- The Washington Times - Tuesday, April 29, 2003

ANNAPOLIS Maryland Budget Secretary James C. “Chip” DiPaula Jr. has recommended enacting massive spending cuts now to soften the blow of a $1 billion shortfall next year, budget officials said yesterday.
   Unlike the mostly painless budget trimming and accounting gimmicks that recently helped erase a $2 billion gap in the state’s $22.4 billion budget, these midyear cuts are expected to noticeably reduce government services enjoyed by citizens.
   “The easy reductions have been taken, and now the cuts that are going to be put on the table are going to be very difficult,” said Deputy Budget Secretary Thomas Lee.
   Gov. Robert L. Ehrlich Jr., Republican, has said the most striking cuts will hit higher education, Medicaid and state aid to local governments. This could translate into reduced government services at the local level or higher local taxes.
   However, slashing $1 billion in spending during the next two years will also affect broader areas of the state government than the three pointed out by the governor.
   “The goal here is a leaner, more efficient government that is more responsive to working Marylanders,” said Ehrlich spokesman Henry Fawell. “We are breaking the Democrats’ spend-and-tax reign in Annapolis.”
   The Department of Budget and Management has begun a top-to-bottom review of every state agency and program to identify wasteful spending and areas for cuts, Mr. Lee said.
   He said the budget team is also working with Mr. Ehrlich’s Cabinet officers to identify each department’s core responsibilities or indispensable services. Everything considered an extra will be on the chopping block.
   “A lot of things are on the table,” said Mr. Lee, who declined to reveal any specific cuts being scrutinized. However, he said, “there is a menu.”
   He said the “doomsday list” of cuts circulated by Delegate Howard P. Rawlings, Baltimore Democrat and chairman of the House Appropriations Committee, provided a good indication of the types of cuts the Ehrlich administration will be forced to enact.
   The more than $1 billion in cuts offered by Mr. Rawlings included a slew of bold measures:
   Abolish 5,000 state jobs to save $200 million;
   Slash higher education by 22.5 percent to save $192 million;
   Reduce the aid formula for community colleges by 75 percent to save $114 million;
   Cancel the Maryland Children’s Health program to save $53 million;
   Cut Medicaid funding to nursing homes to save $35 million;
   End mental health coverage for people not eligible for Medicaid to save $33 million.
   Close the Maryland Correctional Institution in Jessup to save $24.3 million.
   Mr. Ehrlich has vowed to veto most tax increases, including $137 million in new corporate taxes approved by the Democrat-controlled General Assembly. His antitax stance coupled with the failure of his bid to legalize slot-machine gambling at horse tracks, which was killed in a House committee toward the end of the 90-day legislative session has left no alternative to deep cuts, the governor has said.
   His slots plan would have generated budget-balancing revenues of $700 million a year, all of it earmarked for public schools. Now the state faces a nearly $1 billion deficit next year, and $1.1 billion and $1.5 billion in deficits in subsequent years.
   Mr. Ehrlich is expected May 21 to make good on his promise to stave off higher taxes when he submits a list of vetoes that will include the $137 million corporate-tax bill.
   The veto will force Mr. Ehrlich to cut that amount from the budget before the fiscal year begins July 1. But the budget team isn’t worried about finding a quick $137 million to cut, Mr. Lee said.
   “We have a bigger task at hand, which is where to find $1 billion in cuts over two years,” he said, adding that the $137 million could be rolled into the first round of pre-emptive budget cuts.

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