Maryland may lose more than a third of a billion dollars this year because of the Reagan administration budget cuts and tax reductions, two prominent state legislators said today.
Democratic Del. John R. Hargreaves, chairman of the House Appropriations Committee, said the state is expected to lose in fiscal year 1982 about $145 million for programs previously administered by state agencies and $174 million in other programs such as food stamps, trade adjustment assistance, impact aid and community action grants. The state's fiscal year began last July.
"That's a lot of money," Hargreaves told the Maryland Chamber of Commerce 16th annual legislative conference. "Somebody has to get hurt. Somebody has to suffer a bit." But no one yet knows who that will be, the Caroline County legislator said.
Sen. Laurence Levitan (D-Dist. 15), chairman of the Senate Budget and Taxation Committee, said state revenues will drop by $181 million by 1986. A combination of revenue and program reductions "is rather staggering," Levitan said.
Hargreaves said state government officials are "puzzled, uncertain, even a little bit frightened" by the Reagan administration's activities. "We know we face a problem, but we don't know its scope," Hargreaves said.
Hargreaves said it is still too early to know specifically how to handle the expected drop in services, particularly since he said the administration revises its program every week. He called the state's handling of the cuts "the greatest single issue of this legislative session," beginning in January.
Gov. Harry Hughes said during tonight's closing dinner that the business community should help make up for the withdrawal of federal funds from state programs by the Reagan administration.
"If we are to make certain that the withdrawal of federal programs for many among the nation's truly needy does not result in wholesale hardship across our nation and across our state, we must do better," Hughes said.
Hargreaves proposed to "take steps" to give the legislature more authority in determining the state's budget. He said that because state legislators in 1916 were spending more money than they were taking in, a law was passed allowing the governor to present a budget in which the legislators can make few changes.
Hargreaves, however, ruled out a tax increase.
Levitan outlined areas in which the government will lose revenues because of federal tax-rate changes. The change in deductions for two-earner married couples will reduce state revenues about $8 million in 1983 and about $23 million by 1986, he said. Changes in taxation of Americans overseas will reduce revenues by about $3 million in 1983 to about $4.3 million in 1986.
The All Savers certificate and modifications in IRA and Keogh plans will drop revenues by $11 million in 1983 and by $52 million by 1986, Levitan said.
The new business depreciation schedule adopted by Congress will cause Maryland to lose about $8 million in 1982 and $77 million by 1986.
Levitan said the first order of business for his committee in January will be to hold hearings on the impact of the federal budget and tax cuts.