State budget is cut $87 million by board

Hiring freeze, 1.5% trim planned

some say more reductions needed

November 15, 2001|By David Nitkin | David Nitkin,SUN STAFF

The Maryland Board of Public Works cut $87 million from the state budget yesterday amid charges that the first round of belt-tightening in a sagging economy didn't go far enough.

The reductions reflected a hiring freeze for all but essential security personnel and a 1.5 percent across-the-board trim for every state agency in the budget year that began July 1 and runs through June 30.

Gov. Parris N. Glendening proposed the cuts a month ago, part of $205 million in reductions that included delaying $65 million in construction projects and related savings in next year's budget.

Comptroller William Donald Schaefer - he, Glendening and Treasurer Richard N. Dixon make up the Public Works Board - said that yesterday's action was a bandage masking deeper wounds.

"I warn you, $200 million is not the true figure," Schaefer told Eloise Foster, the state budget director. "You know it, and I know it."

Schaefer, an incessant critic of Glendening during board meetings, said the governor has painted an overly rosy picture of the state's finances and crafted a budget for this year that is riddled with unrealistic assumptions, including the anticipated collection of $70 million from a tax amnesty program overseen by Schaefer that yielded about $13 million. "He was hoping he'd get out of here before those real problems hit," Schaefer said.

In an interview after the meeting, Glendening defended the current spending plan, saying "the legislature did its job and passed a good budget."

"We'll continue to make adjustments as we continue to monitor the Maryland economy," the governor said.

About two weeks after Glendening proposed the reductions, General Assembly budget analysts released an even bleaker assessment of the state's economy, predicting a $1.7 billion gap between revenues and expenses by the end of the 2003 fiscal year. By law, the state's budget must be balanced, so any shortfall would have to be filled by some combination of spending reductions, tax and fee increases and use of reserve funds.

"That figure makes no sense at all," Glendening said yesterday. "It assumes we make no adjustments," in current spending.

While acknowledging a slowdown in travel and tourism, the governor repeated his assertion yesterday that the state's economy remains fundamentally strong. At a news conference later in the day, he pointed to Maryland's high rankings in two recent economic development surveys.

Maryland was selected as a top-10 "honor roll" state by the Corporation for Enterprise Development in Washington, which for 15 years has ranked states on an index that includes employment, earnings, entrepreneurial energy and education skills of workers, among other factors.

Maryland placed first in the nation for its low poverty rate, and its amount of university and federal research and development. But it scored last for preservation of agricultural land, a slap for a governor who has focused much energy on land conservation. Overall, it is the first time Maryland has ranked in the top 10 in the index.

This month, the Milken Research Institute of Los Angeles placed Maryland among the top five states best poised to benefit economically from new technologies.

"Many economists see the Maryland economy positioned to prosper as the economy comes back," Glendening said.

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