ANNAPOLIS, NOV. 17 -- With Maryland expecting a large budget surplus despite uncertain economic times, an advisory committee proposed restrictions today on the way Gov. William Donald Schaefer can use the surplus for next year's budget.
Under a recommendation adopted by the Spending Affordability Committee, the governor would be able to use only about $52.8 million of the money for new programs, such as increased aid to higher education.
The rest, about $70 million, would have to be set aside for future emergencies, returned to taxpayers or used for one-time purposes, such as construction, that would not cause the budget to grow in future years.
The spending guidelines allow the state's existing budget to grow by more than 8 1/2 percent -- more than $556 million that doesn't include federal programs or capital appropriations. The increases would cover programs whose costs rise automatically, such as the state's education aid program and also provide for regular inflationary increases.
Department of Fiscal Services Director William S. Ratchford II said it also would allow pay increases for public employes and an increase in welfare grants.
Schaefer is not required by law to follow the committee's advice, and he tried to spend more than the committee recommended when he submitted his first budget to the legislature in January.
He has told legislators this year that he will follow guidelines.
The committee's recommendation is based on estimates by the General Assembly's Department of Fiscal Services on how much money the state will have available to spend for the fiscal year that begins July 1.
Ratchford told the panel that because of national economic uncertainties and prospects for cuts in federal aid, he is using a cautious revenue estimate that is about $60 million less than a figure given earlier.
Despite the reduction, there is still money to pay for normal growth in the budget, without cutting programs, with funds left over.
The committee recommended that some of the surplus be put into a fund to pay off depositors whose money is frozen in savings and loan associations.
Those payoffs come due at the end of 1989.