Gov. Martin O'Malley Anticipates Painful Budget Cuts


ANNAPOLIS (Oct. 14, 2008)—Gov. Martin O'Malley said he regrets some of the budget cuts that will be voted on Wednesday, but told Maryland school superintendents that the cuts do not reflect a "lack of belief" in education programs.

O'Malley's comments on Tuesday came hours before state officials, at a packed budget hearing, slashed nearly $600 million from Maryland's expected revenue stream in the current fiscal year. The write-down was almost 40 percent higher than last month, when officials predicted a $432 million drop in revenue.

In his appearance before the Public School Superintendents Association of Maryland, O'Malley blamed the nation's economic downturn for the projected $420 million in budget cuts needed this fiscal year. The Board of Public Works, on which O'Malley sits, meets Wednesday to consider proposed cuts.

"It's going to cause some pain and discomfort all around," O'Malley said. "It's not because we want to do any of these things, but we must."

O'Malley also promoted the upcoming slots referendum, noting the additional revenue could help balance future state budgets. The referendum would authorize up to 15,000 slot machines at five locations around the state.

"There is an opportunity to close that loophole that currently allows $500 [million] to $600 million to leave our state to go to slots in Pennsylvania, Delaware and West Virginia," O'Malley said. "And instead keep those dollars here and make sure that those dollars make it to the classroom."

Slots opponent and fellow Board of Public Works member, Comptroller Peter Franchot, said in a press conference Tuesday that the slots proposal will not work and the state needs to find other ways to balance its budget.

"I will continue to say we're not going to tax or gamble our way out of this," Franchot said.

Regardless of the outcome of the slots referendum on Nov. 4, Franchot said that more budget cuts will be made in December and possibly later due to external economic events.

"We absolutely have to reform state spending," Franchot said.

Many of the proposed cuts would come from education, public safety and health services, which form about 80 percent of the state's budget. Franchot said that he is inclined to support the cuts.

More than 100 specific funding cuts are currently under consideration.

The Geographic Cost of Education Index, which provides more state funding for regions that have higher education costs, is one program that may receive cuts at some point. Other budget cuts could include funding for community colleges and disability assistance payments.

Although budget deficits are not unique to Maryland, a study by the Center on Budget and Policy Priorities released in September ranked Maryland's projected budget gap the 10th largest in the nation as a percentage of the total state budget.

"We're looking at some serious challenges and a national economic downturn the likes of which I certainly haven't seen in my lifetime," O'Malley said on Tuesday.

The Capital News Service and Eli Segall contributed to this report.

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