Talk of budget cuts escalates

Deficits, voter mood bolster lawmakers to pare hundreds of millions from $13 billion plan

March 12, 2010|By Annie Linskey | annie.linskey@baltsun.com

A state Senate budget panel is poised to make deep cuts to Gov. Martin O'Malley's budget for next year, with some lawmakers discussing state spending reductions of $500 million to $600 million.

Such cuts, if they are made, would go far beyond the changes the majority Democratic body has made in past years to the governor's plan and reflects mounting concern among senators about growing deficits and a belief that voters want to see more fiscal responsibility this year.

The governor's $13 billion operating budget avoids major spending cuts to state services, instead relying on one-time accounting maneuvers and hundreds of millions in federal stimulus dollars to balance revenue shortfalls.

"You can't spend what you don't have," said Baltimore Democrat Nathaniel J. McFadden, a chairman of the Budget and Taxation pension subcommittee. He said he wants to see "something above $500 million" cut because he's looking ahead to next year when the state's operating budget will not be propped up by the stimulus.

Sen. David Brinkley, a Western Maryland Republican on the budget committee, said the cuts could go as high as $600 million. "They are realizing they are out of money, out of time and out of excuses," he said.

Any reduction of that magnitude would almost certainly require reductions in education, a part of the budget that previously has been considered untouchable. Health care and aid to local jurisdictions are other areas under discussion, although senators said everything is still on the table.

O'Malley's budget includes cuts to hospitals and continues a 10-day furlough plan for state workers, but avoids significant cuts to services. Rather, it relies partially on fund transfers, such as dipping into an account where surplus income tax receipts are temporarily held.

The Senate is examining the governor's budget first this year but is running a week behind schedule in part because of the area's recent snowstorms. Budget committee members held a series of private meetings during the past week to sift through options. They hope to have a plan in place by Monday, and the budget is expected to be debated on the Senate floor for a week. Then, the House of Delegate takes its turn.

"We are looking at all programs," said Sen. James E. DeGrange Sr. of Anne Arundel County, the chairman of a panel that oversees spending on public safety, transportation and the environment. DeGrange would not commit to a dollar figure for expected cuts but predicted "significant reductions."

He said that the budget committee needs to focus on addressing structural deficits in the budget. "It doesn't get better," he said. "You have to take action."

He hinted that certain spending "formulas will be looked at," although he would not specify which ones. Also, he said, some believe there has been "overfunding" of local government during past, flush years.

The committee is seriously considering a GOP plan put forward by Sens. Brinkley and E.J. Pipkin, who suggested $1 billion in cuts. Their plan relies heavily on moving half of the state costs of teacher pensions to local jurisdictions . "Everyone is scratching their heads over this," Brinkley said. "People are looking down the road and seeing that it is not going away."

It seems unlikely that the Senate would move half of the cost to local jurisdictions, but several members of the committee discussed transferring a smaller portion. A House Republican plan for reducing the budget does not touch the pension issue.

Budget Committee Chairman Sen. Ulysses Currie was more circumspect Thursday, saying only that he was "preparing to meet about cuts." He said his committee is working closely with the O'Malley administration and House budget committees to determine "if it is possible" to make the cuts.

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