O'Malley's frugality under scrutiny

Budget statements overstate savings, some experts say

July 23, 2007|By Andrew A. Green | Andrew A. Green,Sun reporter

When Gov. Martin O'Malley began discussing the state budget deficit with a group of businessmen at a Frederick County Chamber of Commerce luncheon last week, he pitched his administration's frugality as the first step in putting Maryland's fiscal house in order.

"We are going to solve it in a number of ways, and in fact, we have already begun," the first-year Democrat told the crowd. "The budget that we introduced and that the General Assembly passed almost unanimously was a budget wherein the size of your state government, spending-wise anyway, grew by only 2.7 percent, compared to 12.5 percent growth the year before. It all happened in that same flurry of getting sworn in and going to inaugural balls and did not get much attention, but our budget grew by 2.7 percent compared to 12 percent the year before."

O'Malley's statement, which he has echoed on a number of occasions, relies on figures that budget experts say overstate the impact of his fiscal restraint on the persistent gap between revenues and spending -- as much as $1.5 billion annually -- that is expected to begin next year.

True, spending under O'Malley this fiscal year is projected to grow at a slower rate than it increased in Republican Gov. Robert L. Ehrlich Jr.'s final-year budget, which ended June 30. Recent cuts O'Malley pushed through the Board of Public Works make the contrast even stronger. But the difference is not as stark as the new governor suggests. O'Malley's claim, based on total spending, ignores details about the nature of Maryland's fiscal crisis and about Ehrlich's budget that make a material difference in evaluating how his spending plan compares with his predecessor's, budget experts agree.

When those factors and the recent spending cuts are taken into account, O'Malley increased spending by about 6.4 percent and Ehrlich by about 10.5 percent.

Sen. David R. Brinkley, the minority leader from Frederick County, said he was "rolling my eyes" when he heard O'Malley compare his spending growth with Ehrlich's.

"He was talking apples and oranges, which, in their quest to rewrite history, he tends to be rather free with," Brinkley said. "It was just totally bogus."

O'Malley spokesman Steve Kearney said the figures the governor cites are the most appropriate ones.

"The simplest and clearest way to talk about budget growth is to take this year's budget, subtract last year's budget and figure out the percentage of growth," Kearney said. "That is the percentage the budget has actually grown. When people make budget comparisons, these are almost always the numbers they use."

The question of how much O'Malley restrained spending is important because the governor is using his administration's belt-tightening as a major part of his pitch for higher taxes. He has said that he could not ask voters to pay more to the state before he makes the government as efficient as possible, and his claim about restraining spending is a key part of his effort to convince the public that he has done so.

Unlike Ehrlich, O'Malley submitted a budget that was lower than the limit suggested by the Spending Affordability Committee, a group of legislators and outside experts who estimate how much budget growth the state's economy will bear. However, members of the committee said at the time that they wanted to set a high figure to give the new governor a chance to put his mark on state government.

"I was one who thought perhaps we should probably have been even more conservative in terms of what we did with this budget, but we wanted to work with the governor," said Sen. Ulysses Currie, a Prince George's County Democrat and chairman of the Budget and Taxation Committee. "The governor wanted to do some things. He made commitments during his campaign, and he honored those commitments."

O'Malley derived his numbers from simple comparison of the bottom-line totals for the size of the overall budget. By that measure, Ehrlich increased the budget in his last year from about $26.2 billion to about $29.5 billion, a difference of 12.5 percent. O'Malley's total budget, as enacted by the legislature, increased to about $30 billion, a difference of 1.9 percent, an even starker difference than the governor claims, according to figures from the nonpartisan Department of Legislative Services. The latest cuts bring that figure down to 1 percent.

Budgeting experts inside and outside of state government say the total budget figures that O'Malley is citing are not the best ones to use when discussing the budget shortfall.

The numbers O'Malley is using include both the general fund -- the portion of the budget that is funded entirely through tax dollars and that supports education and other general government services -- and a variety of special funds, such as the state's transportation trust fund, federal grants and other separate pots of money.

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