The course of this year's Maryland General Assembly session is being set in a series of somber gatherings in an elegant reception room on the second floor of the statehouse here, not by legislators nor even by the governor, but by budget and fiscal experts monitoring the state's precarious finances.
Twice in the last four months, these three old hands at the politics of money -- Comptroller Louis Goldstein, Treasurer William S. James and Budget Director Thomas Schmidt -- have assembled to report, in effect, that Gov. Harry Hughes and the legislature will have little money with which to create or expand state programs this year.
In March, they will meet again and, unless their prognostications change dramatically, they will plunge the legislature into the volatile politics of budget slashing and factionalism.
And so, after two years of pouring the state's largesse into half a dozen major new programs and tax cuts, the legislators trickling into town for the General Assembly opening Wednesday seem as gloomy about their task as the gray winter skies that have hovered over the statehouse.
Almost all of them seem to agree with Hughes that this will not be a session for large initiatives but more likely a long, bleak struggle over resources in which programs, regions and a myriad political factions will be pitted and tested against each other.
"It's going to be grim, with a possibility of becoming bitter," says House Majority Leader Donald B. Robertson (D-Montgomery). "Ordinarily, I could tick off a half-dozen issues, but this year there is one overriding issue -- that is money, or the absence of it. There's simply not enough to go around."
Even without the money battles, this session -- the third of the General Assembly's four-year term -- would tend to be tense and subdued, not only because the last two sessions were heavy with new spending programs but also because of intimations of what is to come next year, when the legislators must draw new congressional districts and those its own members will run in that year.
On the one hand, said House Speaker Benjamin L. Cardin (D-Baltimore), "we really have addressed most of the major issues that were on the agenda two years ago -- tax relief, increased education funding, funding for mass transit, prison construction, pension reform. In terms of major programs, there is not that much left for us to accomplish."
At the same time, next year's reapportionment, many legislators say, is likely to warp the politics of many other issues even this year.
"It'll be the overriding thought in everyone's mind," said State Sen. Thomas V. (Mike) Miller (D-Prince George's). "People will be wondering how each vote will affect next year's vote on reapportionment. The legislator you work with this year may be gerrymandered out of his seat next year."
The state's fiscal problems surfaced in September, when Goldstein, James and Schmidt, who compose the state's Board of Revenue Estimates, formally reported that state revenues were falling off sharply because of recessionary pressures and that the state could face a large shortfall in funds if spending were not curtailed.
Hughes responded by slicing $52 million from the current budget, including an average reduction of 1.8 percent in the budget of every state department. All along, however, the governor has said that the most severe trims will come in the budget he will submit to the legislature next week for the year beginning July 1.
That budget -- and what is left out of it -- will thus become the focal point of the three-month legislative session. Already it is widely expected that Hughes will submit his initial budget without funding for several large expenses, most notably a pay increase for state employees. State agencies were ordered to prepare cuts from 4 to 9 percent as the budget was drafted last fall.
Hughes and legislative leaders are expecting to spend a large part of the session looking for ways to fund what so far cannot be paid for without raising taxes, which is viewed as a politically unacceptable alternative by all sides. Meanwhile, as Senate Budget and Taxation Committee Chairman Laurence Levitan (D-Montgomery) put it, "any [new] proposal that is going to cost any money is almost automatically dead."
There could be a relatively easy way out of the budgetary predicament. If the fiscal experts on the Board of Revenue Estimates find an upturn in state collections for the income and sales taxes when they make their final report in March, Hughes will have a quick pool of money with which to fund the employes pay increase and other items in a supplemental budget.
Both Hughes and legislative leaders are preparing, however, for the grimmer alternative: that no further funds will turn up for next year's budget during the session unless they act directly to increase non-tax revenues or slash state aid to local jurisdictions.
Currently, legislative leaders point to two courses of action that could be used to raise money, although either would be likely to provoke long and loud legislative feuding.
For his part, Hughes is said to be considering cutting state grant programs that provide hundreds of millions in funding to local subdivisions for health, education, police protection and other services. The sums that are delivered through these programs are mandated by state law, so normally the governor and the legislature have had no control over them.
Hughes, however, argues that local subdivisions that have balanced their budgets and even cut their taxes in recent years by sharing in huge state fund surpluses should now share the burden of cutbacks. He is thinking of introducing legislation to change the laws controlling the programs so the grants could be reduced and the money could be diverted to other hard-hit state programs. In particular, the governor is said to be thinking of curtailing a program that returns part of the state property tax collections to local subdivisions for their general use.
Many legislators, particularly those from rural areas where local government is far less burdened than in Baltimore City or urbanized counties, already have endorsed this idea heartily. Some, like Del. John Hargreaves, the veteran chairman of the House Appropriations Committee, are saying that only the governor -- not the legislature -- is required to follow the legal mandates for state grants, and that they will attempt to slash local government aid even if Hughes does not.
Meanwhile, another possible funding mechanism has emerged from a House subcommittee, which for the last several months has been considering ways to raise fees for large trucks that use state highways. Although its proponents say the proposal was developed primarily to ensure that the large trucks pay their fair share of state highway upkeep funds, it already is being mentioned by legislative leaders as a possible source of $20 million to $50 million in extra funds if the fiscal situation remains bleak.
Even if these potentially fractious proposals fade as the session progresses, the budget crunch has created a host of tangential fiscal controversies for Hughes and the legislature to resolve -- and has stolen the limelight from others, such as the proposed constitutional amendments to limit state spending, that were expected months ago to be important.
Probably the most intense debate will focus on the state Department of Transportation, whose officials just this fall told legislators that dozens of road and highway projects throughout the state would have to be cut back because transportation revenues had fallen off this year.
The DOT cutbacks angered legislators from rural areas, who have long felt that too much state transportation aid has gone to mass transit systems in Baltimore City and suburban areas, at the expense of the roads, bridges and other transportation projects in the outlying areas.
Legislative leaders are considering setting up a special oversight committee to examine DOT financing and priorities, and say that attempts to reorganize transportation financing could become one of the most vicious battles of the session, and has the potential of forcing a split between urban and rural factions that would overlap into other issues.
Another controversy is likely to develop as a result of an $80 million deficit in this year's state Medicaid budget. Hughes and the legislature have to find money this session to cover that deficit and fund next year's Medicaid program, and several legislators have said they will ask for cutbacks in the Medicaid services and in systems of payment by poor patients.
In one case, however, the budget problems are likely to eliminate a controversial issue from this year's session: the effort to impose constitutional limitations on state spending. Last year similar proposals caused a furor in the statehouse and were squashed only after legislative leaders and Hughes conducted intensive lobbying campaigns against them.
Aside from his budget, Hughes' legislative package is expected to be relatively modest this year. Most significantly, the administration has drawn up a package of energy conservation bills that would set up a state energy authority to help homeowners and industry obtain low-interest federal loans for energy conservation improvements.
Hughes has said he will support a package of drunk-driving bills proposed by a gubernatorial commission after a series of hearings last summer. These measures would stiffen drunk-driving penalties and lower the blood alcohol level necessary to determine drunkeness.
Other Hughes bills are expected to call for the elimination of judicial elections, increase aid to community colleges, continue targeted education aid to local jurisdictions on a basis of need, and provide at least part of the cost for a $52 million facility in the Port of Baltimore that is needed for the port's massive harbor dredging project, a high priority of the city's business community.
Because of fiscal constraints, Montgomery and Prince George's County representatives are going to Annapolis asking for and expecting little in the way of new funding from the state government. Neither government has developed a "wish list" similar to last year, when education, metro and police funding were their major considerations.