State Treasurer Nancy K. Kopp, who sits on the board with Franchot and Secretary of Budget and Management T. Eloise Foster, said that although economic times are tough, they do not rival the early 1990s, when Maryland faced its worst financial crisis since the Great Depression. In 1992, revenues slid so precipitously that lawmakers had to call two extra General Assembly sessions to balance the budget.
Lawmakers and state officials who opposed the special session on the grounds that the economy was too uncertain to make budget decisions at the time took the figures as a vindication. But others defended it, pointing out that lawmakers went a long way toward closing a $1.7 billion budget shortfall and managed to fund a number of new initiatives in the process.
"None of us can predict exactly where the economy is going to be, but you do try to set your initiatives and what you want to accomplish for the citizens while you're in office, and I think that was the overall framework which we came to Annapolis and worked under," said House Speaker Michael E. Busch.
General Assembly leaders had been preparing to make between $100 million and $150 million in cuts to O'Malley's budget before the estimates. Now they will have to go further to balance the budget and provide a cushion should revenues slide even more.
Republican legislators have long argued the state needs to severely curtail its spending. The House Republican Caucus proposed an alternative budget plan Tuesday that members said would have cut enough to allow a repeal of the computer services tax and add to the rainy day fund.
"This was what we said was likely to happen," Del. Anthony O'Donnell, the House minority leader, said of the decision to hold a special session before the economic outlook was clear. "It's not like we had an epiphany with respect to what was going on with the economy. All the warning signs were there in late summer.
"The General Assembly and the governor continue to spend way too much money," he said. "We need to rein in that rate of growth in spending. When are they going to start listening? How much evidence do they need?"
Busch said his chamber would begin making targeted cuts soon. He said he expected his chamber would try to preserve environmental, health care and education programs as much as possible but he did not foresee major differences with the Senate.
