O'Malley poised to spend $350 million of stimulus on transportation projects

The Baltimore Sun

Gov. Martin O'Malley is expected to unveil a plan today that would quickly spend more than $350 million in federal money on Maryland transportation projects, a day after President Barack Obama signed a huge stimulus bill that will send a flood of money to the states.

In an announcement expected this morning, the Democratic governor will ask a state spending panel to approve the overhaul of a Laurel MARC station as a symbolic start to using the $3.8 billion windfall that is part of Maryland's estimated share of $787 billion in federal stimulus funds.

Even more money will go directly to residents, who are expected to receive as much as $1 billion in tax relief, and for federal spending in the state.

Over the next two years, more than $600 million in stimulus money will be available for the state's billion-dollar backlog of "system preservation" projects for roads, bridges and transit lines, said John D. Porcari, the state's transportation secretary.

During a visit to an Annapolis elementary school yesterday, O'Malley said he hoped the federal commitment would be enough to stave off hundreds of layoffs that he has proposed in his latest budget.

But he sounded less optimistic about being able to expand Medicaid access to low-income childless adults, as health advocates want.

"We have to go through the various sources of [stimulus] funds to figure out how much flexibility we have" in using the federal money to reverse cuts, O'Malley said. "At the top of my list ... is to make sure we don't contribute to our economic problems by laying off 700 state workers."

Next on his priority list is rolling back proposed trims in funding to public schools and colleges, the governor said.

The federal relief comes as Maryland grapples with new revenue numbers released yesterday that predict "no turnaround ... in sight" to a months-long decline in sales tax collections and "alarmingly weak" estimated income tax payments for the fourth quarter of 2008.In a letter to the governor and legislative leaders, Comptroller Peter Franchot said "extremely poor" fourth-quarter tax figures "point to a substantial downward revision" of operating budget revenues next month.

That could force O'Malley to trim millions of dollars more from his current spending plan because state law requires that he maintain a balanced budget. O'Malley's administration says it has reduced spending by more than $2 billion since he took office in 2007.

In January, general fund revenue collections declined 8.2 percent compared with the first month of 2008, the comptroller's office said. After adjusting for recent changes to the tax law, a similar decline was reported for January sales tax receipts, which represent disappointing December retail results.

O'Malley and Democratic leaders in Annapolis hope that the federal funds will offset revenue declines and help revive the economy, rebuilding the state's aging infrastructure in the process.

But some leaders sounded a cautionary note.

Senate President Thomas V. Mike Miller said lawmakers need to address deficits projected for future years, after the federal stimulus funds stop flowing. He has proposed legislation to shift teacher pension costs to the counties as a way to help close the gap, but he predicted yesterday that his effort would fail this year because the federal money enables his colleagues to postpone the "tough vote."

"The stimulus money is going to come and go, and we're still going to have this problem in terms of the out years when we're spending more than we're taking in," Miller said.

State officials have spent months preparing for the influx of federal funds, which Obama has said he wants to spend mostly on short-term, "shovel-ready" projects that will quickly reap economic results. For example, Porcari said, Maryland plans to use federal money to purchase 100 hybrid diesel-electric buses previously approved by the Board of Public Works.

At a scheduled meeting this morning of the board, which is made up of O'Malley, Franchot and Treasurer Nancy K. Kopp, O'Malley is to outline his "Phase One" transportation spending plans.

Projects announced will be mostly maintenance, such as resurfacing roads, and will take place "in every region of the state ... supporting approximately 10,000 jobs," said Rick Abbruzzese, an O'Malley spokesman.

Meanwhile, the anticipated federal money has set off a lobbying surge by advocates pressing for increased funding for their favored programs. Biotech companies and researchers descended on Annapolis yesterday to urge the governor to fulfill his pledge last year to double industry tax credits to $12 million. They noted that biotech executives camped out in Baltimore this past year to turn in applications for $8.5 million worth of incentives when only $6 million was available.

Health care boosters are urging the governor and the legislature to use stimulus money to fund a proposed Medicaid expansion for adults without children. But yesterday, O'Malley emphasized his desire to maintain current Medicaid programs rather than expand health care access until state leaders develop a more permanent budget and spending solution.

what the package means to you

Selected aid to Maryland and Marylanders

INDIVIDUAL ASSISTANCE

* 2.2 million Maryland workers who earn $75,000 (or $150,000 for couples) will receive $400 per person in federal income tax cuts, for a total of almost $1 billion.

* Social Security recipients will get a one-time $250 payment. Federal retirees who don't receive Social Security will get a $250 tax credit.

* Maryland schools will get about $1.1 billion for a variety of uses, including offsetting planned budget cuts, $208 million for special education and $180 million in aid to schools with large percentages of poor children.

* Up to nine months of financial assistance to continue health care benefits for unemployed workers, in the form of a tax credit covering 65 percent of the cost.

* Home weatherization grants for low- and middle-income families

* Additional student aid for higher education, raising maximum Pell grant to $5,350 in 2009

* $814 million in direct fiscal aid to state government

GRANTS AND CONSTRUCTION

* $500 million to replace the National Computer Center at the Social Security Administration in Baltimore, plus a significant portion of $500 million nationwide to reduce processing backlogs

* $1 billion for National Institutes of Health in Bethesda, including $500 million for construction at the Bethesda campus and additional money for research grants at Maryland campuses

* $400 million for highway infrastructure, including road and bridge repair

* $240 million for public transit

$360 million for National Institute of Standards and Technology in Gaithersburg (a portion might go to the Boulder, Colo., campus)

* $27 million for drinking water projects

* $15 million for school construction and repair

* Significantly increased spending for federal activities in Maryland, including NASA's Goddard Space Flight Center in Greenbelt; National Oceanic and Atmospheric Administration in Camp Springs; Census Bureau in Suitland; for environmental cleanup and for energy efficiency improvements at federal installations throughout the region, including Food and Drug Administration facilities at White Oak

* Many other projects will be funded through competitive grants and aid to state and local governments, including port security, community health center renovations and repairs, regional health-information exchanges, energy efficiency grants to local governments, rural broadband construction, rural drug enforcement assistance and hiring for local police.

SOURCES: Baltimore Sun Washington bureau, White House, Maryland congressional offices, House-Senate conference committee report on H.R. 1

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