State budget cuts in works

The Baltimore Sun

Gov. Martin O'Malley will propose $213 million in spending cuts next week, including many designed to reduce administrative costs or make government more efficient, but also some that would affect programs in health, education and law enforcement.

According to a copy of the proposal obtained by The Sun, the cuts hit nearly every part of state government.

Positions would be held vacant in the state police; Medicaid reimbursements for doctors would be cut by $4.1 million; the university system would face $12 million in cuts; signing bonuses for high-quality teachers would be cut by $850,000; 12 law clerks would be cut from the Office of the Public Defender; and the state's budget for attracting tourists would be cut by nearly $700,000.

In all, about 150 state jobs would be eliminated, though many of those positions are now vacant.

The governor presented his plans to Comptroller Peter Franchot and Treasurer Nancy K. Kopp, who serve with him on the Board of Public Works, in a 90-minute, closed-door meeting yesterday. His office released no details of the proposal afterward, which he plans to make public Tuesday.

O'Malley spokesman Rick Abbruzzese said the governor told his Cabinet secretaries to try to flatten their bureaucracies and find as many cost savings as possible without drastically affecting services. The $213 million in cuts represents a "first step" in closing the state's expected $1.5 billion budget shortfall, Abbruzzese said.

"While these are the first cuts, they certainly may not be the last as we work with the General Assembly to balance the budget and make critical investments in Maryland's future," Abbruzzese said.

Even if the Board of Public Works approves all of the cuts at its meeting next week, O'Malley will be left with a projected gap of about $1.3 billion between revenues and expenditures in the fiscal year that begins July 1, 2008.

Under O'Malley's plan, about $60 million would be cut from the fiscal year that ended June 30, though $34 million of those cuts had already been identified by the administration before O'Malley charged his Cabinet secretaries in May with finding spending reductions.

The remainder of the cuts - about $153 million - come from the current fiscal year.

Franchot was noncommittal after the meeting, saying he would need time to analyze the proposal.

"We're going to digest it," he said.

But Kopp said it appeared that the 12 pages of proposed cuts were mostly moves to streamline government.

"I think in general he is putting together the sort of efficiencies he said he wanted to," Kopp said. "I don't look for a big, dramatic change in policy, a dramatic hatcheting of good programs."

For example, O'Malley proposed reducing by $2 million expenditures at the Department of Education for conferences, vehicles, supplies and contractual employees. Temporary cash assistance for needy families would be cut by $3 million and foster care by $2 million to reflect declining caseloads.

In some programs, state funds would be replaced by federal funds. In others, administration officials would take advantage of unspent funds from previous years to make reductions. For example, the governor proposed cutting $5.9 million in leftover college scholarship aid that had not been spent in previous years. Other cuts amounted to delays in the expansion of programs or, as in the case of the university system, reductions to the budget increases previously approved for this year.

By far, the largest cuts - $47.5 million - are proposed for the Department of Health and Mental Hygiene. In remarks about the budget-cutting process, O'Malley has complimented Health Secretary John M. Colmers on the vigor with which he approached the task.

The governor had said he would apply less pressure to agencies that have historically been under-funded, such as the Department of Public Safety and Correctional Services and the Department of Juvenile Services.

Corrections is down for $10 million in cuts, $8 million of which come from savings resulting from the closure last winter of the Maryland House of Correction. The rest would result from renegotiating what the state charges for federal prisoners housed in state institutions.

Juvenile services would be cut by $970,000, an amount that comes from a 10 percent reduction in the budget for contractual employees to reflect current usage and from reductions in vehicle operations, travel and other administrative expenses.

The Department of Education, which receives the largest share of the budget and which has seen record increases in the last several years because of enactment of a landmark education funding formula in 2002, faces $6.3 million in cuts. Most of that reflects a reduction in administrative costs and the elimination of vacant positions.

By law, O'Malley must submit a balanced budget for the next fiscal year in January, and the Democrat-controlled General Assembly must approve such a plan by the next April.

Last week, legislative analysts presented a "doomsday" plan for how the budget could be balanced by cuts alone. But O'Malley has said he hopes to develop a consensus with the legislature for a budget-balancing plan that combines cuts, tax increases and possibly revenue from legalizing slot machine gambling at race courses.

He is facing pressure from Republicans to avoid tax increases and instead make steeper cuts.

Maryland Republican Party Chairman Jim Pelura issued a statement yesterday saying that Marylanders can't handle higher taxes on top of increases in electricity rates, gas prices, and costs for goods and services.

"Martin O'Malley and the Democrat leadership can balance the budget without raising taxes on citizens that are already overtaxed," Pelura said in the statement. "It is shameful that the Democrats continue to look at Maryland families as ATM machines with unlimited funds."

But the governor is also likely to face resistance from those who depend on government services. Eric Gally, a lobbyist for a number of nonprofit groups including Advocates for Children and Youth, said the state budget has been squeezed so much in recent years that any cuts could hurt those who are most vulnerable.

He said yesterday that O'Malley's proposed cuts show the governor is sensitive to that risk.

andy.green@baltsun.com

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