

As he has at nearly every recent public occasion, Glendening went out of his way to stress that the state's economy is "fundamentally strong." He said many other governors are facing "devastating" cuts that Maryland will be spared.

Sen. Barbara A. Hoffman, chairwoman of the Budget and Taxation Committee, praised the governor's actions as "sensible" but predicted they might not be enough to avoid further cuts.

"We don't want to clean up a big mess in January, so we're glad he took action," the Baltimore Democrat said. She predicted that while the state might have budget problems next year, it will not face anything approaching a crisis.

Sen. Robert R. Neall, a member of the budget committee, expressed doubt that the hiring freeze will yield as much savings as the governor projects.

"I'm not even sure the $205 million program that he's offering really is a $205 million program, but I'm glad he's paying attention to it," said Neall, an Anne Arundel Democrat.

State Comptroller William Donald Schaefer complained that he had been warning the governor about revenue shortfalls for months but "he didn't pay any attention to me." He decried the decision to impose the 1.5 percent cut on all departments.

"That's not the smartest way to do it because the small agencies can't absorb the cuts," Schaefer said.

Flanagan agreed that the across-the-board cuts are "highly objectionable." He said the governor was taking money from essential services such as health care and nursing homes while continuing to spend it on "so-called Smart Growth programs" such as the Greenprint land conservation initiative.

Flanagan derided that program as "deer going from open-space parcel to open-space parcel."

Sun staff writer Howard Libit contributed to this article.

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