Predicted deficit to require tough cuts

ANNAPOLIS — Maryland budget analysts yesterday forecast a $1.3 billion deficit next year, prompting legislators to warn of spending cuts at least in the next year.

Warren Deschenaux, the state’s chief budget analyst, told state legislators that projections show the state with a $489 million deficit in fiscal 2007, which started July 1, and a $1.3 billion deficit in fiscal 2008.

“These deficits will never happen because they can’t,” he said. “The question is how they don’t.”

Senate President Thomas V. Mike Miller Jr. said the forecast means Gov.-elect Martin O’Malley faces a difficult task.

“He’s going to have a tough time,” said Mr. Miller, Prince George’s Democrat. “It’s going to be a very challenging first year for Governor O’Malley.”

Mr. Miller said Mr. O’Malley cannot cut funding for schools or land preservation because he made promises to teachers unions and environmental groups that endorsed him.

However, a spokesman for Mr. O’Malley, Baltimore’s Democratic mayor, said all spending is subject to trimming.

“Structural deficits require structural reform,” said spokesman Steve Kearney. “Clearly, we are going to have to look at everything to close this budget gap. We are required to look at everything, and we will do so.”

Mr. Miller said he doesn’t anticipate proposals for tax increases in the first year, especially from Mr. O’Malley and other newly elected state officials.

A spokesman for Gov. Robert L. Ehrlich Jr., Republican, reiterated the governor’s claim that he inherited a $4 billion deficit from former Gov. Parris N. Glendening, Democrat, and turned it into a $2.5 billion surplus without raising sales or income taxes.

The surplus, however, represents cash on hand, and even with that, spending is scheduled to outpace revenues.

The projected budget shortfall intensifies talk of slots legislation passing this year.

“We need the revenues,” said Mr. Miller, who supported Mr. Ehrlich’s unsuccessful attempts to pass slots legislation.

Mr. Ehrlich made slots one of his signature issues in his first three years in office, but was defeated by House Speaker Michael E. Busch, Anne Arundel Democrat.

Mr. O’Malley said during his campaign that he was in favor of limited slots at racetracks but did not make it a prominent part of his platform.

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