State lawmakers struggling to balance the Schaefer administration's proposed $11.6 billion budget have been looking at more than new taxes to send out the message that money is tight.
In an unusual policy move, a House budget committee yesterday approved an amendment to the budget-balancing bill that would make counties shoulder increased costs of Social Security taxes if they give employees pay raises this year.
House Speaker R. Clayton Mitchell Jr., D-Eastern Shore, said the measure is intended "to send a message back to the counties" that the General Assembly is not encouraging pay increases for government workers until the state's economy rebounds from the recession.
Del. Charles J. Ryan, chairman of the powerful House Appropriations Committee, said it would be unfair to use state money for salary increases at lower government levels when state employees will receive no raises.
But the measure, which was expected to come before the full House today as part of a budget-balancing bill, fell far short of an earlier threat by key lawmakers to cut up to 25 percent in state aid to subdivisions if local governments used the funds to give pay raises to employees.
Gov. William Donald Schaefer's proposed budget, which was trimmed by about $120 million last week by Appropriations, contains no money for state employee raises. Budget limitations also mean that state workers will go without planned salary increments, must make higher weekly payments toward their health insurance and are likely to face a longer workweek after July 1.
News about the 25 percent measure had spread quickly and set off protests from teachers' unions and county government officials.
Ryan, D-Prince George's, said his office began receiving calls yesterday from government-employee groups expressing opposition.
"I'd like to find some ground where we could urge that this be done in a sense of cooperation," Ryan said yesterday shortly before he and other House leaders abandoned the plan to cut state aid by 25 percent.
While the Social Security proposal received a majority vote among committee members, not all delegates were pleased with it.
"This is like trying to hit an elephant with a fly swatter," said Del. John G. Gary, R-Anne Arundel, who accused House leadership of "backpedaling."
"We've backpedaled to the position where we have the votes to pass it [the Social Security measure]," countered Mitchell, who said there was much doubt about whether the House would support the 25 percent plan.
Although he said he was unsure what position his organization would take on the Social Security measure, Karl K. Pence Jr., vice president of the Maryland State Teachers Association, said he was pleased that the committee backed off from the plan to withhold up to 25 percent of state aid to counties that give teachers raises.
Most county and municipal governments do not need the General Assembly to tell them how tough the recession has been, said Charles "Chip" MacCleod, associate director of the Maryland Association of Counties, which represents county interests in Annapolis.
"The counties are not immune from budget gaps and deficits," he said. "We're feeling the same things."
MacCleod said the state's 23 counties and Baltimore are facing tough budget decisions this year, with about half the subdivisions trying to avoid deficits.
"I'm confident that's enough for us to get the message," he said, adding that MACO generally opposes any additional moves by the legislature to restrict by law how counties can spend state aid.
In an effort to balance the governor's proposed budget and to build support for new taxes, Appropriations cut deeply into local program budgets, including the amounts the state distributes to local school systems, fire and ambulance services, resident state trooper programs and police foot patrols in Baltimore.
At the same time, House leaders, who this year must deal with the budget before it is sent to the state Senate, plan to offer two new tax measures that would raise almost enough money to reinstate the $74 million in cuts in local aid.
One measure, expected to raise about $30 million annually, would expand the state sales tax to include purchases of cigarettes and other tobacco products. The other measure would repeal the state's 40 percent capital gains tax exemption and would raise about $40 million.
The strategy behind the tax bills, according to Ryan, is that lawmakers must either accept the cuts in local aid or approve the new taxes.
The gambit may work in the House where Speaker Mitchell, an early opponent of any new tax increases, lately revised his position to "no new major taxes."