Counties Envision Cutbacks in State Funding

By John Wagner
Washington Post Staff Writer
Sunday, August 12, 2007

Hundreds of county officials from across Maryland are convening this week in Ocean City for an annual conference typically remembered as much for its golf tournament, crab feast and late-night outings to watering holes as for its panel discussions.

But belying this year's merriment is a growing concern that county governments could take it on the chin as state lawmakers confront a $1.5 billion shortfall in the budget they must balance next year.

State aid to local governments has swelled in recent years, now accounting for about 40 percent of Maryland's $15 billion general fund budget. The growth, from less than 32 percent six years ago, has been fueled largely by record state investments in public education. The state also helps counties pay for law enforcement, health programs and other services.

That aid has become an inviting target for lawmakers as they consider increases in the state sales and income taxes, among others, and weigh potentially painful cuts to state services.

Lawmakers are also mindful that in recent years many county employees have enjoyed raises more generous than their state-level counterparts' and that many jurisdictions are sitting on far healthier reserve funds than the state's.

"The counties have received a huge boost in local aid . . . and they're going to have to be a part of the solution," said Del. John L. Bohanan Jr. (D-St. Mary's), a leading voice on the House Appropriations Committee. "That doesn't mean we whack them and do nothing else. But everyone's going to have to step up."

David Bliden, executive director of the Maryland Association of Counties, which is hosting the conference, has started cautioning state legislators against a "shift-and-shaft strategy." State aid is the largest source of revenue for most Maryland counties, and cutting it would leave many jurisdictions with little choice but to raise property taxes, he said.

"If we're simply going to pass the problem on to local communities, that doesn't solve the problem," said Montgomery County Executive Isiah Leggett (D), who said his jurisdiction is facing a $270 million shortfall of its own next year, which could prompt a tax increase even without state cuts.

County leaders have found an ally in Gov. Martin O'Malley (D), who during his seven-year tenure as mayor of Baltimore was an outspoken opponent of proposals to cut state aid to his city and Maryland's 23 counties.

As governor, O'Malley has pledged to do all he can to prevent a "shell game" solution to the state's budget problem. But O'Malley, who is scheduled to address county officials next Saturday in Ocean City, has also acknowledged that he is not the only player in the budget process.

Del. Murray D. Levy (D-Charles), a former president of his county's Board of Commissioners, said he is sympathetic to county arguments. But Levy, who now sits on the House appropriations panel, said: "My advice to the county is to get ready. I think it is unlikely they will escape cuts. That's the way a lot of people in the legislature feel."

At O'Malley's suggestion, Bliden's organization has been gathering worst-case scenarios from county leaders to illustrate the impact that major cuts in state aid could have. Counties were asked how they might meet reduction targets that averaged 10 percent but varied from county to county in a "doomsday" budget scenario recently generated by state legislative analysts.

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