By John Wagner
Washington Post Staff Writer
Thursday, March 20, 2008

The Maryland House of Delegates yesterday rejected a series of Republican-sponsored budget amendments to curb spending on transportation, education and other programs as the state prepares for a new fiscal year amid significant economic uncertainty.

The most sweeping proposal, by House Minority Leader Anthony J. O'Donnell (R-Calvert), sought to cut $560 million from a $31.2 billion spending plan expected to be approved by the Democrat-led House today.

"A lot of these programs are good ideas, but we can't afford it right now," he said during preliminary floor debate. "We have not done enough to rein in the growth of spending in this state."

His proposed amendment, which failed 100 to 38, included reductions of $165 million for transportation and almost $76 million for education. The targeted education funding is intended to compensate jurisdictions, including Montgomery and Prince George's counties, where the cost of providing education is more expensive than elsewhere in the state.

O'Donnell also proposed deleting $15 million for stem cell research and the remaining $25 million allocated for a new fund to clean up the Chesapeake Bay. Lawmakers have agreed to cut half of the $50 million allocation that Gov. Martin O'Malley (D) proposed for the bay fund in the fiscal year that starts in July.

O'Donnell said he was seeking to reduce proposed spending growth rather than make outright cuts to the budget. Under his amendment, he said, the overall budget would grow by 2.5 percent next year.

Del. Norman H. Conway (D-Wicomico), chairman of the House Appropriations Committee, said that the budget sent to the floor by his panel had absorbed hundreds of millions in cuts. He also said that O'Donnell's proposal would affect programs that are "key to Maryland's quality of life."

Conway said the budget includes almost $1 billion in the state's rainy-day account and other unallocated funds that could be used if tax collections continue to fall short of expectations because of the sluggish economy.

A separate amendment that was voted down 95 to 42 would have pared spending on transportation, education and other programs by nearly $216 million. Del. Jeannie Haddaway (R-Talbot) said the reduction would create room in the budget for lawmakers to repeal a tax on computer services that was adopted during November's special session.

The repeal proposal has gained momentum in the closing weeks of this session, but lawmakers have yet to reach a consensus on how to compensate for the more than $200 million in annual revenue that the tax is expected to raise after it takes effect in July. O'Malley and some lawmakers have suggested raising income tax rates on individuals earning more than $750,000.

"This is not the only opportunity we will have," said House Majority Leader Kumar P. Barve (D-Montgomery), who opposed Haddaway's amendment. "Too much of this comes out of education. . . . This is not the way to do it."

Haddaway's amendment included the same education cut of almost $76 million that was proposed by O'Donnell.

Another amendment that sought only to delete $15 million for stem cell research grants was also defeated by the House, 96 to 39. Del. Tony McConkey (R-Anne Arundel) argued that the Maryland Technology Development Corp., which administers the grants, has been slow to distribute two previous rounds of funding provided by the legislature.

Del. John L. Bohanan Jr. (D-St. Mary's) said it was important that Maryland maintain its commitment to the research, particularly given federal funding restraints.

"This is an important program that we've just begun," Bohanan said.

The budget adopted by the Senate last week included $5 million for the research next year. That is one of several significant differences the two chambers will need to resolve before sending the budget to O'Malley, who proposed spending $23 million on stem cell research next year.

The House also rejected two amendments to the budget yesterday that sought to reduce the pay of officials whom O'Malley brought in at significantly higher salaries than their predecessors in the administration of former governor Robert L. Ehrlich Jr. (R).

O'Malley, for example, agreed to pay $185,000 a year to Steven B. Larsen, who was nominated in February 2007 to be chairman of the Public Service Commission. His predecessor made $117,000. A GOP amendment would have reduced the pay of Larsen and other members of the commission, which regulates utilities. A broader amendment sought to limit the pay for 53 positions. Both measures failed by votes that broke largely along party lines.

Del. Galen R. Claggett (D-Frederick) defended the higher salaries, saying O'Malley had recruited people from the private sector in some cases to oversee dysfunctional agencies. Cutting their pay now, Claggett said, would be "penny-wise and pound-foolish."

Claggett said some officials in Ehrlich's administration were paid more than their counterparts in the O'Malley administration, citing the governor's chief of staff as an example.