Budget Deficit

Baltimore-area school superintendents called into question Wednesday a suggestion by Senate President Thomas V. Mike Miller that they cut administrators and public relations staffs to help ease the state's budget woes. Miller's comments were made in a Tuesday forum previewing the General Assembly session, as he referred to the more than $1.5 billion budget deficit anticipated next year - a shortfall that Maryland will not resolve by cutting teachers, unlike other states, he said.

Baltimore-area school superintendents called into question Wednesday a suggestion by Senate President Thomas V. Mike Miller that they cut administrators and public relations staffs to help ease the state's budget woes. Miller's comments were made in a Tuesday forum previewing the General Assembly session, as he referred to the more than $1.5 billion budget deficit anticipated next year - a shortfall that Maryland will not resolve by cutting teachers, unlike other states, he said.

Gov. Martin O'Malley learned last week why to hate economists. In the same week that Federal Reserve Chairman Ben S. Bernanke declared the recession "very likely" over and less than a month after shrinking the state's general fund budget to three-year-old levels, he's now been told he must cut about $300 million right away - and instead of a $1 billion shortfall next year, it looks to be $2 billion. Forecasts, shmorecasts. Like a concrete block tossed in a pond, the ripple effect of high unemployment rates continues to spread long after the initial splash.

President Barack Obama is expecting a breathtaking $1.75 trillion federal budget deficit for the coming fiscal year and making an even more amazing promise - to cut the annual shortfall in half by the end of his first term. Closing that deal will require all of the president's persuasive skills and a large measure of luck. It's a monumental task, and Mr. Obama is hoping for the current deep recession to end and brisk economic growth - twice the rate of the Bush years - to resume next year.

With its decision this week to pump another $1 trillion into the financial crisis, the government eliminated any doubt that the country is on a wartime footing in the battle to shore up the economy. The strategy now - and in the coming Obama administration - is essentially the win-at-any-cost approach previously adopted only to wage a major war. And that means no hesitation in pledging to spend previously almost unimaginable sums of money and running up federal budget deficits on a scale not seen since World War II. Indeed, analysts warn that the nation's next financial crisis could come from the staggering cost of battling the current one. Just this week, new initiatives added $600 billion to lower mortgage rates, $200 billion to stimulate consumer loans and nearly $300 billion to steady Citigroup, the giant banking conglomerate.

The last time Baltimore officials outlined a dire budget deficit, the city raised a series of local fees, finished off the year with a surplus and then shaved two cents off the property tax rate. But that was 2005 and this is now, and the chances of a turnaround in these depressing times are slim to none. The scenario outlined last week by Mayor Sheila Dixon projects a $65 million deficit for the budget year that begins in July, lost revenue that could result in layoffs and cuts in essential city services.

Recent economic turmoil has diminished Maryland tax collections so much that legalizing slot-machine gambling would no longer be enough to solve the state's long-term budget problems, according to new fiscal estimates. A year ago, state officials hailed the closing of the so-called structural budget deficit - a persistent gap between revenue and spending of as much as $1.7 billion - after Gov. Martin O'Malley and the General Assembly approved a package that included tax increases, budget cuts and the slots proposal that goes before voters this November.

WASHINGTON - Compounding terrible economic news, budget officials announced yesterday that the federal deficit has soared to a record $455 billion, injecting new urgency into the closing days of the presidential campaign about federal spending, including efforts to stem the financial crisis. The final accounting for fiscal 2008 produced a larger shortfall than had been projected, reflecting the start of federal efforts to address the economic emergency. It is certain to become a significant campaign issue, confronting presidential candidates with new questions about their growing slate of proposals for new spending and tax cuts at a time when red ink is surging.

14 injured in train fire under English Channel COQUELLES, France: A fire broke out yesterday on a train carrying trucks under the English Channel between England and France, injuring 14 people and shutting down traffic in the underwater rail tunnel, officials said. About 100 firefighters from both sides of the channel got the blaze under control, but it was not entirely extinguished hours later, said Georges Bos, a spokesman for France's Pas-de-Calais region, which was handling the emergency response.

WASHINGTON - President Bush will leave his successor with a record-high budget deficit of $482 billion, according to an administration estimate released yesterday. White House officials blamed the slowing economy and a $150 billion bipartisan stimulus package for the worsening picture for the 2009 fiscal year, while Democrats put the blame on the president's tax cuts and poor fiscal management over his eight years in office. "The important point to remember is that near-term deficits are both temporary and manageable if, and only if, we keep spending in check, the tax burden low and the economy growing," said Jim Nussle, director of the Office of Management and Budget, which released the midyear budget report - the last of Bush's presidency.