New Year Brings Hangover From Old

Lawmakers Face $1.9 Billion Gap In State Budget

The Maryland General Assembly prepares to convene this month in a somber mood, ready to tackle deep spending cuts as the tax revenue that funds state services has plummeted in the sagging economy.

The state's 47 senators and 141 delegates will begin their annual 90-day session Jan. 14 facing a significant potential budget shortfall. Leaders say they expect few state priorities to be spared and the shortage of money to dominate legislative discussions.

The size of a projected shortfall has been rapidly expanding, as the economy quickly deteriorates. Last month, a state panel doubled its estimate of the shortfall from a figure calculated three months earlier. Experts now say they think the state must plug a $1.9 billion gap in a $14 billion budget.

The state is short on revenue even though lawmakers agreed to raise taxes at a special session slightly more than a year ago, increases that were designed to raise $1.4 billion each year and close a structural shortfall in the state's budget. Because they agreed to the significant tax increases so recently, there is little appetite for raising them again this year to generate new revenue.

Gov. Martin O'Malley (D), who has not introduced his budget proposal for the next fiscal year, has taken steps to save money. Last month, he announced that 67,000 state employees would have to take up to five days of unpaid leave this year to help close the shortfall.

He has also proposed cutting $38 million in aid set aside for school systems with a higher cost of living, such as Montgomery and Prince George's counties.

The governor has not ruled out laying off state workers and has said Marylanders should brace for cuts. He is expected to release a plan for $400 million in midyear cuts soon, followed by an austere budget for the next fiscal year. O'Malley has acknowledged that an expansion of subsidized health insurance and a new fund to help the Chesapeake Bay cleanup might be at risk.

"We have to look at a lot of things we would otherwise not consider," he said last month.

Lawmakers are expected to consider whether to cut back on state aid to Maryland's counties, which makes up 40 percent of the state's budget. Local governments, which rely on the funding to balance their budgets, would probably fight such a move, particularly a proposal to shift the cost of teacher pensions to local government. O'Malley has indicated that he is opposed to the move, which could save the state $600 million, but Senate President Thomas V. Mike Miller Jr. (D-Calvert) has said the legislature should discuss pushing at least a portion of the costs to localities.

Although the financial problems will probably dominate the session, lawmakers will also consider a number of regulatory issues.

O'Malley has indicated that he will ask them to pass a bill that would require the surrender of firearms by anyone subject to a final protective order, an attempt to provide new safeguards for victims of domestic violence. Gun rights advocates have fought similar measures in the past.

Legislators are also likely to spend time discussing the future of the state police helicopter fleet. Maryland is the only state in the country that operates a public air ambulance service, using the state police's 11 helicopters to fly patients to hospitals, as well as perform surveillance and other traditional police functions.