Budget woes take back seat to the election

August 20, 2010|By Annie Linskey, The Baltimore Sun

OCEAN CITY — — After three years of nonstop talk about budget doom, county leaders still able to afford the trek to their annual Ocean City conference are keeping such discussions to a minimum — leaving candidates for office to take up the topic.

Whoever crafts the next state budget — presumably Democratic Gov. Martin O'Malley or his likely opponent in November, Republican former Gov. Robert L. Ehrlich Jr. — will face a roughly $1.6 billion gap between expected revenues and planned spending.

And that's only one of the fiscal challenges on the horizon. Some portion of teacher pension costs could be moved to the counties. A group that is supposed to publish a report by December on the sustainability of the state's retirement system has not been appointed.

But the annual conference of the Maryland Association of Counties, which concludes today, hasn't had a single session focused on spending cuts or pension reform.

"I think we've had a little fatigue of the topic," said Michael Sanderson, executive director of MACO. "It is not like we just fell off the economic cliff."

There are other problems, he said. "We can't spend all our time talking about the budget."

Instead, budget ideas came from the campaign trail, with Ehrlich coming to Ocean City on Friday to announce that he would restore $60 million of the counties' road maintenance funds, replacing roughly 25 percent of the local aid that O'Malley has swept into the state's operating budget.

The governor, too, is expected to discuss the state's spending woes. He'll make his remarks during his address to county officials Saturday, though major announcements are not expected.

Spokesman Shaun Adamec said the speech will be about "leveling with the audience" rather than making "empty promises."

But among the top-level bureaucrats, the budget has taken a back seat in part because of uncertainty over who will be returning to Annapolis next year. Montgomery County Executive Isiah Leggett said he's had his hands full with hundreds of thousands of residents recovering from power outages.

"This is an election year," Leggett said. "You are not sure all the people are going to be around next year. … You are in a transition period."

Still, he said, the topic causes anxiety. He said Montgomery County, like others, is "suffering."

"We have adjusted. Made reductions. Increased taxes. We don't have the flexibility."

One difference this year: the absence of midyear cuts. Since he's been in office, O'Malley has gone to the Board of Public Works seven times to chop money from the budget. Last year at this time, he was preparing county leaders for $470 million in cuts.

In June tax revenues were up slightly, giving the state's cash balance a slight bump.

"That is a radical difference," said T. Eloise Foster, the state's budget secretary. She met with top county officials to deliver a 26-page PowerPoint presentation on this year's state budget and the implications of the recently approved federal Medicaid help.

"It was just a candid conversation," she said. "It wasn't antagonistic."

Sanderson said his group tried to include sessions at its annual conference that would "put a positive spin" on hard times. He pointed to one meeting geared toward marketing Maryland to outsiders.

Raising taxes is another potential budget-saving idea that is rarely discussed in an election year — and not one that officials wanted to mention. Nevertheless, sin-tax proponent Vincent DeMarco chatted up lawmakers and bureaucrats. The omnipresent lobbyist made an aggressive push last legislative session for a 10-cent tax on alcoholic beverages, and Friday he produced a list of 137 candidates who he said have pledged to support the tax boost.

When officials have to grapple with cutting favorite programs next year, he predicted, his idea will gain traction.

"It is definitely going to be one of the top issues next year," he said.

Ehrlich announced his proposal to give $60 million back to the counties while surrounded by Eastern Shore leaders before making the rounds at the conference — an event that draws the very local officials who must cut their own budgets when state money is not forthcoming.

Ehrlich said Friday that local leaders have begged him to give them more roads money. This fiscal year, the 23 counties are splitting $10 million — which for many places, meant a greater than 90 percent decrease in what they're supposed to receive. Baltimore City, which maintains all of its roads, got $130 million, less than it usually receives but still enough to anger some in the counties.

"It could be a good thing," said Charles County Democrat Murray D. Levy, a former county commissioner who lobbied hard in Annapolis to prevent cuts to local government aid. But he criticized Ehrlich for failing to detail how he would make up the $60 million shortfall. Until those details are explained, he said the proposal is merely "political talk."

Ehrlich has also promised to repeal O'Malley's penny increase to the sales tax, though he hasn't explained how he would make up the roughly $600 million in lost revenue to the state.

"Now you've got the campaign mode overlay, and some are saying outlandish things," said Baltimore County Executive James T. Smith Jr. "I don't think people buy it."

annie.linskey@baltsun.com

http://www.twitter.com/annielinskey

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