In Baltimore's City Hall, officials are trying to figure out how to cope with what could become an eight-mile stump of a subway system going from downtown to the northwest corner of the city.
The subway will cost an estimated $100 million a mile, but cuts in federal aid may force a doubling of fares and have turned a proposed six-mile extension into the suburbs -- an essential source of commuters and their fares -- into a question mark.
Just a mile away from city hall in the state office building, welfare and human resources officials are staring at food-stamp cuts that will eliminate or reduce benefits for about 130,400 persons in the state.
A complex alteration of the basic welfare program, Aid to Families with Dependent Children, will reduce the federal subsidy by $10.6 million, cutting 30,370 persons from the rolls and reducing benefits for another 10,613. The basic social services block grant will be reduced by $9.47 million, forcing some day-care centers to close and other programs to cut back.
At a more arcane level, employes in the Maryland anadromous fish program are looking at a reduction in federal aid in 1983 from $53,373 to $35,000, about the pay of a clerical worker. Federal support of the state's research and development program in commercial fishing will drop from $252,515 to $177,000 in 1983. The $165,441 federal grant for the state endangered-species program will be cut altogether.
These numbers are part of a second stage in the budget-cutting process, after $35 billion worth of reductions were pushed through Congress by the Reagan administration and signed into law last month.
State and local government officials in Maryland and across the country are trying to analyze the consequences of the spending reductions, most of which are in domestic programs directly affecting this level of government. The third stage will be the absorption of these cuts by the beneficiaries and employes of the programs.
In Maryland, there is considerable disagreement over the scope -- not to mention the consequences -- of the cuts. Gov. Harry Hughes and his aides have estimated the loss to the state government will be $50 million (excluding cuts in aid to local governments), far less than the $200 million to $215 million expected when Reagan announced the original cuts in February and March.
"I look forward to this with great optimism, that we're going to solve the problems of our people and they are going to look upon what we've done with pride," Hughes told the Maryland Association of Counties on Aug. 22.
Preliminary estimates by the state legislature's Department of Fiscal Services place the loss to the state at a far higher figure, at least $80 million in four state agencies alone, and the estimate is likely to grow after completion of the study.
A standard accounting figure used by Maryland fiscal experts is that an average of 2 percent of every domestic federal spending program goes into the state in the form of direct spending by federal agencies, in grants to state and local governments, and in programs for Maryland residents.
This would suggest that total reductions for the state, many of which are hard to trace because they go through no central channel, could be as much as $700 million and are unlikely to be lower than $350 million, or one percent of the total cuts.
Baltimore expects to complete an agency-by-agency review of the cuts early next month. The state Department of Budget and Fiscal Planning has just completed a 118-page overview of the cuts, but it is only a working document on which to base decisions such as which "hospital rooms and day care centers will be closed," said Ejner J. Johnson, Hughes' chief of staff.
Among the major preliminary findings, however, are:
Food Stamps -- A total of $38.5 million will be cut. Of the 345,300 recipients in the state, 17,550 will be eliminated from the program and 122,850 will see their benefits reduced. The cuts and reductions will center primarily on the working poor, while those entirely dependent on welfare will face smaller reductions or none at all.
The cuts will focus on the working poor because they are achieved largely through administrative changes that focus on recipients with some private income. Among the changes: The ceiling for eligibility will be set at 130 percent of the poverty level, or $10,895 for a family of four, replacing a system based on poverty but which provided for many deductions in determining eligibility that worked to the advantage of employed persons. In addition, the standard deduction and child-care deduction used for determining eligibility will be frozen at current levels until July 1, 1983, and the 20 percent earnings deduction used to determine a family's net income will be reduced to 18 percent.
Families with earned income will be subject to monthly reporting requirements, and strikers will be ineligible to receive benefits.
Welfare -- The AFDC program will be reduced in Maryland by $10.6 million, primarily through changes in regulations. Of the 219,400 in the program, 30,370 will be cut from the rolls and 10,613 will receive reduced benefits.
As with food stamps, the cuts will center on persons who are working and are not entirely dependent on the government. Deductions in determining eligibility and benefit levels for child care and work expenses, for example, will no longer be unrestricted. Instead, the work expense will be set at a ceiling of $75 a month and the child-care costs at $160.
In addition, a complex accounting system designed to encourage work by welfare recipients, known as the "$30 plus one-third disregard," will be available to recipients only during the first four months. Under the rule, state welfare officials, when calculating a recipient's benefits level, would do the following for a person making, for example, $200 a month: work expenses of, hypothetically, $40 would be deducted, lowering $200 to $160. The $30 is taken off the top, making the amount $130. Then one-third of the remainder, or $43.33, is deducted, making the net reduction in the welfare payment $86.67.
