Gov. Martin O'Malley and the Democratic- controlled General Assembly will begin the 90-day legislative session Wednesday with one eye on the battered budget and the other on this fall's election.
Even as they grapple with the budget, lawmakers are also expected to contend with a raft of policy issues of interest to voters.
Chief among them is whether to reregulate energy, an idea that O'Malley pushed last year but might back away from this session.
Topping the public safety agenda are tweaks to the new death-penalty regulations and changes to sex-offender and gang laws.
And lawmakers may revamp the unemployment- insurance program and the way teachers are evaluated and compensated. All 188 lawmakers and the Democratic governor are up for re-election in November.
A primary challenger and Republican challenger, both relatively unknown, have said they will square off against O'Malley, but he is preparing for the possibility that former Gov. Robert L. Ehrlich Jr., who lost to O'Malley in 2006, will get into the race.
The election means that the governor and lawmakers will likely plug a $2 billion budget hole without rankling voters by raising taxes or slashing major programs.
Yet in the second year of significant budget woes, leading lawmakers say there's no way to avoid pain.
State workers can expect another round of unpaid leave and salary freezes. Most local governments will see another year of drastically reduced transportation money.
"The cuts that have been made previously are going to have to be continued," said Senate President Thomas V. Mike Miller, a Democrat representing Calvert and Prince George's counties. "But they're going to be greater."
Republican lawmakers -- who see this fall's election as a chance to pick up seats in
Annapolis -- argue that more sweeping structural changes must be made.
"We should have been more cognizant of the problems that were facing us," Sen. Allan H. Kittleman, the Senate minority leader and a Howard and Carroll Republican, told a group of lawmakers and local government officials at a Maryland Association of Counties conference last week in
"The only reason that we can continue to survive is because we live off the federal government. If we didn't have the federal government, we would be in real, real trouble."
O'Malley is scheduled to unveil his budget next week, which he has said will keep intact all the cuts made during last year's legislative session and afterward by the state's spending panel. The governor also must find about $1 billion in new reductions.
Lawmakers can cut but not add to the budget, and Miller said lawmakers will likely turn their scalpel to some areas of spending that O'Malley, a former Baltimore mayor, has tried to shield, including stem cell research, historic preservation and aid to local governments.
"The governor has been very protective of the counties -- I mean extremely protective, to the detriment of the state," Miller said in an interview last week. "But that gallantry cannot continue."
About 40 percent of the state's roughly $12 billion operating budget goes to the 23 counties and Baltimore. All but a small fraction of it is tied up in mandatory education funding.
At the Cambridge conference, local officials said they were bracing themselves.
Sen. Ulysses Currie, chairman of the Budget and Taxation Committee and a Prince George's County Democrat, said local governments had not endured any "significant cuts" so far, a comment that drew grumbles in the audience of mostly county administrators.
"There's very little left for us to squeeze,"
Howard County Executive Ken Ulman, a Democrat, said afterward. "I cut every single area of our budget, except I gave an increase to schools. We need some flexibility."
A task force of lawmakers, including Miller and Michael E. Busch, the Democratic speaker of the House, studied education spending last year and is preparing to introduce legislation that could help counties waive some of the state's mandatory annual primary education spending increases, called "maintenance of effort."
The state school board has been loath to allow maintenance-of-effort waivers, but Busch, who represents Anne Arundel County, told local officials Friday in Cambridge that proposed legislation this year could force it to grant more.
Apart from the budget tasks ahead, several major policy issues have emerged. Energy re-regulation, an O'Malleybacked bill that passed the Senate last year but was batted down in the House, will be introduced anew by both Republican and Democratic senators, Miller said.
But O'Malley might not fight for re-regulation -- a departure from the last time he faced voters, when fighting utilities and lowering electricity bills were a central theme of his campaign. He also personally pushed for re-regulation just last year.
The governor's chief legislative officer, Joseph C. Bryce, said it is too soon to say whether the governor will back another bill.