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State debates cutting local aid

New furloughs also eyed to fill $516 million budget gap

March 12, 2009|By Laura Smitherman , laura.smitherman@baltsun.com

Labor union leaders have balked at those proposals. They point out that state workers have already been asked to take up to five furlough days, which amounts to a pay cut, and are not getting pay raises next year.

"This is a time when the state has got to step up to the plate and be there for the people of Maryland, and this does not send the right message," said Patrick Moran, Maryland director for the American Federation of State, County and Municipal Employees. "At some point we have to say there are other places they need to look."

Legislative leaders also raised the possibility of cuts in aid to local governments, which accounts for about 40 percent of the state's operating budget.

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They noted that few jurisdictions have imposed furloughs on government employees, and Miller said some counties continued to cut taxes while state lawmakers met in a special session two years ago to approve $1.3 billion in tax increases and a plan to legalize slot machine gambling.

"We're prepared to make the tough decisions, but the counties and beneficiaries of the state budget are going to have to bear their fair share of the costs," Miller said.

Local governments will be confronting difficult budget choices in the coming weeks as the economy weakens and they prepare for the state to make good on threats that aid will be cut, said Michael Sanderson, legislative director for the Maryland Association of Counties.

"It's always appealing to shift some cost or some responsibility to a different level of government and then at least in part declare victory with your budget problem," Sanderson said. "But the problem has not disappeared; it only landed in someone else's lap."

Another option lawmakers are exploring would alter so-called disparity grants intended to help less-wealthy jurisdictions such as Baltimore City. The proposal would shift the $120 million cost to localities, so that more affluent areas such as Montgomery County would essentially subsidize poorer areas, but with smaller amounts. Baltimore City, for instance, would get about $7 million less.

An additional option would force localities to reimburse about $30 million in education aid they mistakenly received because of a miscalculation by the state. O'Malley had said those jurisdictions would be able to keep that money, but Miller said yesterday that "perhaps we can not be so generous."

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