Md. Budget Crisis: House Cuts $500M from Budget, After OK'ing Higher Taxes Over Weekend - Southern Maryland Headline News

Md. Budget Crisis: House Cuts $500M from Budget, After OK'ing Higher Taxes Over Weekend


By RICK DOCKSAI, Capital News Service

ANNAPOLIS - The House of Delegates voted mostly along party lines Tuesday to cut $500 million from next year's budget, freezing aid to local school systems and eliminating 750 vacant state jobs, among other cuts.

The Budget Reconciliation Act passed by a mostly party-line vote of 103-36, with three Republicans voting for and two Democrats voting against.

"We are going to set it up where the state of Maryland is fiscally sound," said Delegate John Bohanan Jr., D-St. Mary's, of the vote to cut the budget.

But while Democrats lauded the vote, most Republicans derided it as an empty gesture.

Gov. Martin O'Malley "can submit a budget that ignores every one of those items" when he presents his budget for fiscal 2009 in January, said Delegate Anthony O'Donnell, R-Calvert.

But House Appropriations Committee Chairman Norman Conway, D-Wicomico, said he was confident the governor would heed the legislature. The Senate last week passed its own bill, expected to save $500 million to $600 million.

Tuesday's vote follows House approval Saturday of a tax plan that is projected to raise $1.4 billion next fiscal year.

The cuts approved Tuesday in House Bill 1 include a reduction of $150 million in annual increases in Thornton spending on local school systems; the withdrawal of $77 million from a surplus in the state health insurance fund, which provides health insurance for state and municipal employees and retirees; and a savings of about $16 million by eliminating the vacant jobs. Those were combined with numerous smaller cuts to reach the projected $500 million.

"We've looked at this carefully. We've looked at where our state is and tried to act accordingly," Conway said on the House floor.

Conway said after Tuesday's vote that Maryland will still have a deficit next year, albeit much smaller than the currently projected $1.7 billion deficit. The Department of Legislative Services predicts a deficit of $200 million to $300 million in fiscal 2009 if the budget cut and all the other bills approved by the House this special session become law.

"We're not there yet, but we're close," Conway said. "We'll be in a much better position."

John Rohrer, department policy analyst, said a deficit of $300 million could easily correct itself.

"When you're talking about that small of a gap there's not necessarily a need to raise new revenue," he said.

Rohrer added that if Maryland voters legalize slot machines at referendum next year, the gambling revenues "would easily close that gap."

But O'Donnell argued that until lawmakers have a budget in front of them, it is a waste of time to suggest any cuts. He proposed an amendment that erased every budget recommendation from the bill and only told the governor to cut $500 million.

"We can't do this in a vacuum," he said. "We need to make these cuts in a budget."

O'Donnell's amendment failed 38-98.

"In the end, we're going to balance the budget as we've always balanced the budget, and I hope we continue to have a voice in that process," said House Majority Leader Kumar Barve, D-Montgomery.

Republicans introduced other amendments for further cuts, all of which the Democratic majority shot down, including Delegate Christopher Shank's proposal to eliminate 1,000 vacant government jobs instead of 750.

"We shouldn't continue, year after year, to fund phantom positions," said Shank, a Washington County Republican. "We need to hold our agencies accountable to spending."

Conway said that there are currently more than 4,500 vacant state positions, but he cautioned that the state wants to keep a number open to allow for retirements, sick leave and job transfers.

"The body assumes that not all jobs are going to be open all the time," he said.

Shank's amendment failed 38-100.

Delegate Ted Sophocleus, D-Anne Arundel, expressed optimism after hearing that O'Malley would take the lawmakers' recommended cuts seriously.

"I would hope that, after we sat through these hours and days of hearings, that the governor will take our finished product to heart. And I'm confident that he will," Sophocleus said.

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