State Hacks $350 Million from Budget


ANNAPOLIS (Oct. 16, 2008)—State leaders dropped the budget guillotine Wednesday, slicing nearly $350 million from hospitals, jails and a slew of other programs - even school chess.

The Board of Public Works, at a packed hearing near the State House, unanimously approved the cuts, which affect more than 180 agencies, offices and programs. The board's vote also wiped out 833 positions, most of which were vacant.

Board members described the cuts as painful but necessary, given the state's financial woes. Among other problems, the country's struggling economy has slashed Maryland's income and sales tax receipts, leaving the state with less money for salaries and operations.

The cuts apply to the current fiscal year's budget.

"There are certain services for the public that simply cannot be continued because we don't have the resources for it," said Treasurer Nancy Kopp, who sits on the three-member board with Gov. Martin O'Malley and Comptroller Peter Franchot.

Some agencies were hit harder than others.

The Department of Health and Mental Hygiene, for example, had $127 million in cuts that will affect services for the disabled and veterans, among others.

"I'm under no illusion that these are not significant," said Health and Mental Hygiene Secretary John Colmers. "They're likely not to be the last."

The Maryland Zoo in Baltimore had nearly $190,000 sucked from its budget. As a result, the zoo may have a temporary hiring freeze and be forced to close on Mondays, among other options being considered, said president and CEO Donald T. Hutchinson.

Elsewhere in Maryland, cost-cutting measures include reducing hours of operation and limiting the use of contracted labor. Even school chess programs lost $25,500.

"Naturally, everyone would like to have more money in their budget, but we're going to do our part" to cut costs, said Roger Hill, chief operating officer of Historic St. Mary's City, a state-owned museum in southern Maryland. The museum had $88,000 cut from its budget.

The board's vote comes amid a string of bad economic news for the state. On Tuesday, officials slashed Maryland's expected revenue stream by nearly $600 million, and recent reports have outlined the rise in unemployment claims, welfare receipts and foreclosures.

Next month, officials will release updated revenue estimates, and many predict another write-down.

"We're in a better position to fight the economic downturn in this national economy than many other states," O'Malley said. "But we are not immune."

Press Release from Governor O’Malley on the budget cuts

ANNAPOLIS, Md. (October 15, 2008) – Governor O’Malley and the Board of Public Works today approved over $345 million in budget reductions to balance the FY09 budget, including over $297 million in general funds, and over $50 million in special and federal funds. The Board also approved the elimination of 830 state positions, bringing the total number of positions eliminated under the O’Malley-Brown Administration to more the 1,500.

Following the national economic downturn and the Board of Revenue Estimates projections last month projecting a revenue shortfall of $432 million for FY09, Governor O’Malley directed the Department of Budget and Management to cut spending in all state agencies up to 5%.

“The cuts we are making today are not easy,” said Governor O’Malley. “Eighty-percent of Maryland’s State budget is dedicated to public safety, public education and public health. Yet, as our national economy has faltered, states across our country, like families across our nation, are now faced with the hard decisions necessary to balance our state budget in very difficult economic times. Over the last few weeks, we have asked our State agencies to identify cuts of up to five percent in their budgets, and we will continue to work with them to reduce spending and find efficiencies as we work to address these budget challenges brought about by our national economy.”

With today’s action, in the first half of the O’Malley-Brown Administration, spending has been reduced by more than $2.2 billion and more than 1,500 state positions eliminated. Budget growth has been limited to less than four percent annually for both FY08 and FY09 budgets; each falling below the General Assembly’s spending affordability guidelines.

For a complete list of budget reductions by State agency, visit


FY 2009 Budget Reductions Approved by Board of Public Works 10-15-08 (PDF)

Capital News Service and Jessica Groover contributed to this report.

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