Senate panel backs cuts in spending plan

Marathon session yields $460 million proposed reduction

Tax break supported

Governor's pet items targets of legislators

tobacco tax stalled

March 10, 2002|By David Nitkin | David Nitkin,SUN STAFF

The Maryland Senate's budget-writing committee endorsed nearly $460 million in cuts to a proposed state spending plan yesterday, removing millions from environmental and higher education programs against the wishes of Gov. Parris N. Glendening.

During a marathon weekend work session that laid the foundation for the General Assembly's toughest task of the year, legislators reversed Glendening's call to cancel the final 2-percent stage of a five-year, 10 per- cent income tax cut.

The cut would provide an average family with about $75, and would cost the state about $177 million in revenue over the next 15 months.

Instead, members of the Budget and Taxation Committee decided to borrow money for or postpone $177 million in construction projects that had been backed by pledges of operating cash. That comes on top of $280 million in added borrowing already identified by the governor.

Targeted projects that might be delayed include $10 million for a health sciences research facility at University of Maryland, Baltimore, and $21.8 million for an information technology center at University of Maryland, Baltimore County.

The budget cuts would hit deeply in higher education and the environment, areas where Glendening hopes to leave a mark.

He has been lobbying lawmakers heavily during the past week to restore some of the money.

After more than 10 hours spent debating and altering the governor's $22.2 billion spending proposal for the fiscal year that begins July 1, legislators were left with a $7 million surplus that could be used to supplement some programs.

Late last night, committee members were deciding how to divide the surplus among an $85 million wish list of cuts they most want to reverse. Their work will continue tomorrow.

Earlier in the day, lawmakers rejected an idea that would have allowed them to reconsider some painful decisions -- they voted against a 70-cent-per-pack tobacco tax increase that could generate from $150 million to $200 million yearly.

But the idea is not dead. Several senators said they would agree to an increase if the money were used exclusively for public schools, rather than filling a budget gap. A blue-ribbon panel has recommended that Maryland spend $1.1 billion more on public schools yearly, and lawmakers are torn over how to reach that goal during a time of declining tax dollars.

"I'm not saying I won't support a revenue increase sometime in the next 30 days," said Sen. Robert R. Neall, an Anne Arundel County Democrat. "But I'm not sure it's today.

Yesterday saw the most work to date by lawmakers crafting a budget, and their decisions formed the bulk of the recommendations that will be debated by the Senate this week.

Still, much work lies ahead. The House of Delegates will adopt its own budget, which will differ in important areas, and the governor still has a say.

In addition to the size and use of a cigarette tax, other significant issues remain unresolved.

Lawmakers must decide how to spend a $120 million windfall that will be created if the state settles a fee dispute with Peter G. Angelos, the state's attorney in the national tobacco case. They must also agree on how much money to borrow next year for construction projects; Glendening is backing a figure at least $100 million higher than senators say they feel comfortable with.

Nonetheless, yesterday's session accomplished several difficult tasks. The committee:

Rejected $150 million of the $370 million the governor proposed transferring or borrowing from dozens of surplus funds as a one-year budget fix. Notably, legislators said they would not borrow $50 million from an automobile insurance fund that provides coverage to high-risk drivers, questioning the legality of the loan.

Restored a proposed $13 million reduction in commissions paid to lottery agents, after lobbying from vendors who sell tickets.

Said they would most likely not distribute $15 million in local government projects. In most years, Maryland borrows money and gives it to cities and counties for small projects that pay big political dividends for the senators and delegates who shepherd them through the General Assembly.

"The 13 people on this committee have laid their hearts bare," said committee chairwoman Barbara A. Hoffman, a Baltimore Democrat. "We have made cuts we don't want to make. We have taken political risks."

Hoffman noted that virtually all of the cuts were reductions in increases that departments stood to receive from one year to the next. Still, lawmakers recognized they were angering their constituents and might have a tough sell after the legislative session ends in early April.

"It's an election year," said Sen. Gloria G. Lawlah, a Prince George's County Democrat. "We have to go out on the stump. We don't want to risk angering anybody."

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