Budget blues

The Baltimore Sun

Forget the comparatively minor cash crunch that Robert L. Ehrlich Jr. faced as governor. Even the three-year budget debacle that began in 1991 under William Donald Schaefer has been eclipsed. Last week, it became official: The national recession is pulverizing the state budget like no other since the early 1980s, perhaps even longer.

Maryland tax revenue projections are so flat that no one is assuming a recovery in 2009 or even early 2010. In the near term, it means Gov. Martin O'Malley is going to have to trim another $400 million from a budget that was relatively lean and getting thinner all the time. Things look much worse for next year, with a nearly $1 billion projected deficit.

Mr. O'Malley has already chosen to furlough state employees - lost wages are better than lost jobs - and that should save $34 million.

But now he's going to have to start cannibalizing: dipping into programs with fund balances such as the pending medevac helicopter purchase, or perhaps the Intercounty Connector. Some of that money, but not all, can be replaced by postponing less-vital capital purchases (Maryland's version of legislative pork) and redirecting the money for eligible projects.

And that's the easy stuff. Little in government services can be spared. Mr. O'Malley's promise to leave alone Program Open Space is unlikely to hold up. How can it? At some point, it's going to seem ridiculous to invest in land conservation when vital education and health care programs are at risk.

Make no mistake, level funding for schools is probably the best Mr. O'Malley is going to provide for Maryland students. Education represents too large a portion of the state budget for it to be untouched. Same with aid to local government, a move that's likely going to a have ripple effect on city and county spending plans.

The governor and state legislators are keeping their fingers crossed that President-elect Barack Obama and the next Congress will bail them out. Spending billions of dollars on roads and schools may create jobs but it won't materialize into ready cash - although some direct aid to states appears possible.

Even tapping the state's Rainy Day Fund, the $800 million set aside for emergencies, seems unwise - at least in the near term. With the downturn expected to continue, the governor's too likely to need that money over the next two years.

Mr. O'Malley may have addressed the state's chronic budget problem (chiefly the failure to finance the $1.6 billion Thornton education spending plan years ago), but now he's got a much more acute one. Is it any consolation that most of the nation's governors have it worse? Probably not. In Annapolis, there's more than enough budget misery to go around.

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