Raise pledged to state workers

Ehrlich budget plan includes $60 million increase for 78,000

January 21, 2004|By David Nitkin | David Nitkin,SUN STAFF

Gov. Robert L. Ehrlich Jr. plans to include a 1.6 percent raise for state workers in the $22 billion budget he submits today, the first increase they have received in more than two years, administration officials say.

The governor's spending plan will include nearly $60 million for salary increases for the state's 78,000-person work force -- welcome news for departments that have suffered through hiring freezes and the elimination of vacant positions in recent years.

"The employees deserve" the raises, said House Speaker Michael E. Busch, an Anne Arundel County Democrat and frequent critic of Ehrlich. "It's an initiative we all should embrace."

State labor union representatives are wary of the pledge until they see specifics.

"The first question that comes up is `How is it going to be paid for?'" said Sue Esty, a lobbyist with the American Federation of State, County and Municipal Employees. "I've heard it is going to be out of the agencies' own budgets. If it means layoffs or extreme shortages in staff, that makes it very painful."

Administration officials would not provide specifics yesterday.

In a meeting with editorial board members of The Sun yesterday, state Budget Secretary James C. "Chip" DiPaula Jr. said the administration would propose today filling a $700 million gap between projected revenues and expenditures through $300 million in spending cuts and $400 million in new revenues.

The governor will propose many fee increases but no broad-based income or sales tax increase, and he is planning on no money from slot machines.

He does, however, want to charge those who earn income in Maryland but live in states without income taxes -- a group that includes athletes and entertainers -- an extra income-tax charge equivalent to what Maryland residents pay to counties. The state, however, would keep the money, anticipated at $36 million yearly.

Ehrlich is also relying on an attorney general's opinion to withhold $45 million that larger counties were expecting as part of a public schools funding initiative known as the Thornton plan.

The governor will exceed a voluntary spending-growth limit set by the assembly, but DiPaula said that strong economic growth could provide more tax revenue for the state than now expected, pushing the growth target higher.

The state will trim costs in its Medicaid programs by changing eligibility requirements and charging higher payments, DiPaula said. After looking at other states, DiPaula said, he determined that "we have a very generous Medicaid program."

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