- The Washington Times - Thursday, March 13, 2008

ANNAPOLIS (AP) — The Maryland Senate yesterday gave preliminary approval to a state budget with about $315 million in budget cuts and spending transfers.

The reductions were aimed at catching up with a $333 million drop in revenue estimates reported last week, due largely to a slowdown in individual income tax receipts and sales tax revenue.

“We knew it was coming, and we were ready,” said Sen. Ulysses Currie, Prince George’s Democrat who chairs the Senate Budget and Taxation Committee.

The Senate’s budget bill leaves a balance of nearly $900 million, including the balance in the Rainy Day Fund.

About $226 million in cuts come from the state’s fiscal 2009 general fund, which is made up mostly of income and sales taxes; about half of the state’s expenditures are made from it.

As part of the spending reductions, the Senate is moving ahead with slashing a proposed $50 million fund for the Chesapeake Bay to $25 million — to the chagrin of environmentalists who had hoped that lawmakers would follow through with the full amount proposed in November’s special session of the General Assembly.

The Senate budget bill also cuts $18 million from stem-cell research, leaving $5 million for fiscal 2009. Sen. Edward J. Kasemeyer, Baltimore County Democrat, said the state has given $38 million to stem-cell programs, and there’s a balance of $23 million, with no money needed for the contracts that have been awarded, he said.

“There’s enough money there already,” Mr. Kasemeyer said.

The budget also delays a health care measure passed during November’s special session. As a result, the implementation of Medicaid expansion to parents will be delayed by six months, meaning that it won’t take effect until Jan. 1. It also scales back the small-business subsidy program under the health measure. The two changes net about $24 million in savings.

Senators also moved ahead with limiting the increase in support for the University System of Maryland to 4 percent per student, a $6.8 million cut that could make it harder to freeze tuition as Gov. Martin O’Malley, a Democrat, wants. The measure reduces general fund expenditures by about $15 million to the system by using the Higher Education Investment Fund.

The Senate also signed off on a $20 million general fund reduction for inpatient hospital costs, in recognition of lower-than-anticipated utilization rates.

Lawmakers found another $32 million by modifying the financing of the Intercounty Connector, an 18-mile highway through Maryland’s D.C. suburbs. Sen. James E. DeGrange Sr., Anne Arundel Democrat, said the change won’t effect the timeline for the project.

Senators also approved an amendment to the budget that would provide for a 3 percent cost-of-living adjustment increase to community medical care providers, instead of a 1.5 percent increase. The $13 million is expected to come from the lottery, if excess attainment goes above $497 million.

“We believe it’ll happen,” Mr. Kasemeyer said.

The Senate, which is acting on the budget first this year, is expected to take a final vote tomorrow on the budget. The House has also started its work on the governor’s budget.

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