The state's budget troubles just keep getting worse.
Gov. Martin O'Malley said Wednesday that he might need to close a further budget gap of up to $300 million this fiscal year with more cuts - on top of $735 million in reductions approved in recent weeks. State officials will know the extent of the writedown when a board that forecasts revenue collections releases its report Thursday.
"Hopefully, we're starting to come through the other side of this, but we have yet to see the rebound in the revenues," O'Malley told reporters. "All of the cuts become more and more painful each time. The limbo dance becomes harder and harder."
The continued funding squeeze has been met with increasing weariness. Last week, the Democratic governor indicated that the next round of bad news would mean $100 million to $200 million in cuts.
Past budget reductions have included layoffs, furloughs and closing state government buildings around holidays. Some decisions have sparked public outrage, including the planned closure of an Eastern Shore psychiatric hospital, while reductions in aid to local governments have hit core constituents. O'Malley offered no clues as to where he would cut again to keep the $13 billion budget balanced or whether more layoffs are coming.
The timing of the budget cuts also is unknown. The governor can take proposed midyear trims to the Board of Public Works for approval, but he raised the possibility that cuts would be addressed as he works to plug a projected shortfall of more than $1 billion in next year's budget, which would be submitted to the General Assembly when it reconvenes in January.
O'Malley blamed the revenue decline in part on the state's unemployment rate, which has risen even though Maryland employers have added thousands of jobs in recent months. State income tax and other collections have lagged as the recession has deepened, though the governor said he sees positive economic signs, such as stabilization in the real estate market.
Michael Sanderson, executive director of the Maryland Association of Counties, said "the state's own ability to forecast its revenue continues to fail them" and noted that local governments that rely heavily on state aid are also feeling the economic pinch from the recession.
"There's no doubt that county governments are worried about what role we may have to play in some sort of state budget reconciliation," he said.
