ANNAPOLIS, DEC. 8 -- Maryland Gov. William Donald Schaefer today blocked the start of new road construction projects after advisers warned there would not be enough money to pay for them all. The action was the latest in a series of retrenchments by state government as Maryland's fiscal health has worsened.

Schaefer said the state's transportation trust fund faces a deficit of more than $200 million in the next two years because revenue from gasoline taxes, vehicle titling fees and corporate income taxes is down.

Among the projects delayed by the governor's order is the widening of Route 50 from the Patuxent River to Annapolis, a corridor heavily traveled by Washington area motorists bound for the Chesapeake Bay and the Eastern Shore. The order will not affect ongoing construction or safety-related projects, Schaefer said.

But the news likely endangers at least two other projects of importance in the Washington region: the proposed widening of a section of the Beltway in Prince George's County and the proposed trolley to connect Bethesda and Silver Spring in Montgomery County.

Schaefer asked the Department of Transportation to report within 45 days on how to deal with the deficit.

"This will give incoming Transportation Secretary {James} Lighthizer time to study the situation and look at what needs to be done in the future," Schaefer said in a statement released by his office.

Schaefer's order came two days after he announced plans to lay off as many as 1,800 state workers Jan. 1 and dip into reserve accounts to help alleviate a projected $423 million deficit in the separate account that covers costs of schools, prisons, health programs and protecting the environment. Final decisions on the layoff and other general fund cutbacks will come later this week, after the governor meets again with General Assembly leaders.

The combined gloomy forecasts for the transportation trust fund and the general fund may increase the chance of a tax increase when the General Assembly convenes next month.

Legislative leaders already have discussed whether to increase the gasoline tax for transportation projects and other taxes to prop up the state's general spending, beginning in the next budget year.

Some lawmakers, however, questioned whether Schaefer's announcement today was intended to force the debate on increasing the 18.5-cent-a-gallon gasoline tax, which was last raised, by a nickel, in 1987.

Schaefer has refused to lead the way in advocating an increase in the tax, although he has said repeatedly that more money is necessary to keep the road-building program going.

"The reasons might be right or wrong, but at least they're taking action now to get ahold of spending," said Senate President Thomas V. Mike Miller Jr. (D-Prince George's). "If he thinks a transportation tax is necessary, he should . . . announce what he's for."

Stephen Zentz, deputy transportation secretary, insisted that the announcement wasn't an attempt to "put a gun to their head" to force a tax increase.

"It's reality," Zentz said. "Otherwise, we'd put ourselves in such a deficit we won't be able to get out of it."

The practical effect of Schaefer's announcement is to push back $330 million in projects scheduled during the next 45 days for advertisements, bid openings or construction contract awards.

"It would be inappropriate, if not illegal, for us to continue with projects that we know we're not going to have the money to pay for," said Schaefer's press secretary, Paul E. Schurick.

Schaefer made the decision after meeting Friday night with Department of Transportation officials and William K. Hellman, a former department secretary who is chairman of a gubernatorial commission scheduled to report Dec. 18 on its study of the need for new revenue.

Zentz said that revenue is falling far short of the forecast on which the construction schedule was based.

In the next 18 months, he said, the transportation trust fund will take in $206 million less than anticipated.

The downturn was attributed to gasoline conservation, declining title tax revenue because of weak car sales, and a dip in corporate income tax.

As for the outlook for planned highway projects, Zentz said: "I don't think there's any question that some portion will have to be curtailed for the long term. We can potentially move forward with one-third of the program."

Sen. Laurence Levitan (D-Montgomery), chairman of the Budget and Taxation Committee, conceded that pressures are building for an increase in the gasoline tax or some other form of transportation revenue to keep the road-building program going.

"The counties are going to be all over the legislature once they find out the infrastructure in the pipeline they counted on is not going to be there," Levitan said.

Said Miller: "There is a need for a gas tax increase, but it will be much less than what the future needs would dictate."

Although not immediately affected by Schaefer's order today, several projects in the Washington suburbs could now be postponed or abandoned in the reevaluation to be completed within 45 days.

In March, the state is scheduled to take bids on a $15.6 million plan to widen the Capital Beltway in Prince George's County between Route 650 and Route 1. The state also had set aside the initial installment of $70 million in the next budget year as its portion of the disputed Bethesda-Silver Spring trolley line.

One mass transit project that likely will be delayed is the $400,000 expansion of parking facilities at the Laurel MARC station in Prince George's County.

But the revenue shortfalls in Maryland's transportation budget pales somewhat beside the trouble ahead for the fund that pays for virtually all other state government functions. Although Schaefer looked to close the gap this year by firing workers and tapping a "rainy day" account, the stagnant economy is expected to fall almost $450 million short of being able to maintain programs in the year that begins July 1.

The latest news about the transportation trust fund means that Schaefer will have to abandon plans to shift more than $20 million from that fund to help make up the general deficit.

On Friday, some key budget leaders said minor tax increases may be needed in the longer term.

Del. Tyras S. Athey (D-Anne Arundel), chairman of the Ways and Means Committee, said that the House is not prepared to accept the full $800 million tax increase proposed recently by a gubernatorial commission.

But, he added, "There are some things in there that might help us over the hump."

Levitan too said some decisions may be forced on the legislature.

"There are no major taxes on the table, but it's possible there could be some minor taxes" next year, Levitan said. "The George Bush line about no new taxes is old hat. You have to look at the real world."


Here are some of the $330 million in Maryland construction projects most immediately affected by Gov. William Donald Schaefer's order:

Prince George's County

Route 214, from Brightseat Road to west of Campus Way, $25.5 million.

Route 193 bridge over the Northwest Branch, $1.5 million.

Montgomery County

Route 107 bridge over Dry Seneca Creek, $3 million.

Route 28, from Nelson Drive to Route 189, $1.5 million.

Anne Arundel County

Route 50, from Route 424 to Interstate 97, $43 million.

Route 50, from the Patuxent River to Route 424, $35.5 million.

Route 32 interchange at the Baltimore-Washington Parkway, $8.6 million.

Route 4 interchange at Route 408, $8 million.

St. Mary's County

Route 235 from Route 4 to Rue Purchase Road, $1.1 million.

Baltimore County

Interstate 83 resurfacing, $12.5 million.