Ehrlich budget proposes legal slots, program cuts

$22.8 billion plan would also tap fund for transportation

Money for schools included

Greater reductions likely if gambling is refused

January 18, 2003|By David Nitkin | David Nitkin,SUN STAFF

The $22.8 billion state budget unveiled by Gov. Robert L. Ehrlich Jr. yesterday contains a stark challenge for the General Assembly: Legalize slot machine gambling, or slash $395 million in valued services.

As expected, Ehrlich's first budget relies heavily on money from slots to close a projected $1.3 billion gap between revenues and expenses in the coming year. It also cuts programs by $430 million and uses $324 million for one-time fixes by tapping a transportation fund and other reserve accounts.

Administration officials concede that they have offered only a partial solution to the state's budget woes but said that that is all they have had time to do since Election Day.

The spending plan, they said, fulfills Ehrlich's campaign promise to meet the requirements of a landmark school-funding initiative while avoiding employee layoffs and tax increases.

"The governor and I were handed a $1.8 billion budget deficit [over two years], and we had 10 weeks to fix it," said Lt. Gov. Michael S. Steele. "We are spending within our means. This budget is a sustainable, honest budget."

Legislative leaders briefed yesterday over a breakfast of eggs and bacon inside the governor's mansion gave the plan generally good reviews, recognizing that if they decide not to legalize slots this year - a distinct possibility - their work becomes more difficult.

"I think the proposal is one we can work with him on," said Sen. Ulysses Currie, a Prince George's County Democrat and chairman of the Budget and Taxation Committee. "I gave him high marks on the process because he appears to be reaching out. I think it is going to be very difficult at best to get a slots bill through. We have to, I think, work with him on other revenue to fill the hole if slots fails."

As local officials and advocates digested the data throughout the day, disappointment and frustration surfaced.

Ehrlich has proposed taking $300 million from a transportation trust fund over two years to pay for general government operations, as well as withholding $102 million from counties for road projects.

Local reaction

For a governor who promised to end gridlock in the Washington suburbs and protect aid to counties in tough budget times, the moves are startling, local leaders said.

"He's doing to Maryland what two Republican governors did in Virginia, where they basically bankrupted the transportation program," said Montgomery County Executive Douglas M. Duncan, a Democrat and potential 2006 rival of Ehrlich. "Parris Glendening did not have a vision for transportation, and Bob Ehrlich with his budget is making it worse because he has a negative vision for transportation."

Baltimore County Executive James T. Smith Jr. said his county stands to lose $11.7 million for snow plowing and road repairs under the governor's plan. "I'm disappointed the governor did not keep his commitment not to cut state aid to local jurisdictions," he said.

Administration officials say tapping the transportation fund would not delay road projects proposed for the next several years.

But they acknowledge that they have no firm timetable for construction of the Inter-County Connector, a long-studied Montgomery County highway that Glendening opposed and Ehrlich pledged to build. Traffic issues are the top concern of voters in Montgomery, the state's most populous jurisdiction.

"Every major proposal - the Purple Line [extension of the Washington, D.C., subway], the ICC - is now in jeopardy because of his actions," Duncan said.

Ehrlich offered a more optimistic view, saying that every county gets more money next year because he met the Thornton Commission's public school recommendations.

The governor said his plan increases public school funding by $242 million and sets aside $128 million more for Medicaid expenses. Those priorities drew praise from interest groups.

"He's living up to his promises so far, and that's significant," said Christopher Maher, education director for Advocates for Children and Youth. "There was a lot of uncertainty and hand-wringing going into the budget."

During his campaign, Ehrlich pledged a top-to-bottom review of state government and said he could squeeze "efficiencies" of 4 percent from each agency. He now says such a review will take months longer, and broader changes will come in a year.

Ehrlich found room for $30.2 million in initiatives of his own design, including $2.9 million to hire more public defenders and $7.5 million for a juvenile services education program.

"They go to the very core of what government is supposed to be about," Ehrlich said.

Overall, the general fund budget, which pays for most state services, would rise 4.3 percent, from $10.4 billion to $10.8 billion. Ehrlich would cut a 2 percent pay increase for state employees, which was negotiated by Glendening, and he proposes cutting 1,387 vacant positions while adding 431 new ones. The state work force would drop to 79,860 positions, from 80,816.

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