Schaefer halts plan to lay off state workers Legislators pressure governor to look at budget moves again


ANNAPOLIS -- Gov. William Donald Schaefer reversed himself yesterday and announced that "at this time" there would be no layoffs of state employees even though three days earlier he had insisted that firing at least 1,800 people to balance the budget was "unavoidable."

At a news conference with legislative leaders, the governor said he was convinced that less drastic measures might suffice to close a remaining $243 million budget gap -- but he did not rule out a return to layoffs as a solution.

State House sources said the governor relented under pressure from legislative leaders and from members of the Board of Public Works who might have been asked to approve the layoff plan Wednesday.

To proceed with his layoffs, Mr. Schaefer needed support from at least one other member of the board.

That one vote apparently was in doubt. Mr. Schaefer and his budget secretary, Charles L. Benton, heard substantial concerns in recent days from state Treasurer Lucille Maurer and Comptroller Louis L. Goldstein, the other members of the board.

The governor met briefly yesterday morning with Mrs. Maurer, who has been an influential sounding board for him. She said later that she was concerned about a number of issues raised by the layoff proposal, including the abruptness with which it was proceeding and the two-week notice that was contemplated.

With more information, she said, the state might decide it does not have to lay off as many people as the governor proposed.

"We may come out at the same spot later, but we will have had the benefit of some reflection," Mrs. Maurer said. She said some of the urgency has come from the budget preparations for fiscal year 1992, which must be completed soon.

Maryland ultimately must reduce the size of government or increase revenues, she said. Mr. Schaefer has said he will not raise taxes to close the budget gap.

Mr. Goldstein, out of town yesterday, was unavailable for comment.

Mr. Schaefer met for breakfast yesterday at 7 a.m. with Senate President Thomas V. Mike Miller Jr., D-Prince George's, and House Speaker R. Clayton Mitchell Jr., D-Kent. He emerged from that meeting still determined to make the cuts, legislative sources said.

By 1 p.m., however, after Mr. Miller and Mr. Mitchell renewed promises of cooperation and after his meeting with Mrs. Maurer, the governor told reporters he might have gotten things "a little out of perspective." He said the legislative leaders had been right to caution him against communicating the idea -- via his layoff proposal -- that Maryland faces "a panic situation."

Mr. Schaefer said the legislators had argued that, compared with the multibillion-dollar deficits in other states, Maryland's shortfall is "relatively modest."

Not renowned for their togetherness, the three state leaders were a chorus of sweet harmony yesterday.

Pressed to define more specifically what they meant by ruling out layoffs "at this time," neither the governor nor the two legislative leaders would be more specific.

"Nobody knows what will happen tomorrow morning," Speaker Mitchell said.

Mr. Miller said the legislature is aware that the deficits are not a temporary problem. "Quick fixes," he said, are not going to be sufficient. But he added, "At this point, our problem is manageable."

Pressure to solve both the short- and long-term budget problems drove Mr. Schaefer toward a pink-slip solution, but he said he had had time to reconsider cost-saving proposals made by the legislature. All the proposals, legislative and executive, he said, are "back on the table."

He did not identify the point in his thinking when "unavoidable" became avoidable.

A source involved in the discussions suggested that Mr. Benton advised him during yesterday's meetings that "flexibility" offered by the legislature would permit a more careful consideration of immediate and long-range remedies.

Certain options -- transferring money from such special projects as the transportation fund back to the general fund -- require the legislature's approval, and the two presiding officers gave their commitment to them yesterday.

Mr. Schaefer said much of the state's lack of maneuvering room on budget matters is created by health and social-service programs ordered by the federal government. He called the mandated programs "a tremendous headache that must stop somewhere along the line."

During his news conference yesterday, he said government must take "a whole new look at what we do with the budget."

"And we're going to be making some tough decisions," he added. "Some of the things the state has been doing we may not be able to do. Possibly we overextended ourselves."

State employee unions applauded yesterday's announcement. But the president of one, Joel Dan Lehman of the Maryland Classified Employees Association, said he would go through with a rally against layoffs Tuesday evening at the State House.

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