Budget

Lawmakers took steps yesterday to preserve money for stem cell research and a college tuition freeze pushed by Gov. Martin O'Malley as they combed through a $14 billion proposed state budget looking for cuts. A House of Delegates subcommittee rejected a recommendation to cut $13.4 million for stem cell research, choosing to commit $18.4 million to it, as O'Malley recommended. Some have argued that Maryland could reduce its funding after President Barack Obama lifted a prohibition on federal spending on embryonic stem cell research, but proponents said the state needed to maintain its biotechnology edge.

Even a $3.7 billion federal lifesaver isn't enough to solve all of Maryland's budget quandaries. While the state is now flush with federal dollars for education, Medicaid and infrastructure projects, other state functions, among them the prison system, mental health programs and juvenile justice, are facing significant cutbacks. In some cases, lawmakers and advocates have questioned how agencies will be able to function within constrained budgets. Meanwhile, the economy continues to deteriorate and state officials are bracing for more bad news later this month when the latest estimates of tax revenues are due. Analysts have warned that annual collections have fallen as much as $500 million below expectations for the current budget year and next.

A divided Baltimore school board debated yesterday the significance of errors in the budget it recently approved, with some members acknowledging that they had not read it line by line and others demanding to know how administrators will fix the problems. At the same time, school system officials said that all six staff members in the office responsible for preparing the budget are new to their jobs, with the most senior employee having been there for about seven months. The board's chairman and the head of its finance committee have played down the significance of a Sun report that the $1.2 billion budget for next school year is filled with mistakes, arguing that the problems were only a matter of presentation.

Dinner parties. Holiday fetes. Gifts, gifts and more gifts. With the holidays looming, it may be time to hone one budget-redeeming skill: Saying no. It may not exactly be in the spirit of giving. But learning how to decline some invitations now - and throughout the year - can be key to hanging onto cash for goals that are important to you. Consider the numbers: Some 40 percent of consumers have already started holiday shopping, according to the National Retail Federation, an industry trade association.

Some people just aren't interested in developing a personal budget. "It seems to me that budgeting is one of those topics no one wants to talk about," said Barbara Babcock, director of community services at Consumer Credit Counseling Service of South Florida. "Strangely enough, people always want to learn more about credit." Creating a budget is a chore, but it also has a reward. "It's not very exciting - how much fun did you think this was going to be?" said Jessica Cecere, president of Consumer Credit Counseling Service of Palm Beach County and the Treasure Coast of Florida.

WASHINGTON -- The National Security Agency is facing significant budget shortfalls as the spy agency scrambles to respond to a mounting electricity crisis, modernize its technology, maintain current operations and add workspace, congressional and intelligence officials say. As a result, they say, the NSA has slowed hiring, pared back upgrades in information technology, delayed equipment purchases and shut offices. The agency's director, Lt. Gen. Keith B. Alexander, is seeking an increase of nearly $1 billion in supplemental spending for 2007 and a similar boost next year as the White House finalizes its 2008 budget, current and former intelligence officials say. The money crunch comes despite a doubling of the NSA's budget since the terrorist attacks of Sept.

The difference in fiscal management between Annapolis and Towson is that while state lawmakers may brag about how they've stopped digging a hole in the budget, Baltimore County Executive James T. Smith Jr. has gone a step further - he has started filling it in. It may not grab headlines, but the $2.53 billion budget Mr. Smith submitted this week is as notable for what it excludes as for what it contains. It doesn't raise the county's property tax rate, and overall spending rises a reasonable 5.8 percent.

Annapolitans hoping for a rerun of last year's cut in the property tax rate should promptly tuck those hopes away. Even as she holds the line on taxes, Mayor Ellen O. Moyer's operating and capital budgets call for spending more to preserve historic properties, expand bus services and crime prevention and cover increased benefits to employees. The $74.3 million operating budget for fiscal 2008 -- a $5 million increase over the current year -- maintains the property tax rate of 53 cents per $100 of assessed value.

The Baltimore school board will hold a public meeting next week to address issues raised in a Sun article that found budgets for the current and upcoming academic years riddled with errors. Officials announced last night that they will have an "independent third party" review next school year's budget before the meeting, scheduled for 7 p.m. April 19 at school system headquarters, but they declined to say who that party is. The board held an emergency meeting yesterday morning to discuss the budget.

WASHINGTON -- When the Bush administration unveils its annual spending request today, it is expected to ask for a defense budget of $481 billion - near historic highs, even when adjusted for inflation. It will also ask for additional funding for Iraq and Afghanistan, taking the cost of those conflicts this year to close to $165 billion, and will present estimates for next year's costs that will push war spending above the total cost of Vietnam. But if the military's top officers have their way, today's proposal may be only a precursor to a future of even larger defense budgets.

