- The Washington Times - Friday, July 6, 2007

ANNAPOLIS — Gov. Martin O'Malley is telling residents to either support tax increases or prepare for deep cuts in state funding to their local governments.

“With the cuts-only option, everybody’s going to feel it, and every county government and every municipal government will feel it,” Mr. O'Malley, a Democrat, told reporters this week.

His statement comes a week after telling Eastern Shore residents that he did not want to balance the state budget on the backs of localities.

Time is running out before Mr. O'Malley must submit his next budget in January, which has to address the state’s pending $1.5 billion deficit.

Mr. O'Malley is expected to announce $200 million in cuts to the state budget at the Board of Public Works meeting next week and has said more cuts are likely, although he continues to caution against the cuts-only approach.

Mr. O'Malley also said that he might not know by next week where he will make all of the $200 million in cuts and that more could be expected.

“We’re not there yet,” he said earlier this week. “We really haven’t gotten to the revenue side of the ledger.”

State budget analysts last week presented lawmakers with a sample “doomsday” budget with $1.5 billion in cuts and no new or increased taxes.

Local aid, which accounts for 40 percent of the state’s $30 billion budget, was cut dramatically in the sample budget.

The governor and state lawmakers will continue to juggle numbers and scenarios until they can agree upon how and when to close the deficit.

House Speaker Michael E. Busch said that if state leaders cannot agree to a special General Assembly session, Mr. O'Malley must present one budget with deep cuts and another based on tax increases that would have to be approved separately by the lawmakers.

Mr. Busch, Anne Arundel Democrat, joined other budget leaders in criticizing Mr. O'Malley last week for saying local budget cuts was not an option.

He opposes legalizing slot machines and says a special session is not necessary. However, Senate President Thomas V. Mike Miller Jr, Southern Maryland Democrat, has pushed for lawmakers to return to Annapolis to close the budget deficit and legalize slot machines.

Mr. O’Malley, who supports legalizing slot machines, has said he won’t call for a special session without consensus between Mr. Busch and Mr. Miller.

Maryland budget experts say Maryland’s fiscal crisis will hit residents hard, whether its cuts, tax increases or a combination.

“You’re hitting the citizens no matter how you do it,” said former Senate Budget and Taxation Chairwoman Barbara A. Hoffman, a Baltimore Democrat.

Mrs. Hoffman said the solution will rest on balancing cuts, revenues and the private requests of state leaders.

“Part of this is the art of the possible as well,” she said yesterday.

Republican leaders said they were pleased to learn Mr. O'Malley had reconsidered budget cutting to help balance the budget.

“Everybody who benefits from eating at the table needs to be prepared to help clear the table,” said Senate Minority Leader David R. Brinkley, Frederick Republican. “I’m glad [Mr. O'Malley] has made an about face. And we’re prepared to work with him to bring some sanity to the state’s fiscal process.”

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