U.S. aid falling short in Md.

The Baltimore Sun

Even a $3.7 billion federal lifesaver isn't enough to solve all of Maryland's budget quandaries.

While the state is now flush with federal dollars for education, Medicaid and infrastructure projects, other state functions, among them the prison system, mental health programs and juvenile justice, are facing significant cutbacks. In some cases, lawmakers and advocates have questioned how agencies will be able to function within constrained budgets.

Meanwhile, the economy continues to deteriorate and state officials are bracing for more bad news later this month when the latest estimates of tax revenues are due. Analysts have warned that annual collections have fallen as much as $500 million below expectations for the current budget year and next.

"Everyone thinks the stimulus money is going to solve every problem in the world," said state Budget Secretary T. Eloise Foster, "and I'm trying to manage expectations."

Gov. Martin O'Malley plans to submit a supplemental budget to the General Assembly this week, incorporating money from the federal economic stimulus package enacted last month, as a number of pressures come to bear in Annapolis.

Several state agencies have submitted requests for additional funding, competing for a share of $50 million, a relatively small pot of money that has not been dedicated to other programs as part of the stimulus. Hundreds of state employees plan to gather outside the State House tonight to protest budget cuts that stretch their workloads and strain services.

States across the country are faced with budget shortfalls as demand for social services has increased. O'Malley, a Democrat, had to grapple with a $2 billion shortfall in the state's $14 billion operating budget when he crafted his original spending plan earlier this year, and the General Assembly will put its mark on an amended budget in the coming weeks.

One agency whose budget is likely to receive a lot of attention is the Department of Public Safety and Correctional Services, which would receive a slight increase under O'Malley's budget but remains "badly underfunded," said Sen. Ulysses Currie, a Prince George's County Democrat and chairman of the Budget and Taxation Committee. The agency would need an added $77 million to operate at full staffing, according to one analysis.

"I am concerned about control in the prisons," said Del. Galen R. Clagett, a Frederick County Democrat who chairs a House panel that oversees spending in the department. "It's scary."

The prison system has come under scrutiny for understaffing and overcrowding in recent years, and the American Federation of State, County and Municipal Employees, a union representing correctional officers, has raised concerns about what appears to be an uptick in inmate-on-staff violence. About 190 incidents were recorded in the first six months of this fiscal year, which would represent an annualized increase of 9 percent, the union said.

G. Lawrence Franklin, a deputy secretary in the department, said the agency has sought more money through the supplemental budget process but emphasized that the department would have officers work overtime and would take other measures to ensure security. He said that retention of officers has improved in recent years. Three years ago, the department hired 1,100 officers but 918 left. So far this budget year, 845 officers have been hired and only 255 have left, Franklin said.

"We're not going to jeopardize the security of our operations," he said.

The Department of Juvenile Services is underfunded as well, youth advocates contend. As one legislative analyst put it: "It is difficult to imagine the department will be able to live within its fiscal 2010 budget." Agency Secretary Donald W. DeVore acknowledged that the budget is "challenging" and that more staff is needed.

The Department of Health and Mental Hygiene also is seeking added funding. Under the governor's proposed budget, nursing homes, physicians and mental-health care providers would be squeezed because rates paid by the state for services would either remain frozen or increase at a rate below inflation. In addition, the department plans to move patients out of state mental hospitals and into private homes and other facilities.

"These are ways in which we are trying to economize," said Health Secretary John M. Colmers. "There are a lot of balancing acts that have to go on here."

Another agency seeking added funding is the Office of the Public Defender. The agency that defends indigent criminals had begun to hire more attorneys several years ago after a study showed that it was understaffed, but that was soon reversed, spokeswoman Kimberlee Schultz said. This year, the proposed budget calls for the agency to cut nearly 50 vacant positions, and some worry that the remaining attorneys would not be able to handle all of the cases.

"People are very concerned," Schultz said. "There are a lot of people providing services to the people of Maryland who are worried."

With the federal stimulus money, O'Malley has abandoned plans to lay off 700 state employees. But labor officials say employees at many state agencies are overworked.

"We avoided these layoffs, but you're still understaffed," said Patrick Moran, AFSCME's Maryland director.

Unions also have taken issue with O'Malley's cost-cutting proposal to eliminate hundreds of vacant positions. That amounts to a budget cut, Moran said, because agencies had been using the funds set aside to fill those positions to pay for operations.

Further spending reductions are likely as lawmakers make even more severe budget cuts to free up a bigger cushion in case the economy continues to worsen. O'Malley's budget, accounting for stimulus funding, envisions a leftover balance of $63 million. Del. Norman H. Conway, an Eastern Shore Democrat and chairman of the Appropriations Committee, said the state needs a cushion of up to $400 million.

"We just don't have enough money," Conway said.

Baltimore Sun reporter Julie Bykowicz contributed to this article.

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