Longtime Maryland Lottery Director Buddy Roogow, who has led the agency for 13 years, resigned Tuesday to take a job as executive director of the D.C. Lottery. "An opportunity presented itself," Roogow said in an interview. "I decided it's the right thing for me. It's a new challenge." His departure at the end of November comes as the Maryland agency is vetting bidders for licenses to operate slot-machine casinos in the state, and will eventually oversee the gambling operations when they open.

Fearing steep budget cuts that could lead to more furloughs, layoffs and cuts to state services, members of the American Federation of State, County and Municipal Employees are urging the state to dip into its $640 million rainy day fund. Normally, such an idea is heresy - bond rating agencies demand that the state keep at least 5 percent of its general fund in reserve to maintain our AAA bond rating (which was recently re-affirmed), and no matter how bad things get, Maryland never goes below that figure.

The news that a complex tax law change known as "combined reporting" could have resulted in $170 million in additional payments from businesses into Maryland's coffers if it had been in effect in 2006 is bound to reignite a familiar debate in Annapolis next year, with progressive groups on one side and the Chamber of Commerce on the other. The two sides have been duking it out over this issue for years, with proponents of combined reporting insisting it ensures that businesses pay their fair share and are unable to hide profits in other states, and opponents saying it would be a logistical nightmare.

Maryland faces a projected budget shortfall of nearly $2 billion next year, far more than expected, the state Board of Revenue Estimates reported Thursday. The gap means that the cycle of wrenching cutbacks will continue. Budget Secretary T. Eloise Foster said the widening gap became clear when updated projections showed a $920 million drop from previous revenue estimates, on top of the expected shortfall of more than $1 billion. The numbers form the foundation of the spending plan that Gov. Martin O'Malley will release in January, which by law must be balanced.

The latest round of Maryland budget cuts would cost 205 state employees their jobs and slash more than $210 million in funding for road maintenance, health care, community colleges and police funding in Baltimore and the 23 counties. Under the plan Gov. Martin O'Malley outlined Tuesday for $454 million in cuts, the state also would shut a minimum-security prison in Jessup by March and would close units at health facilities. The layoffs would be twice as many as in all previous rounds of O'Malley administration budget-cutting.

As Gov. Martin O'Malley prepares to announce $470 million in budget cuts this week, he has rejected proposals to severely slash funding for the Maryland Zoo in Baltimore and the Baltimore City Department of Social Services. The Democratic governor and former Baltimore mayor has been weighing recommendations for closing a projected shortfall in the fiscal year that began last month. In recent days, he and administration officials have been poring over options for line-item reductions to balance the $13 billion state operating budget.

If it were up to some budget-conscious Marylanders, state employees wouldn't get paid on their birthdays, and they would work in offices with thermostats set as high as 80 degrees in the summer. And while the citizens of the Free State are at it, they would raise money for state coffers by taxing commuters and collecting additional gun permit fees by easing restrictions on who can legally carry handguns. Gov. Martin O'Malley solicited ideas from the citizenry as he puzzles over how to slash another $470 million from a state budget that has already been whacked several times in recent years.

Baltimore's City Council president wants the fire chief to defend a budget-saving strategy that sidelines firetrucks and engines throughout the city on a rotating basis and introduced a resolution Monday evening that requests a public briefing on the plan. "It is an issue that keeps bubbling to the surface," said City Council President Stephanie C. Rawlings-Blake. "I'm not saying it was a good decision or a bad decision. ... It is important to take a step back and assess the effectiveness."

State and local officials headed to Ocean City for their annual convention this week are in a quandary: how to justify swank receptions and beach parties when times are tough and budgets are tight. Gov. Martin O'Malley decided over the weekend to cancel his planned reception for about 500 guests Friday at the nightclub Seacrets, saving the state $12,301.88 that would have gone for an open bar and renting the space. He and his aides concluded it wouldn't be appropriate to put on the soiree while the state is facing budget shortfalls of hundreds of millions of dollars.

Maryland is not the only state struggling with its budget this year, one of the most difficult in history for state governments that have been contending with a collective shortfall of more than $160 billion - and counting. The red ink is spilling across the country. California is laying off thousands of teachers. Pennsylvania hasn't been able to pay state employees because of a budget impasse. Delaware raised taxes on income, tobacco and businesses. Unlike the federal government, nearly all states must balance their budgets - and they have been slashing spending, increasing taxes and raiding reserves to address deficits for the fiscal year that began July 1. A handful of states still haven't agreed on a spending plan; others, including Maryland, face new shortfalls that opened after budgets were set. The size of Maryland's shortfall relative to its overall budget puts it in the middle of the national pack, according to a recent report by the Washington-based Center on Budget and Policy Priorities.