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Localities, schools, colleges face uncertain budget picture

Budgets and BudgetingColleges and UniversitiesLocal GovernmentJustice SystemKevin Kamenetz

Local government and university leaders are struggling to craft spending plans amid uncertainty over the state budget — and how a package of threatened cuts might affect schools, roads, public safety and other basic services.

Officials throughout Maryland are pressing lawmakers to return to Annapolis and settle budget business left unfinished when the General Assembly session ended this week. The failure to come to an agreement by Monday's deadline raised the specter of more than $500 million in reductions, much of it in local aid.

"Everybody is still in shock," said William E. Kirwan, chancellor of the state university system, which would stand to lose up to $50 million — a reduction that he said could lead to a sharp tuition hike. "We're in uncharted territory, so I'm hearing lots of questions about 'what does this mean and how does it get fixed?'"

A state budget analysis estimated that Maryland's 23 counties and Baltimore City stand to lose a total of about $262 million, with the impact expected to hit especially hard in the city, where schools depend on the state for 70 percent of their revenue.

Though many believe the state will resolve the impasse over the budget before the cuts can take effect, the uncertainty over how and when means officials have to make decisions without necessary information about state aid. School administrators in particular face deadlines for hiring teachers and figuring out course schedules.

On Wednesday, Gov. Martin O'Malley, a Democrat, said he would not call lawmakers back to Annapolis unless legislative leaders strike an agreement to avoid the cuts.

Baltimore County Executive Kevin Kamenetz, who is scheduled to submit his 2013 spending plan Thursday to the County Council, said he was "reasonably confident" that there will be a deal. But he added that it would best be done "sooner rather than later. … I think next week is a good time."

"Obviously, it's a difficult situation," Kamenetz, a Democrat, said Wednesday. The county has no way to add money to its budget after it is approved, and he said his plan doesn't account for any cuts because he doesn't have final numbers. The budget must be passed by June 1.

The threatened reductions come after several years of lean budgets for local governments, who say that even a 1 percent decline in revenue will cut into vital government functions.

Along with uncertainty about potential state aid cuts, counties also are left to wonder how much of the cost of teacher pensions the state will decide to shift to them. A bill to settle that matter, along with a tax increase that would have avoided more than $500 million in cuts, died in the closing minutes of the 90-day legislative session.

"The longer the counties go without certainty, it makes it much more difficult for them to put their budgets together," said Andrea Mansfield, legislative director for the Maryland Association of Counties.

"We're all waiting to see what happens in Annapolis," Ray Wacks, Howard County budget administrator, told members of the County Council on Tuesday. County Executive Ken Ulman, a Democrat, is supposed to present the budget April 20, and the county charter says the plan has to be adopted by May 31.

Wacks said in an interview that he is estimating $9.6 million in state cuts. That's a bit more than 1 percent of the current $854 million budget, but Wacks said the impact would be greater than those numbers suggest.

"It's really not 1 percent of the total budget," Wacks said, because in 60 percent of the budget there's no discretion for cuts. The county, for instance, has to pay $5 million more for education to avoid potential state penalties.

 "We have additional costs. We've been busy cutting costs," said Wacks, including holding police positions vacant and cutting back on filling potholes.

In Baltimore County, officials estimated they would lose $14 million to $21 million in state aid; the current budget is $2.6 billion. Kamenetz said the cuts would likely come in education, public safety and health and human services, but he said it was too soon to be more specific.

Vicki Almond, chairwoman of the Baltimore County Council, said the possible state aid cuts are not nearly as deep as she had feared.

"I think we're faring rather well," said Almond, a Democrat. "I'm surprised that it isn't more."

The situation could be more dire elsewhere.

The Baltimore City school system would be hard hit. Andrés Alonso, the city schools CEO, said the impact of the state budget as it stands would surely be felt in the classroom. School officials say they stand to lose nearly $34 million in funding; the current budget is $1.3 billion.

At Morgan State University, administrators were facing the possibility of a 10 percent reduction from its operating budget.

"We would really struggle to try to maintain the quality of our academic programs," said Morgan President David Wilson, adding that many students could not afford the 12 percent to 15 percent tuition increase that would be needed to cover the shortfall. The school would have to consider eliminating programs and instituting furloughs for faculty and staff.

Kirwan, of the state university system, said his cuts could approach $50 million, or about 5 percent of the general budget.

"Obviously that would wreak havoc on many things," Kirwan said. "We would probably have to offset that with significantly higher tuition, way above the 3 percent we were expecting based on the governor's budget."

He said he was taken aback by the General Assembly's failure to complete their work on time.

"I was stunned," Kirwan. "Quite frankly, I find it a little disturbing. There was such a stark difference between Maryland and most other states in the way we weathered difficult budget times. But this makes us look like all the others."

Baltimore Sun reporters Jessica Anderson, Liz Bowie, Erica L. Green, Alison Knezevich Julie Scharper and Childs Walker contributed to this article.

arthur.hirsch@baltsun.com

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