Year S Budget

A state takeover and a freeze on city funds were among the sanctions proposed yesterday as elected officials at City Hall and the State House reacted to the disclosure that the Baltimore school system's $1.2 billion budget is riddled with errors. On the final day of the General Assembly session, lawmakers summoned school officials to Annapolis to question them about a Sun article reporting tens of millions of dollars in discrepancies in the budget the school board approved March 27. In dozens of cases in the budget for the next school year, as well as in the budget for the current academic year, the amount listed for salaries does not match the number of people who are supposed to be paid.

When Gov. Martin O'Malley began discussing the state budget deficit with a group of businessmen at a Frederick County Chamber of Commerce luncheon last week, he pitched his administration's frugality as the first step in putting Maryland's fiscal house in order. "We are going to solve it in a number of ways, and in fact, we have already begun," the first-year Democrat told the crowd. "The budget that we introduced and that the General Assembly passed almost unanimously was a budget wherein the size of your state government, spending-wise anyway, grew by only 2.7 percent, compared to 12.5 percent growth the year before.

Even as the fiscal picture in Maryland brightens, Gov. Martin O'Malley called on the federal government Wednesday to provide more help to states that are laboring to keep their budgets balanced. The governor's plea came as state analysts announced that Maryland's revenue projections have fallen $77 million more for the current fiscal year and the next. While that means O'Malley will have less money for next year's budget, which he will present to the General Assembly in January, the decline was far less precipitous than previous Maryland revenue adjustments during the recession.

Baltimore Budget Director Edward J. Gallagher cannot say it any simpler: City coffers are about to run dry.The 17-year budget director, who served through the administrations of the past three mayors, delivered the bad news this week during budget deliberations.City Council members are now looking at taxing everything from boat slips to cellular phones to make up a projected $153 million deficit over the next four years.Under state law, the city cannot end the year with a budget deficit. That means the council and Baltimore's next mayor will have to slash basic services or find new tax money, Gallagher said.

Gov. Martin O'Malley will present about $300 million in state budget cuts today to the Board of Public Works, as fiscal analysts warned that the state's financial outlook is rapidly deteriorating. The board, made up of the Democratic governor, Comptroller Peter Franchot and Treasurer Nancy K. Kopp, is expected to approve the budget-balancing plan, which also includes transfers from other accounts to create a $150 million cushion in the $14 billion operating budget. "It's going to cause some pain and discomfort all around.

A county advisory panel is drafting formulas to limit annual budget surpluses, capital spending and long-term debt to relieve the burden on Anne Arundel taxpayers.The recommendations of the Spending Affordability Committee could allow a 1992 operating budget $21 million to $27 million larger than this year's $617 million figure.The committee, which has a report due Friday, was created by voters last year to advise the county executive, County Council and Office of the Budget.The report will probably urge that any surpluses be committed to the following year's budget, ending the practice of fourth-quarter appropriations under former Executive O. James Lighthizer, chairman Bennett Shaver said.

Howard County's roller coaster revenue ride is headed sharply higher again, with officials reporting a surplus of $20.4 million for the fiscal year that ended June 30, compared with less than $1 million two years ago. About two-thirds of the surplus, $14.4 million, is available under county law for emergencies or one-time expenditures, and $6 million has been set aside to bolster the government's Rainy Day Fund, a hedge against bad times. The amount available for spending is 2.5 percent of the total budget.

County Executive Robert R. Neall asked county legislators yesterday to fight massive cuts in state aid proposed for local governments by Gov. William Donald Schaefer."

Baltimore State's Attorney Patricia C. Jessamy put her prosecutorial skills to work yesterday as she went before the City Council to make her case for a $1.2 million budget boost. She unveiled big, colorful charts detailing her agency's budget woes. And she delivered compelling testimony about the potential for a public safety "crisis" if the city does not give her agency adequate financial support. But Jessamy's plea for $1.2 million more from Mayor Martin O'Malley's 2006 budget did not meet with a positive reception from council members, who will render their final verdict next month when they vote on the mayor's $2.32 billion spending plan.

Howard Community College employees will pay more for their medical insurance and evening students will not get expanded financial aid services if the County Council goes ahead with a proposed $200,000 cut in the school's $23.6 million operating budget request for next fiscal year.Other areas, such as staff development and entrance testing for students, also would be hit hard, said Dwight Burrill, the community college's president.He called the $200,000 cut proposed by County Executive Charles I. Ecker a serious blow to the college, even though Mr. Ecker is still proposing to give the college $525,000 more than it got in the current fiscal year's budget.