Gov. Martin O'Malley is planning to lay off hundreds of state workers and is asking for other labor concessions to help close a nearly $2 billion budget gap projected for the fiscal year that begins in July.
That warning came hours before the Maryland General Assembly convened yesterday with ceremonial speeches pledging "One Maryland" unity.
But signs of discord soon surfaced between the Democratic governor and lawmakers, who must ratify the budget, revealing tensions aggravated by economic woes that are sure to grow as the 90-day session unfolds.
When he submits his budget next week, O'Malley will ask the legislature to approve between 500 and 1,000 layoffs, aides said, in an executive branch work force of more than 70,000.
"State employees can only do so much," Miller said. "Most of the counties haven't had any furloughs. They haven't had any layoffs, and they've gotten pay increases. ... Everybody's got to pay their fair share ... and that means the counties are going to have to step up just like the state."
The O'Malley administration has also been negotiating with labor unions representing tens of thousands of state workers, asking workers to pay more for their health care benefits. But the largest union, whose members have already been furloughed, is balking at the requests.
As lawmakers and lobbyists swarmed back to Annapolis, many eyes were fixed on Washington and hope for a federal bailout for the state.
Inside the ornate House and Senate chambers, politicians pledged their commitment to public service but left the real work to the days ahead. In addition to the budget, the talk was about looming legislative battles on police spying, urban sprawl, climate change and the death penalty.
"We have never been so needed as we are today," O'Malley told a packed House chamber. "So we're going to step up."
By law, Maryland must maintain a balanced budget. O'Malley has already had to hack hundreds of millions from his current $14 billion operating budget to compensate for plummeting tax receipts amid a global economic meltdown.
During a radio interview recorded yesterday morning, he held out hope that "very serious layoffs" might be lessened if President-elect Barack Obama persuades Congress to send hundreds of millions in stimulus money to Maryland through a bailout program. Federal money is a "huge variable" and could improve the bleak budget outlook, he said.
Most state agencies will see neither increases nor reductions to their budgets, O'Malley said, though he plans to ask for a $25 million to $30 million increase for higher education that would allow Maryland's public universities to keep tuitions frozen for a fourth consecutive year.
Miller, however, said he did not believe a tuition freeze could be sustained, another potential area of conflict between the governor and legislature.
Miller and House Speaker Michael E. Busch, both Democrats, said they would consider tapping a $366 million reserve fund in the comptroller's budget to plug part of the $1.9 billion projected revenue gap. O'Malley said such a move could spare local governments from some, but not all, cuts in state funding.
Republicans, far outnumbered by Democrats in both chambers, said they hope to be included in budget discussions, and they vowed vigilance against any tax increases.
The American Federation of State, County and Municipal Employees, the largest union for state employees, has been in negotiations with O'Malley's administration in recent days. Maryland director Patrick Moran said union members oppose layoffs and shifting health care costs and he is confident the two sides will achieve a "middle ground" settlement.
"Our union is fighting tooth and nail to maintain health care benefits and to make sure we do not have budgets balanced on the backs of state employees who provide essential services every day to the people of Maryland," Moran said.
Miller predicted an "extremely contentious" legislative debate over an O'Malley-backed bill to strengthen state efforts at curbing urban sprawl. It could be opposed by local governments worried about preserving their land-use authority, but Miller said that, ultimately, "we're going to pass some meaningful legislation."
Busch predicted that another of O'Malley's priorities - a bill limiting State Police authority to spy on political activists - would become law. The governor's legislation will address a Maryland State Police surveillance program that included troopers infiltrating peaceful protest groups and wrongly labeling dozens of activists as terrorists in a police database.
Col. Terrence B. Sheridan, the State Police superintendent, has called the operation, which began in 2005 under a different superintendent, "disconcerting" and said his agency has abandoned the practice.
State Sen. Jamie Raskin and Del. Sheila E. Hixson, both Montgomery County Democrats, plan to jointly sponsor anti-spying bills, said Del. Samuel I. Rosenberg, a Baltimore Democrat. Rosenberg, who plans to co-sponsor the House measure, said the bill likely will "be more extensive" than the governor's, in that it asks for tight controls on when information gathered by police can be forwarded to federal databases.
The opening day came with its usual pomp. As expected, Busch was re-elected unanimously by the House of Delegates to his leadership post. Miller, among the longest-serving legislative presiding officers in the nation, was chosen president by a vote of 44-3, with three Republicans voting against.
Noticeably absent was recently indicted Baltimore Mayor Sheila Dixon, who did not join the county executives in opening day festivities.
Dixon spokesman Ian Brennan said the mayor - who faces felony theft and perjury charges - had planned to travel to Annapolis but changed her schedule. At a City Hall news conference, Dixon said last week's indictment has had no impact on her plans to push city initiatives in Annapolis, listing tougher gun control legislation as a priority.
Baltimore Sun reporters Julie Bykowicz and Annie Linskey contributed to this article.
THE DAY IN ANNAPOLIS
* The 426th General Assembly session convenes; House Speaker Michael E. Busch and Senate President Thomas V. Mike Miller, both Democrats, are overwhelmingly re-elected as leaders of their respective chambers.
* Gov. Martin O'Malley gives more details of his budget-cutting plan, including layoffs of state workers.
* Miller argues that state workers should be spared further cuts and that local governments must shoulder more of the burden of correcting a $1.9 billion budget gap.