When the state Board of Revenue Estimates releases its latest revenue projections next week, don't expect Maryland officials to panic -- even though the news could show another large hit on the state treasury.
Despite a steady stream of gloomy economic reports, legislative leaders and the governor's budget staff have good reason to shelve their differences and put on a collective happy face.
Lawmakers and state officials must reassure a visiting team of analysts from New York City's leading bond-rating houses next week that Maryland's budget problems are under control and that the state's top AAA bond rating should remain intact.
The state plans to put up $95 million in bonds for sale March 13 for various capital projects and other programs. Keeping its AAA rating, the highest given to any state, allows the government to borrow money at lower interest rates and save money.
Analysts from the three bond-rating houses -- Moody's Investment Services, Standard and Poor's and Fitch -- will meet in Annapolis next Thursday with Senate and House leaders as well as representatives from the Schaefer administration for a regular review of the state's financial condition.
Although the analysts' visit is routine, it comes just days after the Board of Revenue Estimates is expected to announce that Maryland's financial troubles are more serious than were anticipated.
State House sources said yesterday that the three-member panel, which periodically assesses how much money the state will receive in taxes and fees, is expected to lower its revenue projections again. The latest revision may require $113 million in additional cuts to the current year's budget and more than $100 million in cuts from the proposed $11.6 billion budget for fiscal 1992, sources said.
State budget experts have been meeting throughout the week to examine fresh financial reports and are scheduled to disclose their findings to Senate and House leaders tomorrow. The findings will be released Monday.
While the news will not be heartening to lawmakers, it should come as no surprise. The recession already has forced the Schaefer administration to make adjustments exceeding $400 million in order to balance the current budget.
Lawmakers say it is vital that they show the New York analysts they are unified over how to manage the state's ailing current budget, which by law must be balanced, and how they plan to solve expected shortfalls in the 1992 budget.
"It's important to let them know we recognize the severity of the situation and that we have a plan to manage within the constraints that we have now," said Del. Charles J. Ryan, D-Prince George's, who chairs the House Appropriations Committee.
Sharing Ryan's sentiment was Lt. Gov. Melvin A. Steinberg.
"The primary objective is that we balance the budget and live within our means," Steinberg said. "Both the legislature and the administration are in sync. The manner in which it will be accomplished will be decided this session."
Legislative leaders, including Ryan, are considering two early suggestions for balancing the proposed 1992 state budget, one to cut $213 million in spending and another to raise taxes by an undetermined amount.
One plan under discussion would raise $74 million in the budget year that begins July 1 through taxes on telecommunications services and sales taxes on cigarettes and snack foods.
Ryan and Sen. Laurence Levitan, D-Montgomery, who chairs the Senate Budget and Taxation Committee, plan to send a letter to local government officials next week urging them not to grant county and city employees any pay raises because of the state budget shortfall.
Lawmakers do not plan to give state employees any pay raises during the budget year that begins July 1. Some legislators worry about the fairness of sending state money to local governments to be used for salary increases for local employees.
Layoffs and furloughs for state employees -- the most dramatic ways to address the budget shortfall -- already are under consideration, said Levitan.
Concerned that the public perceives there still is budget fat that can be cut before taxes have to be raised, some lawmakers have been telling anyone who will listen that officials are looking at a very lean budget.
"We went on the Pritikin diet for the last six months," said Del. D. Bruce Poole, D-Western Maryland, a House leader.