Md. Approves an Additional $454 Million in Budget Cuts

By Aaron C. Davis
Washington Post Staff Writer
Thursday, August 27, 2009

To close its latest budget shortfall, Maryland will shut down a state-run psychiatric hospital, nearly eliminate money for county road projects, slash funding for cancer research, reduce reimbursements for health-care workers and facilities caring for Medicaid patients, and close a minimum-security prison.

On Wednesday, the panel of three Democrats charged with making midyear budget cuts unanimously approved Gov. Martin O'Malley's plan to carve away $454 million to close the spending gap that emerged last month. As in the rest of the Washington region, lower-than-expected tax collections and rising unemployment have battered state revenue projections.

The cuts by the Board of Public Works, along with $280 million in spending reductions it approved last month, amounted to just 5 percent of the state's $13.4 billion general fund. But after prior reductions, the latest action lifted Maryland's list of spending cuts since 2007 to more than $4 billion. It also made clear that these and any future cuts would affect direct state services that many taxpayers consider entitlements.

The cuts also include 205 layoffs, furloughs of 70,000 state workers and measures ranging from reductions in firearms training for park rangers to encouraging state workers to use generic cholesterol drugs.

O'Malley (D), a member of the board, cast the actions as the kind of tough decisions that governors are elected to make.

"Some of these cuts will no doubt challenge us as we've never been challenged before," O'Malley said. "Ultimately, we're mindful that we have to make decisions . . . to get our state through this recessionary storm."

He said it will probably be tougher for Maryland to manage an expected swine flu outbreak this fall and to keep crime and other problems in check as state government downsizes.

Advocates for the developmentally disabled and a smattering of state workers wearing T-shirts emblazoned with union insignias squeezed into Wednesday's standing-room-only board meeting and later criticized the package as unfair and detrimental to the public.

Of the $223 million in cuts estimated to come from the state's general fund, roughly $90 million, or 40 percent, will come from the state's Department of Health and Mental Hygiene. Advocates said that was disproportionately large, nearly twice the size of its share of the general fund.

"People are going to be less safe, and their health and quality of life are going to be affected by these cuts," said Laura Howell, executive director of the Maryland Association of Community Services. The facilities that provide care for 22,000 developmentally disabled residents have an average profit margin of 1.6 percent, she said. "A 2 percent cut is going to drastically affect our services."

Bonnie Nicholson, 64, a Motor Vehicle Administration employee who wore her forest-green American Federation of State County and Municipal Employees T-shirt, said some of the cuts seem short-sighted. Furloughs -- as much as 10 days of unpaid leave -- will hit tens of thousands of middle-class public servants harder than it might seem, she said.

"If you short-staff a revenue-collecting agency . . . you can't bring in money for the state," Nicholson said. "When you decrease [workers'] salaries, it makes it harder for them to meet their expenses . . . and their own family mortgages."

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