This system is intended to reduce the incentive not to work that results when every dollar earned is deducted from the welfare payment, in effect a 100 percent tax on earnings. Kalman R. Hettleman, secretary of the Maryland Department of Human Resources, bitterly complained that the changes in both the food stamp and the AFDC programs "fly in the face of so much Reagan rhetoric" calling for persons to try to reduce dependency on federal transfer programs and to go to work.
Mass transit -- Baltimore officials contend that the reductions on operating subsidies and in capital construction grants will both function to make it increasingly difficult to operate the subway system under construction in Baltimore.
"With the elimination of the subsidy, and assuming inflation continues, one could expect the basic bus fare to go up to $1.30 and to $1.40 by 1985," said Mark Wasserman, physical development coordinator for Baltimore Mayor William Donald Schaefer. More serious, however, is the likelihood that there will not be direct federal support for the extension of the subway.
The system will go from Charles Center downtown to the Reisterstown Road Plaza in the northwest corner of the city, an eight-mile leg. Transit officials had been planning to extend this first leg six more miles into suburban Baltimore County, to a station in Owings Mills.
Wasserman said the city will try to obtain the $150 million for the six-mile extension by shifting money already allocated the city under the interstate highway program for a segment of the interstate system at Leakin Park, which will not be built. This process, however, may take a long time and could kill current plans to build the subway extension concurrently with a highway, using the median strip for the rapid rail system, he said.
City redevelopment -- In addition to problems with the subway system, a key to the redevelopment of Baltimore, cuts in a number of other programs, while smaller in dollar terms, will undermine the renewal program, according to Wasserman. The city expects the cutback in the Economic Development Administration to result in a reduction in EDA grants from $4 million to $5 million a year to $2.5 million or less.
These grants have been used, in part, to pay for utility roads, lighting and other investments in city-owned industrial parks. Similarly, some of the expansion of home ownership in the city had been accomplished using 3 percent loans through a Department of Housing and Urban Development program that is to be cut back.
The city expects that reductions in the funding of the Section 8-subsidized housing program will mean construction of 110 fewer units next year.
Jobs -- The federal decision to eliminate totally the controversial public-service jobs program under the Comprehensive Employment and Training Act will result in the loss of $80 million in federal funds to Maryland and the elimination of 6,000 jobs.
In addition, cutbacks in the unemployment insurance program and in the Trade Adjustment Act, which provides benefits to persons forced out of work as a result of foreign competition, will reduce federal support by $18 million. About 7,000 persons will lose benefits.
Health and nutrition -- Under the original Reagan plan, state health officials had expected a cut of $27 million in the Medicaid program, which finances health care for the poor. Congress, however, significantly lessened the severity of the reduction, and the loss in 1982 is now expected to be $3 million.
Similarly, Congress rejected altogether what would have been about a $4 million cut in the state program providing nutritional benefits to pregnant mothers and young children under the WICs (women, infants and children) program.
However, smaller programs providing money for maternal and child-care benefits have been put into a block grant and cut so that the amount going to Maryland will be about $1 million less than last year. Two other block grants have been created for preventive health and mental health, resulting in a cutback of $728,000.
A number of nutrition programs for children have been cut, the largest of which is federal aid for school lunches. The cuts for Maryland amount to about $14 million. Most of these cuts will result in higher charges for school lunches.
Education -- A wide range of federal aid programs to Maryland have been sharply cut back. State officials estimate that grants for vocational rehabilitation will drop by more than $1 million, from $14.5 million to $13.4 million. Vocational education will lose more than $2 million, going from $13.7 million to $11.4 million; grants for education of the handicapped will be cut from $26.3 million to $20.8 million.
In addition, basic federal block grants providing money targeted to disadvantaged children will drop from $49.2 million to $45.3 million.
All the state's colleges and universities will lose money in varying amounts. A preliminary study of the university system showed, for example, that per-capita grants to the University of Maryland's Baltimore campus will drop from $1.02 million to $64,515. At Bowie State College, the $250,000 federal grant for work-study will remain the same in 1982, but in 1983, it will drop to $150,000. At Coppin State College, a $35,000 federal grant for an urban economic development center will be eliminated altogether in 1983.
The Farmers' Home Administration grant will be kept at $48,363 in 1982, but then wiped out in 1983. Aid for the state's historical trust will be cut from $1.7 million to $1.3 million in 1982, but in 1983 it will drop to $500,000. Money provided the state under the National Endowment for the Arts will be maintained in 1982 at just over $400,000, but in 1983, it is expected to drop to $200,000.
The community-service grant to the Maryland Center for Public Broadcasting also will be maintained at $1.4 million in 1982, but will fall to $1 million in 1983.