Stimulus Pushed To Aid Schools

O'Malley Also Seeks To Prevent Layoffs

Maryland Gov. Martin O'Malley yesterday proposed using federal stimulus money to reverse some of his least popular budget plans for next year, including the layoffs of 700 state workers and reductions to public education and community colleges.

O'Malley (D) said that with the infusion of federal funds, the state's 24 school districts would be "made whole" from cutbacks in the budget he submitted to lawmakers last month, which sought to address a $2 billion shortfall next fiscal year.

The governor said he was also restoring a commitment to fund a formula that sends additional education dollars to jurisdictions, including Montgomery and Prince George's counties, where the cost of providing education is more expensive.

"Fortunately, we have a president on our side who is fighting to help us," O'Malley said at a news conference. Joining him were more than a dozen lawmakers, most of whom sit on the legislative committees that craft the state's $14 billion general fund budget.

O'Malley said $721 million in stimulus funds would be used to supplement the state's public education budget over the next two years. Of that, $329 million would be used to cover growing teacher retirement costs. The retirement program proposal is expected to end a debate about whether the state should shift a portion of pension costs to the counties.

O'Malley's proposal would also allow a 5 percent increase in community college funding. His earlier budget proposal essentially would have frozen funding for the third year in a row, which probably would have prompted tuition increases.

Democratic leaders hailed O'Malley's announcement, but it drew criticism from Republicans, who cautioned against using stimulus funds, which will be available for only two years, to cover ongoing operating expenses.

"I think it's a horrible idea," said House Minority Leader Anthony J. O'Donnell (R-Calvert), who predicted that budget deficits would swell after the federal help disappears. "It's irresponsible."

O'Malley brushed off such concerns.

"I'd be more worried if I didn't have the money to plug the holes," the governor said, voicing hope that the economy would improve in coming years and bolster state tax revenue.

"If you have faith that the stimulus plan will work and will help grow the economy faster than anticipated, we should be in position to address the spending in two years," said Sen. Richard S. Madaleno Jr. (D-Montgomery), a member of his chamber's Budget and Taxation Committee.

O'Malley's decision to abandon the layoffs of 700 workers was warmly received by employee union leaders.