Bad budget news has Md. workers begging for jobs

Wednesday, July 22, 2009

Faced with languishing state revenues that swallowed a $96 million cushion lawmakers built into the fiscal 2010 budget, O'Malley (D) will present about $300 million in reductions today for approval by the state's Board of Public Works, said Shaun Adamec, an O'Malley spokesman.

The panel – the governor, the comptroller and the treasurer – approves state spending and is authorized to slash the budget when the General Assembly is not in session.

Treasurer Nancy K. Kopp (D) said last week that she wasn't sure layoffs would be needed in this round of budget cuts.

"But the next step, I don't know how you do it without layoffs," she said.

A second round of cuts to the $13.8 billion budget will be presented at an unspecified date, Adamec said.

Cuts could have sweeping ramifications for correctional and public health facilities, foster care, juvenile services and other agencies, said Patrick Moran, director of the American Federation of State, County and Municipal Employees, which represents 26,000 Maryland state and higher education employees, including more than 10,000 who are members of the union.

"It affects thousands of working families, thousands of taxpayers here in the state of Maryland, and it affects employees who provide services we need," Moran said at a news conference last Thursday at AFSCME headquarters. He was flanked by state workers carrying "No Layoffs!" and "No Pay Cuts!" signs.

The demand for services "has exploded" during the economic recession, as workers in social services offices and state hospitals already are working nonvoluntary overtime to meet the demand, Moran said.

Workers say they also are taking on heavier caseloads while encountering increased violence in juvenile detention centers such as the Victor Cullen Center in Frederick County, where in May, 14 juveniles attacked staff members and cut a hole in a fence in order to escape before being quickly captured.

There is increased danger for workers who are putting in long hours, "because the state has not met its own standards of staffing levels," said Ed Shoemake, a resident adviser at the Department of Juvenile Service's Meadow Mountain Youth Center in Grantsville in Garrett County

O'Malley has been tight-lipped about what cuts he will put forward.

At the beginning of the fiscal year three weeks ago, O'Malley was considering cuts of about $200 million.

Since then, the state's revenue outlook has grown increasingly bleak, forcing deeper reductions.

The Maryland ledger is loaded with red ink.

For fiscal 2009, which ended June 30, revenues were down 5.7 percent — a $700 million shortfall — although another month's worth of collections is expected, Comptroller Peter V.R. Franchot said Thursday in a letter reporting June's revenues to O'Malley and the legislature's presiding officers. June revenues were 12 percent lower than the same month last year.

Individual income tax withholding and sales tax could make up most of fiscal 2009's gap, but any shortcoming would be added to the potential shortfall for fiscal 2010, which appears to be $700 million, said Joseph Shapiro, a Franchot spokesman.

Also, for the fiscal 2011 budget, which lawmakers will pass when they return to Annapolis in January, the gap appears to be $2 billion, Franchot said Thursday, in an hour-long online chat during which he fielded 16 questions.

The Sept. 17 meeting of the Board of Revenue Estimates will have a large write-down in revenues, Franchot (D) said.

All this, he said, is because of the economy.

"The national economic recession is still savaging our state economy and revenues," he said.

In October, the board made nearly $350 million in midyear cuts from the fiscal 2009 budget, including 833 jobs, most of which were vacant. But to this point O'Malley, aided by more than $3.9 billion in federal stimulus money, has avoided widespread layoffs.

State employees were forced to take two furlough days late last year and another two to three over the remainder of the fiscal year, depending on their pay level.

Now, furloughs are back on the table, and layoffs seem more likely.

"We're cutting in the bone at this point," Adamec said. "There's no more trimming the fat. These are painful cuts that will have an impact on everything the state does."

Moran called the forced time off without pay a "Band-Aid," saying AFSCME would prefer to see the state require combined reporting. The accounting change would require corporations to aggregate profit and expenses and then apportion the proper amount of tax to Maryland.

Even if approved, which would require legislation passed by the General Assembly, a recent estimate puts revenue from combined reporting at just $100 million.

A more immediate fix could come from putting "billions of dollars of privately provided services" — from snow removal to prison health care — back into the hands of state employees, Moran said.

Franchot refused to speculate on whether O'Malley would propose layoffs, but he did call for a moratorium on new taxes and an examination of how the state spends money.

"Maryland is not immune from the national recession, but business as usual is not sustainable," he said.