Yes, they're paper cuts, but they can go deep

October 16, 2008|By JEAN MARBELLA | JEAN MARBELLA,jean.marbella@baltsun.com

Maybe it's because we're already accustomed to talking about hundreds of billions of taxpayer dollars as casually as if it were pocket change. A $250 billion outlay to prop up the country's biggest banks? Big deal, when we're already committed to spend a total of $700 billion to bail out the markets.

So when the state Board of Public Works cut nearly $300 million in spending yesterday, for a moment it seemed as if they were talking about coins in between the sofa cushions. As in: Wake us up when you start talking real money.

Of course, $300 million out of a state operating budget of $14 billion is very real money, and the effects of the slashing surely will be felt in the coming year - from senior housing programs to juvenile services, from stem cell research to tourism development, from school breakfasts to wetlands restoration, all of which took hits of varying severity.

But it says something about the gravity of the national economic crisis, which prompted the state budget cuts, that yesterday's Board of Public Works meeting didn't draw the usual wailing - Not the zoo animals! Not the chess-in-schools program! - that comes when agencies and programs face the loss of funds. The cuts were approved unanimously by Gov. Martin O'Malley, Treasurer Nancy Kopp and Comptroller Peter Franchot. When so many live in fear of losing their homes or their retirement savings in the economic downturn, the elephants and the would-be chess masters can fend for themselves.

What little talk there was before the vote dealt with something found nowhere in the 13 pages of budget reductions, what Franchot called "the 800-pound gorilla in the room," what Budget Secretary T. Eloise Foster referred to as "this political chit-chat."

Slots, baby, slots.

Of all the unknowns in these uncertain economic times, Maryland's great unknown is slots. Up for referendum on November's ballot, voters will decide whether to allow slots machines into the state - and the projected $660 million that proponents say the gambling devices will add to state coffers every year once they're up and running.

But the economic downturn has added an extra layer of turmoil into the already heated slots dispute. This week, opponents had a new study to toss into the mix, from the University of Maryland, Baltimore County, that suggests that slots might prove to be "a wash" when you consider the amount of revenue they bring in versus the costs that they would generate, said Franchot, who is opposed to the machines. The study, paid for by an anti-slots group, points to the administrative costs to operating slots, plus the amount of money that would be diverted from the Maryland Lottery and other entertainment venues.

Then, of course, there is the unanswerable question of how the economic downturn would affect slots - with so many pensions and 401(k) accounts in the pits because of recent stock market wobbles, how many retirees are still going to be playing the slots, in Maryland or elsewhere? And if you can barely afford your mortgage, can you afford a slots excursion, even if it's closer to home?

That was really a discussion for another day, given that the Board of Public Works was discussing a budget that will guide spending before the first slot machine takes the first token in Maryland. No slots revenues figure into the 2009 budget.

And yet, even in its current theoretical state, slots are a lot easier to grasp than the typical line item in a budget. Many of the cuts felt like inside accounting - eliminating state jobs that were unfilled anyway, for example, or moving an expenditure from the general fund to a special one. In at least one case, more than $900,000 was slashed for a program that was initially funded but never implemented.

It's hard to imagine the leap from paper to the real world for many of the cuts: What will a 7 percent reduction in overtime over at Juvenile Services mean? A 5 percent reduction in some kind of child care and family support contracts?

Some of the biggest reductions, to the Department of Heath and Mental Hygiene, came in the way of reducing planned increases - nursing home providers, for example, were going to get a 6.5 percent increase, but now will get half that. It's put state officials in something of a bind - having supported a budget in the spring, they now have to make a case for a lesser one.

"I argued for the budget in April - the increases we had in there were deserved," said John M. Colmers, secretary of health and mental hygiene. "But circumstances have changed."

They have. Maryland's tax collections have plunged - and are expected to continue to do so. These cuts, officials promise, are only the beginning. With the bulk of state spending going toward health, education and public safety, these aren't just paper cuts.

"We don't make steel. We don't make goods," Kopp said yesterday. "We provide services."

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