Legislative leaders urging deeper state cuts Lawmakers, Schaefer must cope with revenue shortfall.


Legislative leaders and the governor disagree on precisely how to resolve the latest drop in state revenue estimates. But both sides are in accord on at least one thing lately -- neither wants to be the one to call outright for state employee layoffs and furloughs in order to balance the budget.

Key House and Senate leaders, who responded yesterday to a Schaefer administration plan to trim another $88 million from the current budget, urged deeper cuts in state agency spending.

Although they didn't tell Gov. William Donald Schaefer exactly where or what to cut in the agency budgets, they hinted broadly in a letter to him that some $3 million could be saved if he chose to initiate layoffs or one-day furloughs.

In response, an exasperated Schaefer accused the leadership of insensitivity when it comes to state workers.

"They think people should be laid off or furloughed," Schaefer told reporters. "I don't agree with that at all."

He said hard times have cost state employees pay increases and forced higher individual payments for health insurance.

"I think the employees this year have had enough hits," Schaefer said.

The layoff issue has become the hot potato of budget talks in Annapolis ever since the governor proposed -- and then withdrew -- a plan late last year to put 1,200 state jobholders out of work in order to prevent a deficit in the current budget.

As the shortfall in expected state revenues and increases in government spending grew to more than $500 million, the governor and the legislature have been exchanging plans to balance the budget.

So far, layoffs have been averted by imposing spending cuts in nearly every state agency, by deleting or postponing building projects, imposing a hiring freeze and shifting some money from a variety of special funds.

But as each round of cuts grew deeper, whispers of significant savings from layoffs and furloughs became louder in Annapolis.

Yesterday's exchange over the issue was the loudest heard in recent budget talks, although Schaefer insisted he will not be the one to take that step -- at least for now.

"I'm not interested in furloughs. I'm not interested in layoffs," he said. "I'm not going to go after state employees anymore, not in this budget, 1991. I don't know what's going to happen in 1992."

Schaefer said the $3 million in savings could be gotten by shifting additional money from the state's emergency "Rainy Day Fund." The governor wants $39 million transferred from the special fund to the current budget, but lawmakers said they are willing to give him only $28 million.

The recommendation to cut another $3 million from state agency budgets was not the only difference between the legislature and the governor over how to handle the latest budget shortfall, which was announced officially yesterday by the state Board of Revenue Estimates.

Legislative leaders decided to cut $7.2 million set aside to build a golf course at Rocky Gap State Park in Allegany County. The project was touted by Schaefer as an economic boost to Western Maryland.

The Rocky Gap money could be put back in the budget if the state gets a firm commitment from a private developer to build a conference center adjacent to the golf course, said House Speaker R. Clayton Mitchell Jr., D-Eastern Shore.

The governor was also angry with Mitchell and Senate President Thomas V. Mike Miller Jr., D-Prince George's, because they want to cut $2.5 million from the state's overseas economic development program. Schaefer suggested that the two legislative leaders have a "vendetta against economic development."

"I don't understand that," he told reporters.

Miller and Mitchell said they plan to stick with their counterproposals to Schaefer's latest budget balancing package and will include it in a "reconciliation" budget bill containing previous budgetary adjustments.

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