O’Malley to seek $80 million in budget cuts in response to lowered revenue projections

Maryland Gov. Martin O’Malley (D) plans to ask a panel Wednesday to cut close to $80 million from a state budget the legislature approved just three months ago, an acknowledgment that tax revenues are not likely to be as robust as projected, aides said.

The cuts amount to about 0.5 percent of the planned $16.1 billion in general-fund spending in the current fiscal year, which began Tuesday. Aides said O’Malley is proposing to eliminate 61 vacant positions across state government but that no layoffs are in the works.

Details of the cuts will be revealed Wednesday morning. The amount pales in comparison to a series of midyear budget reductions O’Malley made between 2007 and 2009 as the state grappled with the effects of the recession.

Still, the move is somewhat unusual, coming just days into the new fiscal year and so soon after the General Assembly completed work on what was advertised as a balanced budget. Aides said O’Malley decided to take action now because it is harder to cut as the budget year progresses.

“We’re trying to take a proactive, conservative approach to planned spending,” said O’Malley spokeswoman Nina Smith.

Aides said Maryland is not in a unique position. Many other states are having to trim budgets, in part because of continuing effects of the federal sequester, they said.

O’Malley’s proposal will go to the Board of Public Works, a three-member panel on which he sits along with the state treasurer and comptroller. The board is authorized to make cuts to the budget when the legislature is not in session and did so on seven occasions between 2007 and 2009. Aides said they don’t expect resistance from other board members to the new round of reductions.

In addition to $77 million in budget cuts, O’Malley also is contemplating $7 million in other budget actions that don’t require board approval, aides said. Those cost-saving measures include holding back planned spending and transfers among other funds.

Of the $77 million in reductions, about $56 million will come from the operating budgets of state agencies, budget officials said, and another $10 million will come from public universities in Maryland. Another $10 million will come from “fund swaps.”

In the latter case, programs that operate using a combination of federal and state funds are in a position to spend more federal funds than originally projected, freeing up state dollars, budget officials said.

John Wagner has covered Maryland government and politics for The Post since 2004.
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