- The Washington Times - Friday, August 24, 2001

ANNAPOLIS The committee that sets Maryland's capital debt ceiling overrode the objections of Comptroller William Donald Schaefer this week and recommended that the state authorize up to $520 million in bonds next year.
Mr. Schaefer, a Democrat and former governor, had wanted to limit new bond authorizations to $490 million.
The state borrows money through bond sales for land purchases and construction projects.
The comptroller was attending a funeral and was not at the meeting. But in a letter to other committee members, Mr. Schaefer said actions taken over the past year "have made a farce out of the capital debt affordability process."
"The only way to restore credibility to the committee is through a recommendation of a capital debt limit of $490 million," Mr. Schaefer said in the letter.
His proposal was rejected by the other four committee members.
State Treasurer Richard Dixon, committee chairman, said Maryland has a manageable debt level and the increase proposed by the committee will not hurt the state's credit rating.
"Our state is in great shape because we continue to pay back debt at a much faster rate than other states," he said.
Maryland issues 15-year bonds, while many other states take 30 years to pay back debt, driving up the cost of borrowing money, Mr. Dixon said.
Maryland's ratio of debt to revenue also is good, the state treasurer said.
Standard & Poor's Corp. recommends that states limit debt to 8 percent of annual revenues, well above Maryland's 5.65 percent ratio of debt to revenues, Mr. Dixon said.
Mr. Schaefer's complaint centered on a decision made by the committee in March.
Following its recent tradition of increasing the debt limit by $15 million a year, the committee originally recommended a ceiling on new bond authorizations of $475 million.
But at the request of Gov. Parris N. Glendening, a Democrat, it agreed to add $30 million in bonds to guarantee that money would be available for payments to tobacco farmers who switch to other crops.
That took the ceiling up to $505 million, and by adding the usual $15 million for next year, the committee came up with the $520 million figure.
David Roose, director of the Bureau of Revenue Estimates in the comptroller's office, said Mr. Schaefer was promised in March that the committee would not consider the additional $30 million when setting the new ceiling.
"He's very concerned about the continual increase in spending. He's very concerned about the $45 million increase," Mr. Roose said.


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