Despite Gov. Martin O'Malley's pledge to spare local governments, legislative leaders say cuts in aid to counties and cities will likely have to be part of the state's effort to resolve its $1.5 billion budget shortfall.
The governor, a former mayor, managed to avoid such cuts in the $213 million worth of proposed spending reductions he publicly unveiled yesterday, and he reiterated his desire to preserve the money the state passes on to local governments for education, public safety and other services.
But the leaders in the state Senate and House of Delegates indicated yesterday that they won't be so quick to set aside those billions from scrutiny.
"The governor tweaked certain items that could stand adjusting, but we're going to have to ask the counties to step up and do their share now," said Senate President Thomas V. Mike Miller. "They're 40 percent of the budget."
House Speaker Michael E. Busch, who, like Miller, got his first look at O'Malley's proposed cuts Monday, had a similar reaction.
"The governor has taken the opportunity to look for efficiencies and agencies he thinks he can cut without hurting basic services, and he's taken a good first step," said Busch, whose day job is in the Anne Arundel County Parks and Recreation Department. "Obviously, tougher decisions are going to be made in the fall. We need to decide what portion of the problem local governments are going to shoulder."
Local government leaders tend to get nervous whenever the state finds itself in tough fiscal times. Historically, when legislators and governors have been faced with a choice between cutting popular services and raising taxes, they have often opted instead to reduce the amount of money they send to local governments, in effect foisting those same choices on county and town leaders, who have no one to pass the buck to.
O'Malley has called that tactic a "shell game" and said it is one he hopes to avoid. But that might not be possible, he acknowledged yesterday.
"We wanted to increase administrative efficiency, control growth in non-core programs, protect vulnerable populations and preserve aid to local governments," O'Malley said in releasing details of his proposals, which are due to be voted on today by the Board of Public Works. "Subsequent rounds of cuts will, by necessity, involve violating those principles."
Jan H. Gardner, president of the Frederick County commissioners and president of the Maryland Association of Counties, said that if the state does look to balance its budget by cutting aid to local governments, it will almost certainly lead to higher property taxes.
A "doomsday" budget proposal by legislative analysts to show how the budget could be balanced by cuts alone included hundreds of millions in reductions in state aid, the largest of which would shift part of the cost of teacher retirement plans to the counties. That change by itself would, on average, require counties to raise their property tax rates by 11 cents per $100 in assessed value, Gardner said.
"About 75 percent of a local government's budget is education and public safety, and about 80 percent of those budgets are employees, so there's a limited number of places to go" for cuts, Gardner said. "We'd either have to reduce those services or go to the taxpayers because of policy decisions we did not make."
The governor identified a series of further steps to prevent that from happening. He said he will use the StateStat process to find more savings; ask Comptroller Peter Franchot to continue his efforts to collect unpaid taxes; restrain spending growth; and pursue reforms to the tax code to "make it modern, inclusive and fair."
Though O'Malley said more cuts are possible, he reiterated his opposition to solving the budget gap through cuts alone, an approach that would slash millions from public safety and public education.
"Some people will feel the pain of these cuts more so than other people in the state, but the real pain will come if we are forced to balance this entire budget with cuts," O'Malley said.
However, he put off questions about tax increases or possible revenues from legalizing slot machine gambling, saying he will begin focusing on those questions after today's vote.
andy.green@baltsun.com
For a complete list of the proposed cuts, go to www.baltimoresun.com/budget