The Glendening administration says it cannot release $21 million for projects funded by the national tobacco settlement, including high-profile anti-cancer initiatives, because of the state's squabble with Peter G. Angelos over legal fees.
The money includes $12 million that the University of Maryland Medical System and Johns Hopkins Hospital have been expecting for cancer research and other programs.
Administration officials said yesterday that the state has to keep the $21 million in escrow in case a judge rules that Angelos is entitled to a quarter of the $4.2 billion Maryland expects to get from the tobacco industry over the next 25 years. The state is contesting the fee, though it was part of its original contract with Angelos' firm.
Aides to Gov. Parris N. Glendening said they will have to hold on to the money until the dispute is resolved by the courts or through an agreement with Angelos. A Circuit Court judge is expected to take up the case in January, but if there are appeals, it could drag on for years.
"People will be disappointed," said Glendening spokesman Michael Morrill. "The governor shares their disappointment in having to defer any of this."
H. Thomas Howell, the lawyer representing the Angelos firm in its dispute with the state, dismissed the administration's explanation as " budgetary hocus-pocus."
"The figures in the budget have been manipulated deliberately to disparage the court and Peter Angelos when there is money in the budget to provide for the necessary medical research that the governor himself has proclaimed as a priority," Howell said.
Sen. Barbara A. Hoffman, chairwoman of the Senate Budget and Taxation Committee, called the deferral of the cancer research spending "very damaging." The governor should have looked to the state budget surplus to keep the projects on track, the Baltimore Democrat said.
"They made these decisions as a way to pressure Mr. Angelos, and I do not think that will either, No. 1, work, or No. 2, should be done," Hoffman said. Angelos, the trial lawyer who represented the state in its suit against the nation's tobacco companies, is a member of the University of Maryland Medical System board and a generous backer of Hopkins programs.
House Appropriations Committee Chairman Howard P. Rawlings saw the decision in the same light and predicted that it would not work with Angelos, who also owns the Baltimore Orioles.
"He's not a person who will respond to this kind of pressure," said Rawlings, also a Baltimore Democrat.
Glendening received support from House Speaker Casper R. Taylor, who said, "I think he has spread the burden in a responsible way."
Glendening was traveling in Ireland when the delays were announced, leaving the explanations to Morrill and Budget Secretary Eloise T. Foster.
Morrill said it is "beyond my comprehension" that someone would believe the governor would use the delays as a ploy in the Angelos dispute.
"It's patently stupid if someone would think that that's what it's about," he said.
The initiatives, which Glendening has championed, are at the heart of the governor's goal of making Maryland the leading state in the fight against cancer.
Foster explained the decision to delay the spending as strictly a budgetary issue. She said the state has identified more than $16 million in projects funded by the tobacco settlement that can be delayed. They include $9.75 million at the University of Maryland Medical System and $2.25 million at Hopkins.
Besides the cancer initiatives, the deferred projects include $3.7 million to bolster high-technology programs at state universities and $500,000 for the Maryland Digital Library. Foster said that unless the dispute with Angelos is settled, the state will have to find about $4.5 million in additional money it can defer spending.
The administration's is holding to its plans to spend $142.5 million of the $163 million in settlement funds originally allocated in this year's budget.
The governor decided to spare all of the programs related to delivery of anti-cancer services, smoking cessation, tobacco crop conversion aid to farmers, anti-smoking campaigns in schools and other education spending on kindergarten through 12th grade, including $6 million for private school textbooks.
Morrill said that curtailing the education programs now would be too disruptive and that the crop-conversion plan is on the verge of fulfilling Glendening's goal of getting Maryland out of the tobacco-raising business.
He said the anti-cancer programs, though they reflect the governor's priorities, are new ones that can be delayed with the least long-term damage.
The UM Medical System and Hopkins will each receive $1.5 million scheduled to be used to deliver anti-cancer treatment in Baltimore.
Dr. Stephen Schimpff, chief executive of the UM Medical Center, said the institution intends to move ahead with its anti-cancer plans and will retain specialists who have been recruited and hired for the programs.
"We're convinced this is temporary, that the issue is going to get resolved and we're going to move forward," Schimpff said.
Dr. Edward D. Miller, dean of the Hopkins school of medicine, expressed hope in a statement that "the problem can be resolved quickly so that progress on these important projects can proceed."