A panel in Maryland agreed Wednesday to $77 million in cuts proposed by Gov. Martin O’Malley (D) to a state budget that the legislature approved just three months ago, in an acknowledgment that tax revenues are not likely to be as robust as projected.
The cuts amount to about 0.5 percent of the planned $16.1 billion in general-fund spending in the current fiscal year, which began Tuesday. O’Malley proposed eliminating 61 vacant positions across state government, including public universities, but sought no layoffs in the 80,000-member workforce.
Details of the cuts were presented Wednesday morning to the Board of Public Works, a three-member panel on which O’Malley sits along with the state treasurer and comptroller. The board is authorized to make cuts to the budget when the legislature is not in session and did so on seven occasions between 2007 and 2009, when the state was grappling with the effects of the recession.
Still, the move was somewhat unusual, coming just days into the new fiscal year and so soon after the General Assembly completed work on what was advertised as a balanced budget. Aides said O’Malley decided to take action now because it is harder to cut as the budget year progresses.
“We’re trying to take a proactive, conservative approach to planned spending,” said O’Malley spokeswoman Nina Smith.
Aides said Maryland is not in a unique position. Many other states are having to trim budgets, in part because of continuing effects of the federal sequester, they said.
“What we’re dealing with is a statewide reflection of a national problem,” Comptroller Peter Franchot (D) said of Wednesday’s action. “While it’s true that nobody wants to be in a position of cutting department budgets in a fiscal year that is less than 48 hours old, I believe that (the O’Malley administration) is being pragmatic in getting out in front of the situation, rather than simply hoping that things will get better and, then being forced to take even more difficult actions if and when they don’t.”
In addition to $77 million in budget cuts, O’Malley also is taking $7 million in other budget actions that don’t require board approval, aides said. Those cost-saving measures include holding back planned spending and transfers among other funds.
Of the $77 million in reductions, about $56 million will come from the operating budgets of state agencies, and another $10 million will come from public universities in Maryland. Another $10 million will come from “fund swaps.”
In the latter case, programs that operate using a combination of federal and state funds are in a position to spend more federal funds than originally projected, freeing up state dollars, budget officials said.