O'Malley: No Locality Safe From Aid Cuts

Gov. Martin O'Malley told county officials last night that local governments should expect cuts in state aid as Maryland works to overcome its budget shortfall.

Speaking to the annual winter meeting of the Maryland Association of Counties in Cambridge on the Eastern Shore, O'Malley (D) said the state will face tough choices as it closes a potential $1.9 billion deficit.

"I cannot sugarcoat it," O'Malley said. "None of us is going to be spared from this."

He said he hoped cuts would be "temporary in nature," adding that Maryland is better positioned than other states to make a quick economic recovery.

In his public remarks, O'Malley did not address an issue of pressing concern to local governments -- whether the state might have to shift a portion of the $600 million cost of teacher pensions to counties.

Asked about pensions after his speech, he called the discussion a "perennial debate" and said he hoped that the state would pursue "all viable options" to lessen the pain of cuts.

Senate President Thomas V. Mike Miller Jr. (D-Calvert), who will address the conference this morning, has said he believes the legislature should look into asking counties to shoulder a portion of pension costs.

O'Malley spoke before a somber meeting of county leaders. The association meets each year just before the opening of the annual 90-day legislative session. This year's gathering has been dominated by talk of the state's growing budget problems. Last month, a state panel doubled its estimate of the shortfall for next year's budget from a figure calculated just three months earlier.

Because 40 percent of the budget is made up of direct support to local governments, any cuts are likely to include reductions in state aid to counties, which face their own economic woes. Prince George's County is projecting a $73 million shortfall even without further cuts from the state; Montgomery budget planners are looking at a $450 million gap.

This week, O'Malley postponed decisions on $66 million in midyear budget cuts affecting aid to local governments and educational institutions. His spokesman has said he would present proposed cuts for this year's budget soon.

O'Malley will unveil what is expected to be a particularly austere budget before the end of the month.