Blame it on the sun, the rain or Saddam Hussein, but elected leaders in the District, Maryland and Virginia say the budget shortfalls plaguing those governments are due to forces out of their control.

Yet while a soft economy and falling tax receipts help explain the pending deficits, there is dispute over whether the downturn could have been perceived earlier and better planned for. The landing, some analysts contend, could have been softer.

"There is no question that the economy turned quicker and faster than people expected," said Gerald Miller, executive director of the National Association of State Budget Officers. "It is also true that in both of those states {Maryland and Virginia} . . . they were spending at a level that could not be sustained . . . . Part of the problem could have been avoided."

With an overbuilt real estate market, the unfolding savings and loan crisis, talk of cuts in military spending and a general recognition that good luck can't last forever, the current situation "was predictable, but nobody was watching very carefully," said Steven Fuller, chairman of the urban planning and real estate department at George Washington University and an expert on the economy of suburban Washington.

If there is any solace, it's in the company: More than half the states in the nation are facing budget problems, Miller said. And some are preparing to borrow cash for operating expenses.

How did it happen?

The situation differs in each jurisdiction. The District's problem evolved over several years, driven by rapid increases in spending on social services and criminal justice, limits on the city's federal grant and bills inherited from the era before home rule. The real estate downturn further deepened the deficit.

Virginia and Maryland are more victims of the economic slump, with both states blaming their budget gaps on poor tax receipts.

"If you ask the average guy on the street, they would say because of the stadium and light rail line overruns and improvements at the {Governor's} Mansion," said Del. Timothy F. Maloney (D-Prince George's), citing major projects that Maryland taxpayers have questioned. "Actually, none of that is true. If you look at the components of the deficits, it is all a classic sign of a recessionary economy."

"It's a regional problem," said Paul W. Timmreck, Virginia's secretary of finance.

The stage, however, was set gradually, as state officials pursued greater levels of spending during the good years. Just two years ago in Maryland, for example, Gov. William Donald Schaefer and the state legislature were dividing the spoils of a $400 million surplus, sending part back to taxpayers in the form of an income tax break that arguably made the current shortfall worse.

As recently as last spring, even though sales tax receipts had begun to weaken and there were signs of a general slowdown, Maryland legislators cut the welfare department's budget by $3 million, laying their bets on an economic turnaround. Underfunding of welfare and other entitlement programs subsequently added $70 million to the budget gap. Schaefer, meanwhile, in an election-year nod to environmentalists, approved an aggressive parkland purchase program that he is now having to undo.

Less than two years ago, the Virginia legislature passed a massive tax relief program for retirees. But with the shortfall looming, it rescinded that program a year later.

Budget worries have shaped recent political debates in the region and promise to be a dominant issue as legislatures convene in Annapolis and Richmond next month and Washington Mayor-Elect Sharon Pratt Dixon takes office.

Dixon, in fact, built a campaign around fiscal responsibility, promising to clean house in the bureaucracy and come to grips with a deficit estimated at $200 million. She is already wrestling with the controversial changes recommended by a government cost-cutting commission.

Virginia Gov. L. Douglas Wilder, meanwhile, laid off nearly 800 state workers to deal with a projected two-year shortfall of $1.9 billion -- about 15 percent of the state's biennial general fund budget. More pink slips are expected.

In Maryland, Gov. Schaefer has avoided layoffs so far, but may ultimately resort to them to help resolve budget gaps estimated at $423 million for this year and $200 million for the budget year beginning next July.

All in all, it isn't a fun time to be in charge.

"This will cut very deep," Schaefer said Friday, describing reductions that already have trimmed state subsidies to kidney dialysis patients and have led him to consider trying to wrench more money from counties for social services.

Legislative and executive branch officals in all three jurisdictions argue that it is unfair to second guess such decisions and blame them for unforeseeable events, such as the Persian Gulf crisis, that soured tax receipts. Government spending plans are based on economic forecasts that, they say, are bound to be off the mark sometimes. In budgets as large as a state government's, even a small error can balloon quickly into a big deficit: Estimates of Maryland individual income tax, for example, are off by only 3.7 percent so far, but the result is a $117 million hole.

"Everybody saw something coming . . . the question is how big is it going to be," said Dennis H. Parkinson, deputy budget director for Maryland.

"People get paid enormous amounts of money on Wall Street {to predict the economy} and generally are wrong, so it is not surprising that you have these margins of error" at the state level, added Maryland Del. James C. Rosapepe (D-Prince George's).

Other officials aren't as forgiving and argue that the limits of forecasting ought to be recognized by those responsible for crafting budgets.

Although used to predict the future, forecasts are based on historical trends more reflective of what has happened than what is to come, said Virginia Senate Majority Leader Hunter B. Andrews (D-Hampton).

"After you've already fallen flat on your face, they'll tell you what's happening," he said.

In that sense, Miller and others said, the current situation reflects a clash between economic and political realities: Growth stops; the demands on government don't. In lean years, that means advocacy groups fight to preserve their programs, while taxpayers demand a hunt for waste. In flush times, it means pressure for new programs or tax cuts.

The boom-bust cycle can lead to emotional scenes -- such as last week's picketing of the Maryland State House by dialysis patients -- but the alternative of socking away money in good times is politically difficult, local officials said.

Currently 13 states, including Maryland and Virginia, maintain reserve "rainy day funds" of $50 million or more, and most are expected to tap them before the year is over, Miller said. (Saying Virginia's economic problems might get worse, Wilder has resisted calls to draw on a $200 million reserve.) More permanent remedies, such as the use of long-range growth projections that try to limit spending in prosperous years to balance downturns, are hard to enforce when constituents come knocking, he said.

"This was one of the longest periods of sustained growth we have had. And there was not a lot of memory around," Miller said.

Local leaders argue that, on the whole, they have behaved prudently. Maryland leaders, for example, spent most of the recent surpluses on onetime items such as school construction that don't drive up the spending base. Both the administration and legislature take credit for that fact today.

In the District, Deputy Mayor for Finance Robert Pohlman pointed out that more than $100 million was set aside during the mid-1980s economic boom toward paying the government's outstanding debt -- a fiscally responsible move, he said. Wilder, initially criticized by some for "manufacturing" a budget crisis to prove he could manage it, has convinced even the most ardent cynics with deficit projections that plunged $1.1 billion in six weeks over the summer, prompting the layoffs and agency cuts of 5 to 10 percent.


Jurisdiction............Fiscal 1981......Fiscal 1991

District of Columbia...$1.5 billion.....$3.9 billion

Maryland...............$5.4 billion....$11.1 billion

Virginia.................$6 billion....$12.9 billion

SOURCE: State governments