Maryland cuts $300M from budget

Days after Virginia tries to close $2.5B gap

By Tom LoBianco (Contact) | Wednesday, October 15, 2008

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ANNAPOLIS -- Maryland officials this afternoon approved nearly $300 million in cuts to the state budget and warned about more cuts if the nation economy fails to improve by the time lawmakers return in December for the 2009 General Assembly session.

"It's hard to say how much more is to come," said Gov. Martin O'Malley who proposed the cuts, then voted in favor of them as part of the state's three-member Board of Public Works.

Mr. O'Malley, a Democrat, after the vote blamed much of the country's recent economic problems on "the failed policies of George W. Bush."

Mr. O'Malley with board members Treasurer Nancy K. Kopp and Comptroller Peter Franchot unanimously agreed to cut $85 million from healthcare spending, $16 million from higher education, postpone $20 million in spending for the proposed Inter-County Connector road and eliminated 833 vacant jobs across state government.

Mr. O'Malley declined to furlough state workers, as many counties and states facing similar problems have done, but did not rule out the option in the future.

Mr. Franchot, a frequent critic of Mr. O'Malley, said he supported the cuts but wanted to know how the O'Malley administration would handle ongoing problems and whether it would use budget estimates from the state's Department of Budget Management or from legislative analysts who have predicted far worse troubles.

State leaders learned last month they had to plug a $423 million hole in the current budget because of declining sales and income tax collections. The state is likely to face a $1 billion to $1.4 billion budget shortfall in the next budget.

The cuts come has neighboring Virginia and the District face a similar financial crisis.

Virginia Gov. Tim Kaine on Thursday ordered the layoffs of 567 employees and asked for permission to dip into the state's savings account to help close a $2.5 billion budget shortfall but limited cuts to education and the state police.

The moves come amid other budget-paring measures made necessary by falling tax revenues and a global financial crisis that further imperils the economy. Mrr. Kaine, Democrat said Virginia, which operates on a two-year budget cycle, is facing a $973.6 million shortfall for fiscal 2009 and a more than $1.5 billion deficit in 2010, but his cuts aimed to preserve core services in the state's $77 billion budget.

In the District, Mayor Adrian M. Fenty is proposing cuts for a city agencies to close a projected $131 million budget gap.

The biggest proposed cuts include $4 million from the police department, nearly $3 million from the health department and $2.6 million from the transportation department.

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