ANNAPOLIS - A Carroll County legislator says officials must use spending cuts, not tax increases, to balance the state budget.

"Additional taxes should be considered only as a last resort," Sen.

Charles H. Smelser, D-Carroll, Frederick, Howard, said last week.

Smelser, a member of the Budget and Taxation Committee and chairman of the Capital Budget Subcommittee, responded to the Schaefer administration's raising, for the first time, the possibility that budget problems may result in the layoffs of a few state employees.

Charles Benton, state budget secretary, said Gov. William Donald Schaefer is "looking at a few programs that could be eliminated" in the budget he will submit to the legislature in January. That would eliminate some jobs, but Benton said he does not know how many workers might be fired if layoffs become necessary, although "certainly it would not be in the thousands."

Benton's comments came after recommendations by the Spending Affordability Committee that the state budget grow by no more than 5.1 percent next year, an increase of $424.5 million over this year's budget.

He said that recommendation would provide little, if any, money for new programs, pay raises for state workers and new aid to local governments. An budget increase of 5.1 percent would be the smallest since the committee was established in 1982 to hold down the growth of state government.

William Ratchford, the legislature's chief fiscal adviser, said growth may have to be held even lower than 5.1 percent. Unless the economy improves, the state will not collect enough money next year to support even a $424.5 million budget increase, he said.

Schaefer is not required by law to comply with the spending limit proposed by the committee. But the legislature refused in 1988 and 1989 to let him exceed the committee's recommendations.

General Assembly leaders set an example for Schaefer by approving no-growth budgets and no general employee pay raises for their two staff agencies Tuesday.

"It seems to me that the legislature should be setting some sort of example," Smelser said. "The message of the election was that people think they have more government than they can afford."

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