Two state agencies, the Departments of Natural Resources and Agriculture, get budget cuts under O'Malley's plan, primarily because the slowing housing market led to a drop in real estate transfer tax revenues. That reduces the money available to buy land for preservation, a goal of environmentalists who nonetheless praise O'Malley for not diverting those funds for other purposes.
"It's just a sign of the times," said Dawn Stoltzfus of the Maryland League of Conservation Voters. "The real estate market just tanked."
Next year the state budget, which must be balanced annually, could be further strained if voters don't agree in a November referendum to legalize slot machines. If that measure fails, O'Malley said yesterday, money would not be available to continue a freeze on tuition at state colleges and universities or for an expansion of health care coverage through Medicaid.
O'Malley said his plan is fiscally sound for the long term. It would leave a surplus of $177 million at the end of fiscal 2009 and a balance of $739 million in the so-called "rainy day" fund, from which he pulled $967 million to balance the budget last year.
"It's a tight budget," said Del. Murray D. Levy, a Charles County Democrat who serves on the Appropriations Committee. "This is the guy who cleans up after the party, and it's not fun. But it's absolutely essential that we do it and that we do it well. Over time people will appreciate the scope of his work."
Republican Del. Anthony J. O'Donnell, the minority leader from Southern Maryland, blasted O'Malley's budget as not slowing spending enough. Using a different measure that includes aid from the federal government, he said the $31.5 billion budget represents a 6 percent increase from a year ago.
"That to me is very stunning," O'Donnell said. "This governor just fleeced taxpayers in a special session. I am very disappointed that when Marylanders are obviously angry that this administration didn't have more restraint on spending."
Del. Norman H. Conway, the Appropriations Committee chairman, said his panel would look for additional spending cuts. Legislators cannot add to the governor's budget without finding sources of revenue.
O'Malley also unveiled his budget for capital projects yesterday. He proposes $333 million for school construction on top of $400 million that he set aside to fulfill a campaign pledge last year. He would distribute nearly $76 million to areas were education is more expensive, including Baltimore City.
