O'Malley Warns of $250 Million in Cuts for Md. Aid to Local Services

By John Wagner
Washington Post Staff Writer
Sunday, August 16, 2009

OCEAN CITY -- Maryland Gov. Martin O'Malley told county officials Saturday to brace for $250 million in cuts in state aid for local health services, police departments, community colleges and road maintenance to help balance the state budget.

The former mayor of Baltimore, O'Malley has largely resisted cutting aid to local governments in previous rounds of budget cuts. But the aid -- which accounts for more than 40 percent of the state's general fund budget -- has become an increasingly attractive target as tax revenue lags in the bad economy.

The reductions in state aid will be a large part of a new package of budget cuts the governor plans to formally propose Aug. 26, aides said.

O'Malley (D) needs to close a $700 million shortfall that emerged in the state's $13 billion budget weeks into a new fiscal year. The governor told county leaders gathered here for an annual conference that he had trouble sleeping the night before as he prepared to deliver the news.

"I know that none of you go into public service to dismantle your government," O'Malley said. "You go into public service, whether you're a Democrat or a Republican, because you want to build things up, you want to make things better than you found them. This is all very hard on all of us."

The impact could be substantial. State aid is the largest source of revenue for most county governments in Maryland, although dependence on the funding varies greatly. More affluent jurisdictions rely more heavily on property and income taxes.

As a share of county revenue, state aid ranges from a low of 14 percent for Montgomery County to 49 percent in Somerset County, according to state analysts. State money flows to the counties through dozens of individual programs.

"We're going to see a lot more pink slips and furloughs," said Michael Sanderson, executive director of the Maryland Association of Counties. "I think that's absolutely what's going to happen. The easy nips and tucks have already been done at this point."

O'Malley said education will be spared but plans to take the savings from nearly $1 billion set aside for other local programs in this year's budget.

County leaders at the convention said they could not say exactly where cuts would come from until they receive specifics from O'Malley and his staff. But they suggested that services reduction, layoffs and furloughs would be unavoidable.

"This will hit us pretty hard," said Montgomery County Executive Isiah Leggett (D), whose county laid off 400 employees and eliminated more than 200 vacant positions to balance its budget. Leggett did not specify where he would cut but said "everything is on the table."

Leggett was among those at the conference who worry that even more cuts loom.

CONTINUED     1        >

© 2009 The Washington Post Company