Lawmakers get 1st detailed look at budget

Gov. Robert L. Ehrlich Jr.'s proposed $23.8 billion state operating budget rests on a quarter-billion dollars in shaky assumptions, including underestimated health costs and corporate tax payments that may not materialize, General Assembly budget analysts said yesterday.

To protect against those problems, lawmakers should consider cutting as much as $250 million from programs and applying the savings to a reserve account, said Warren Deschenaux, chief budget analyst with the nonpartisan state Department of Legislative Services.


"Not doing that means the governor is going to the Board of Public Works," when lawmakers are in recess and deciding unilaterally where to cut, Deschenaux said.

In an annual Assembly tradition yesterday, legislative staffers gave Senate and House budget committees their first detailed look at the governor's budget. It was a largely unflattering analysis showing that Ehrlich is relying heavily on one-time solutions to fill a gap between revenues and expenditures of between $700 million and $1 billion, depending on whose estimates are used.


The stopgap techniques amount to 70 percent of the solution, leaving projected deficits well into the future, Deschenaux said.

"I think it's smoke and mirrors," said Democratic Sen. Ulysses Currie, chairman of the Senate Budget and Taxation Committee. "It's robbing Peter to pay Paul."

By using lower enrollment projections, the Ehrlich administration has underestimated the state cost of mental health services by $50 million and of Medicaid by $35 million, analysts said. The administration should restore $50 million that local school districts were expecting to receive based on a formula that compensates for higher costs in some districts, they said.

About $40 million in back taxes owed by corporations might not be collected, the analysts said, because the companies are balking at the charges and have rebuffed offers to come forward voluntarily.

Other areas where costs were understated include foster care, information technology and aid to local jails, the analysts said.

Administration officials and Republican lawmakers said the differences resulted from honest disputes over assumptions, and that true costs of programs were difficult to ascertain.

"There are some areas where [Deschenaux] just has gloomier cost and caseload estimates than we do," said Neil L. Bergsman, the administration's budget director. "There are areas where we have faith in our managers to produce savings."

Nelson J. Sabatini, secretary of the state Department of Health and Mental Hygiene, said the Medicaid budget was so vast - a combined $4 billion in federal and state funds - that "$35 million is not a difference."


Sen. David R. Brinkley, a Frederick County Republican, said he thought the governor's budget was a good first piece of the state's fiscal solution.

"It's a step in the right direction that is going to take several years to fix," he said.