Ehrlich says budget plan is finished

Two years needed to close gap in spending, he said

January 11, 2003|By David Nitkin | David Nitkin,SUN STAFF

Gov.-elect Robert L. Ehrlich Jr. said last night that he and his staff have finished work on the next state budget, and will need two years to eliminate what he said was a "structural" gap between spending and revenues.

Ehrlich's first spending plan has been sent to the printer and will be publicly released Friday, he said. The incoming administration's budget officials have been meeting with legislative leaders to tell them of the plan's contents.

"We have not given anybody a piece of paper," said James C. "Chip" DiPaula Jr. , Ehrlich's budget secretary nominee.

"Our philosophy is trying to get to a structural balance as much as possible," DiPaula said, a process that will take two years.

Legislative analysts project a $1.2 billion gap in the next budget, which takes effect July 1. The state spends about $22 billion a year, but of that, about $11 billion is discretionary. By law, the General Assembly must approve a balanced budget, so some combination of cuts and new revenues is needed.

Because Ehrlich officials are looking at a two-year solution, one-time revenue sources will be used to fill the gap in the first year. One possibility mentioned yesterday by several politicians with knowledge of the budget: transferring $300 million from the state's transportation trust fund into the general fund.

That prospect troubles Montgomery County Executive Douglas M. Duncan, re-elected on a platform of expanding roads and easing traffic gridlock.

"It's not good," Duncan said. "In my area, he ran on transportation. Now, he's taking money out of the transportation fund."

Ehrlich acknowledged that he would seek to transfer money from the transportation fund, but would not confirm the amount. He said his aides examined various funds with unspent money and tapped several of them. "Sometimes the answer was, if it's not going to set them back too much, then we took it," he said.

With the state budget a paramount issue, Ehrlich met privately yesterday for 40 minutes with county officials gathered at the Loews Annapolis Hotel for a conference of the Maryland Association of Counties.

In a dinner address, he told officials that his budget plan maintains the state's commitment to education and does not shave off any of the county's share of "piggyback" income tax revenue - collected by the state and passed on to local governments.

But he reiterated his warning that if his slot machine proposal does not pass, an alternative plan for balancing the state budget could reduce aid to local governments.

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