Legislators preparing to clash over cash

Friday, Jan. 9, 2009

That's no easy task this year in the face of a nearly $2 billion shortfall, which explains why lawmakers will spend the bulk of the legislative session that begins Wednesday wading in a sea of numbers.

Put simply, the 2009 session is all about the Benjamins. "I think there will be a lot of gnashing of teeth over the state's budget," said House Minority Leader Anthony J. O'Donnell (R-Calvert, St. Mary's).

Even the most hardened politicians can't recall a more ominous fiscal outlook at the dawn of a session. "In the last 40 years, there's not been a comparable time," said Senate President Thomas V. Mike Miller Jr.  (D-Calvert, Prince George's), who has served in Annapolis since 1971.

Indeed, the enormity of the economic crisis is unprecedented, lawmakers said. And there are no signs of a quick turnaround. "The cavalry's not coming," said Del. Murray D. Levy (D-Charles). "We're going to have to rescue ourselves."

Already, state leaders have made several rounds of cuts just to plug holes in the current year's balance sheet. The Board of Public Works is expected to consider roughly $415 million in additional reductions later this month to make up for underperforming revenue collections in fiscal 2009. But the prospect of a deficit nearly five times larger than that has lawmakers agonizing over what items to pare. "There is no doubt that it is going to be tougher. We're going to be looking more people in the eye and saying, ‘I'm sorry, but this is what we have to do,'" said Del. John Bohanan (D-St. Mary's). "It's never pleasant doing that, but we also have to recognize that there are people who are hurting individually and they're making tremendous sacrifices, so across the board everybody's got to make some sacrifices."

State employees face up to five days of furloughs before the current fiscal year ends June 30, transportation funding has been slashed $1.1 billion over the next six years, aid to community colleges is expected to be trimmed in the next round of cuts and college tuition for in-state residents is unlikely to remain frozen for a fourth consecutive year.

The pain won't end there, as even sacred programs in education, health care and public safety are on the chopping block. One big-ticket item under consideration is shifting the cost of teacher pensions to county governments, which has predictably met significant resistance from local leaders who say it would force them to raise property taxes at a time when citizens are already pinching pennies.

But legislative leaders said counties receive about 40 percent of the state's operating funds and they have to be part of the budget solution.

"The counties are going to scream bloody murder, but they're the largest part of the state's budget," Miller said. "When the sun shines, they do very well, but in down times, they've got to take the proportion of cuts just like everybody else in state government."

Lawmakers agree that there is virtually no appetite for higher taxes, so options for balancing the budget are limited. The state can dip into its roughly $800 million rainy day fund to help fill the hole and up-front money from slot machine licensing fees will go right into the treasury, Levy said. There may also be some pots of money that can be transferred to the general fund to mitigate the damage.

But even that won't be enough to stave off cuts to agencies and programs that rely on state aid.

Republicans argue that the listless national economy isn't solely to blame for the state's fiscal woes. Had their repeated calls in recent years for slower spending increases been heeded by Gov. Martin O'Malley and Democratic leaders, the state would be in better shape, they say.

"The whole session is probably going to be taken up by dealing with those decisions of mismanagement by the administration and the majority in the legislature," O'Donnell said.

But Democrats contend that the cold real-estate market and the national recession were a lethal combination that made the state's budget problems unavoidable.

Money woes notwithstanding, lawmakers are trying to keep a positive attitude that they can right the state's fiscal ship. "It's going to be a challenging time, but it's nothing that can't be accomplished in a workmanlike manner," Miller said.

Maryland may be in better position to weather the fiscal storm than other states because its proximity to the federal government provides stability in the workforce and the impending military base realignment will produce jobs and a stronger tax base.

And lawmakers are hopeful that a federal economic stimulus package will also present much-needed assistance. The big unknown is how quickly the economy recovers and how much larger the deficit grows.

For all the clamor surrounding the budget, there's no shortage of other issues on the docket for 2009. Lawmakers will want to make progress in areas such as criminal justice, energy, health care and the environment so they can tout some achievements when they return to their districts, rather than lament and defend undesirable cuts.

"The Chesapeake Bay is not doing well. The crab numbers are down and we cannot simply ignore that," Levy said. "It does not simply mean spending more money this year because that's not going to happen. We have to get smarter" in how we spend the $350 million already allocated to bay restoration. "Nobody wants the Chesapeake Bay to die on our watch."

Medevac helicopters will also be in the spotlight, as legislators look to reform the beleaguered system that had been under fire even before a September crash killed four people. Some lawmakers want to establish a new cabinet-level department to oversee the state's emergency operations, but the fiscal crunch appears likely to quash that proposal.

There will also be another attempt at repealing the death penalty, but its chances of passage remain dim in the Senate.

Locally, lawmakers said they will continue to fight for Southern Maryland's fair share of what little funding is available for transportation, school construction and other capital projects. Some have suggested shelving bond bills — upward of $25 million set aside for local projects, such as renovations at Tudor Hall in Leonardtown — in light of the fiscal crisis, even though it would barely make a dent in the deficit.

"One person's pork is another person's valuable program," Levy said. "They're good programs, but the house is burning down, the rooms are on fire."

It will be a session of tempered expectations and perhaps revisiting now-unaffordable policy initiatives, O'Donnell said. "I would think those things that save money will go to the top of the viability list and those policy decisions that cost money will probably quickly make their way to the round file."

abrody@somdnews.com