State weighs cuts in critical needs

O'Malley may target schools, health care

furloughs possible

October 09, 2008|By Laura Smitherman and Gadi Dechter | Laura Smitherman and Gadi Dechter,laura.smitherman@baltsun.com and gadi.dechter@baltsun.com

Amid a gloomy economy that has severely eroded tax collections, Gov. Martin O'Malley is considering steep cuts to public education and health care programs and might ask state employees to take a six-day unpaid leave.

The spending reductions under consideration total $397 million in a state general fund budget of $14 billion, according to a memo obtained yesterday by The Baltimore Sun. Budget Secretary T. Eloise Foster, who compiled the list, said in the memo that the cuts "will certainly impact services and programs," compared with previous budget-cutting that eliminated "non-contentious items."

The governor learned last month that the state faces a $432 million revenue shortfall that could rise to nearly $1 billion in the next fiscal year. It is a dilemma facing many states, as the foreclosure crisis and credit crunch shrinks the U.S. economy and ripples across the globe.

O'Malley needs to cut only about $250 million immediately, because he can tap into a relatively small pool of surplus funds. But he said he might make more trims as the economy continues to slide.

"Until we see some signs of rebound on the horizon, this is going to be a constant exercise in cutting," O'Malley, a Democrat, said yesterday. "So much of this depends on the economy."

The potential cuts under consideration affect more than a dozen state agencies and nearly every aspect of state government. Public safety, education and health care make up about 80 percent of the budget, and none is expected to be immune from the cuts.

Among the larger proposed reductions is $38 million from an education funding plan designed to provide extra money for school districts where the cost of education is higher; and $26 million to health care providers such as nursing homes and community health clinics. A mandatory furlough for all state employees could save as much as $48 million.

Other proposed budget cuts are more targeted. A proposed state police trooper hiring freeze could save $4.5 million, and the elimination of about 300 vacant positions for correctional officers and parole and probation agents could save $4.2 million.

Susan O'Brien, a spokeswoman for Maryland Families for Stem Cell Research, said a proposed $4 million stem-cell research reduction means Maryland risks "losing researchers and scientists to other states who are funding at higher levels."

But with $15 million left if the cut is made - the same amount as in the 2007 budget year, "Maryland still has a good program, and there's still money going out the door," she said.

Some programs could be eliminated entirely. One proposal withdraws $75,000 from Destination ImagiNation, a program in which students compete in brainstorming challenges involving such subjects as science, theater and leadership.

Many local government officials said they already have girded for reductions in state aid. "We knew there would be cuts. This is probably just the first round," said Anne Arundel County Budget Director John Hammond.

"It has been and will be a significant impact on our budget if this cut becomes real," said Sydney L. Cousin, superintendent of Howard County public schools. "This would have an obvious negative impact on our operations. It's not good news."

Higher education also could see less state help. Among the contemplated cuts is an $8.4 million reduction in state support for Maryland private colleges and $1.8 million less in state-sponsored scholarships and financial aid awards for needy students.

Tuition freeze would stay

Still, officials said they expect to continue a tuition freeze at the University System of Maryland despite potential cuts to its budget - $10 million reduction in operating funds and a $20 million raid on the system's bond fund. O'Malley has made maintaining a cap on college tuition a priority.

As for furloughs of state employees, O'Malley said yesterday that he would not pursue the proposal before speaking with groups that would be affected. But he said the sooner such a step is taken, the more flexibility workers would have for taking time off before the June 30 end of the budget year. Prince George's and Montgomery counties have also explored furloughs to help close their budget shortfalls.

With reports showing unemployment rising in Maryland, some lawmakers said furloughs would be preferable to layoffs.

"When people become unemployed, that is just a greater stress on the economy," said House Speaker Michael E. Busch, an Anne Arundel County Democrat. "There are going to be some significant cuts, and hopefully we'll be able to protect a lot of our priorities."

Patrick Moran, Maryland director of the American Federation of State, County and Municipal Employees, said he would seek a meeting with the administration to ensure that essential services aren't hampered. He suggested having state employees do some of the work that's now done by private contractors to save money.

Final list due Wednesday

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