Slots or no slots, leaders of Maryland’s counties are preparing for a financial hit when state lawmakers reconvene for the 2009 General Assembly.
“It’s like deja vu all over again,” said David Bliden, executive director of the Maryland Association of Counties (MACo), which held its annual conference in the resort town last week. “We though the dark clouds of the structural deficit had parted.”
Though leaders in the state’s 23 counties and Baltimore city found plenty to talk about - from education to public safety - their discussions always seemed to find their way back to the state’s continuing budget crisis.
State lawmakers gathered for a lengthy special session last year to close the state’s structural budget deficit, taking unpopular votes on tax increases and legalizing gambling but did not completely close the $1.5 billion budget hole.
National economic problems are slowly stretching the state’s ongoing budget hole, estimated to be close to $200 million in the current budget and spurring county leaders to wonder whether they’ll be targeted in January when state lawmakers weigh next year’s budget.
“We all have to be more frugal,” said Jim Stakem, president of the Allegany County Board of Commissioners.
Mr. Stakem, a Democrat who oversees his county’s $70 million operating budget, and many other county leaders across the state are supporting Gov. Martin O’Malley‘s plan to legalize slot machines. The O’Malley plan would bring roughly $600 million to $700 million to the state.
Mr. O’Malley, a Democrat, thanked county leaders for their political support, saying it helped him get most of his budget plan through the assembly during the special session. State lawmakers “would not have been able to do those things had you not been backing them up,” he said during his keynote address at the MACo conference Saturday.
But Mr. O’Malley and state lawmakers never completely fixed the state’s structural deficit, leaving an ongoing gap that could reach close to $1 billion by 2013.
State budget analysts told lawmakers last month that they may have to cut an additional $200 million from the budget they completed in April.
Senate leaders have floated the idea of passing all of the teacher pension costs onto the counties. Currently, the state pays half of the costs. The specter of that additional burden, plus the possibility of more cuts to education spending have spurred MACo to get behind Mr. O’Malley’s slots plan.
“A world without slots would translate to significant new burden for the counties,” Mr. Bliden said.
The state’s budget problems have persisted since former Gov. Parris N. Glendening, a Democrat, cut the state income tax and increased spending on education by more than $1.3 billion a year. The three-week special session in November resulted in $1.4 billion in new taxes, more than $300 million in mandated budget cuts - largely to education aid to the counties - and a constitutional amendment to put 15,000 slot machines across the state.
“We left last year having made a lot of tough decisions,” said House Speaker Michael E. Busch, Anne Arundel Democrat, who has chastised county leaders for benefiting from the state’s education spending without having to raise taxes themselves.