Lawmakers Face $1.9 Billion Gap In State Budget
By Rosalind S. Helderman
Washington Post Staff Writer
Thursday, January 8, 2009
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.
Police officials say the fleet is aging, however, and the legislature decided last year to replace three helicopters a year, at a cost of $120 million to $200 million. Since then, a state police helicopter crashed in Prince George's in September, killing four, an accident that prompted questions about how the fleet is run.
Some lawmakers have suggested the fleet is too big and recommended a greater reliance on privately run air ambulance services. Others have proposed leasing helicopters instead of buying them. They have also questioned whether medical work should be commingled with law enforcement and homeland security efforts, as it is now.
After years of wrenching debate over whether to legalize slot machine gambling, the issue should play a more muted role in this year's legislative session. Voters appeared to settle the debate in November, approving a constitutional amendment to allow the machines at five locations throughout the state. A commission was established to evaluate bids from companies interested in running the gambling parlors.
But the topic could return to the State House if lawmakers decide to discuss altering the percentage of winnings operators can retain and how much the state will keep for education funding. Any such proposal would probably spark new debate over whether gambling is an appropriate way for the state to fund services.
The legislature might be spared what has become an annual debate over what to do with the long-troubled Prince George's hospital system. After years of discussions that pitted state officials against county leaders over what to do with the hospital system, which is owned by the county and managed by a nonprofit company, the General Assembly passed legislation last year that established an authority to seek bidders to buy the system.
The authority is scheduled to report on progress during the session. If attractive bidders emerge, the legislature could sign off on the deal to sell the system. The state and county have agreed they would jointly pay $174 million to help a new entity stabilize the long financially ailing institution.
If no bidders emerge, however, the county and state would be relieved of legal obligations to help prop up the hospitals, including Prince George's Hospital Center in Cheverly. Hospital leaders have warned that without public cash, the system, which serves 180,000 patients a year, could close.
All discussions in Annapolis will take place as legislators wonder about the political future of a lawmaker in a key position. In May, the FBI raided the home of Sen. Ulysses Currie (D-Prince George's) and the Lanham headquarters of grocery chain Shoppers Food and Pharmacy.
Court documents have shown that Currie, chairman of the Senate Budget and Taxation Committee, worked as a consultant for Shoppers starting in 2003 and was paid more than $207,000 by the company. Interviews and documents show he intervened repeatedly with state agencies on issues of interest to the company and never revealed the relationship on his state financial disclosure forms.
Currie has not been charged with wrongdoing, and his fellow lawmakers have been publicly supportive of their long-respected colleague. But the assembly has been consumed for months with quiet conversation about whether Currie can hold on to his chairmanship and his Senate seat.
In August, Miller said he was "certain" that Currie should have disclosed his consulting tie and indicated the legislature's ethics committee would examine whether Currie had violated the General Assembly's standards. Miller said the review would not begin until after federal authorities have completed their investigation.
The FBI and U.S. Attorney's Office have declined to comment on the probe, and it is not clear when it will be concluded.
View all comments that have been posted about this article.