O'Malley provides grim preview of budget

Hints at deep cuts; doesn't rule out hikes to gas, alcohol taxes

December 15, 2010|By Annie Linskey, The Baltimore Sun

Gov. Martin O'Malley said Wednesday that the state budget he proposes next month would be "more painful" than the last two, and hinted at deep cuts in spending.

"Once the legislature gets this budget, the immediate reaction will be 'surely there is another way,'" O'Malley said. "The pain will be so evident."

The state's legislative analysts are projecting a $1.6 billion difference next year between the state's expected revenues and its spending commitments. The size of the anticipated gap is consistent with those of previous years — but this time the state is not expecting federal stimulus dollars to help.

O'Malley has said his budget proposal would not include tax increases, but would rely instead on a "diet of cuts" to plug the hole. However, he did not rule out agreeing to raises in the gas tax or the alcohol tax, if they are proposed by the General Assembly.

"Right now, I'm preparing a budget," he said, deflecting questions about the two taxes.

Senate President Thomas V. Mike Miller has thrown his support behind an increase in Maryland's 23.5-cents-per-gallon tax on gasoline, which has not been raised since 1992. O'Malley said Wednesday that he and Miller have not spoken about the tax.

Some business leaders support the tax increase so long as the revenue it generates is directed where it is intended: transportation projects.

Also Wednesday, the governor said there have been "a lot of inquiries" about the $15,000 lump-sum buyout plan he offered to state workers in the executive branch. Roughly 25,000 to 28,000 are eligible for the plan, which could save $81 million if 1,500 participate — a figure he suggested Wednesday.

The plan is intended to encourage at least 500 departures, to comply with a cut the General Assembly imposed this year.

While the governor has been tight-lipped about potential areas for cuts, he said Wednesday that he might look at programs that had been spared in previous budgets. Those could include education and health care.

O'Malley sounded unenthusiastic about one quick budget fix: shifting some of the costs of teacher pensions to local governments. The governor said he does not believe the county coffers are "in any better shape" to handle that type of obligation.

The governor spoke after a generally upbeat briefing by state fiscal analysts on the Maryland's revenue projections. The state expects a $57 million bump in revenues to its $13.1 billion general fund this year. Projections for next year's fund are down by $8 million.

"We can all breathe a sigh of relief," said Comptroller Peter Franchot, who chairs the state's Board of Revenue Estimates. "But we cannot take our eye off the ball."



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