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Md. Approves $454 Million Cut to Fill Latest Gap

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."

Republicans also blasted O'Malley's package as minor one-time fixes that will do little to drive down ongoing expenses and insulate the state from a projected deficit of more than $1 billion next year. O'Malley's budget chief acknowledged that more than $350 million of the $454 million in cuts will not help the state in future years.

Republican state Sen. E.J. Pipkin, who represents a northeastern district where the 40-bed Upper Shore Community Mental Health Center will be closed, said the governor has lacked the backbone to look at big-ticket changes such as shifting some of the state's $600 million in teacher pension costs to counties.

"How do I go home tonight and tell people we're going to close the mental health facility but we found over $1 million to go out and buy speed cameras?" Pipkin said.

Some of the 119 employees on duty Tuesday night at Upper Shore were called to a meeting and told that the facility, one of Kent County's biggest employers, will close by February.

Secretary of Health and Mental Hygiene John M. Colmers said the $12 million, or 2 percent, the state is cutting in rates for thousands who care for Medicaid patients roughly equals the pay cut that state workers are being forced to take through furloughs.

Wilson H. Parran, president of the Maryland Association of Counties, told the board that the $159 million in cuts to county transportation funding will be felt by millions of residents. In Calvert County, where Parran is president of the board of commissioners, the state allotment of $6 million for road funding last year has shriveled to less than $300,000 this year. "We will be able to pave less than two miles of roads in Calvert," he said.

State cancer research funding for the University of Maryland and Johns Hopkins University will be slashed 75 percent, or $7.5 million.

The state will also close the 350-inmate Herman L. Toulson Correctional Facility in Jessup, in Anne Arundel County. Once a boot camp designed to rehabilitate young offenders, the site had been reduced to a regular prison through previous cuts that eliminated health care and other follow-up services, said Gary D. Maynard, secretary of public safety and correctional services. Now, he said, it's just "time to close."

Staff writer Ashley Halsey III contributed to this report.

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