Democrats, who control both chambers of the legislature, emphasize that many states are in far worse shape, noting that California teeters near insolvency. They maintain that O'Malley was prescient in putting Maryland on more solid financial footing.
"Through no fault of the state of Maryland but because of the national economy, we're in this position," House Speaker Michael E. Busch said.
But Republicans contend that O'Malley's stewardship is partly to blame for the financial morass. They say the $1.3 billion in tax increases worsened the economic decline and criticize the administration for not slowing spending further. Last week, the Maryland GOP formed a partisan commission to make recommendations for tax relief. Members plan to travel the state and hold town hall meetings.
"I can't deny there is a national part to all of this, but Maryland has been responsible for our poor budget position," said Senate Minority Leader Allan H. Kittleman, who represents Howard and Carroll counties. He called for a spending freeze. "We can't have anything that's sacred where we say, 'We're not going to cut that program.' "
The state's finances have deteriorated so much that several initiatives championed by O'Malley could be curtailed, including an expansion of Medicaid eligibility and a tuition freeze at state universities. And a multimillion-dollar fund created to combat pollution in the Chesapeake Bay is likely to be reduced to a nominal sum as a placeholder, lawmakers and aides said.
The $1.9 billion shortfall represents the gap between anticipated growth in programs and incoming revenue. Because sales and income tax receipts have slowed considerably, freezing spending resolves only about half of the problem.
O'Malley and lawmakers do have budgetary maneuvers at their disposal. They could transfer money between accounts to close the budget gap and could dip into the state's more than $700 million rainy day fund. Last week, a proposal emerged to tap an unused $366 million tax reserve fund kept by the Maryland comptroller's office.
A federal economic stimulus package that includes state aid also could ease the problem. Congressional leaders are working on a proposal for President-elect Barack Obama to sign after he takes office that might include money for Medicaid and infrastructure projects - and could shave several hundred million dollars from Maryland's shortfall.
Nonetheless, steep budget cuts in some areas of the state's budget will be unavoidable.
