- The Washington Times - Tuesday, September 16, 2008

ANNAPOLIS | Some of the projects passed during a special General Assembly session last year could be among the first cut by state lawmakers dealing with a new, $1 billion budget shortfall.

State Sen. J. Lowell Stoltzfus, Eastern Shore Republican, said Monday that he’d like to see lawmakers scale back increased spending on education and health care.

Gov. Martin O’Malley, a Democrat, called the special session in fall 2007 to help close a $1.5 billion budget shortfall. State lawmakers then returned to Annapolis to pass a mix of new taxes and budget cuts. And Mr. O’Malley approved increased spending for higher education, local schools and health care.

Now, lawmakers are again looking at a slower economy and fewer taxes being collected as they prepare to return to Annapolis in January for the 2009 regular General Assembly session.

Mr. Stoltzfus, who has previously proposed curbing spending in lieu of increasing taxes, suggested that expanded spending might need to be put on hold for a while.

“Is there anything we can do to restrict those moneys?” he asked budget analysts at a Senate Budget and Taxation Committee meeting.

Mr. Stoltzfus estimated that deferring spending on the new programs - including expanded health care coverage, increased public school spending and a freeze for in-state college tuition - could save up to $278 million, or one quarter of the state’s projected deficit.

The legislature’s chief budget analyst, Warren Descheneaux, said health care funding comes from a special fund that would not directly fix the pending shortfall. However, because money is dedicated to one area does not mean it is locked in there, he said.

Mr. O’Malley also faces an immediate budget shortfall of about $432 million, requiring him to present at least $246 million in cuts to the Board of Public Works in the coming weeks.

Lawmakers have, at times, blamed the sagging national economy and the increased tax rates for the stanched flow of revenues into the state’s coffers.

The state’s personal income tax, sales tax and tobacco tax - all of which were increased during the special session - have performed poorly, contributing the most to the state’s budget problems.

Senate Budget and Taxation Committee Chairman Sen. Ulysses S. Currie, the subject of an ongoing federal investigation into his lobbying on behalf of a grocery chain, led the meeting Monday, despite repeated calls from state Republicans to resign his chairmanship.

He said that agencies at the state and local level would have to “feel the pain,” but declined to specify where he’d like to see cuts made.

“We’ve always said that we would like to be engaged with the governor in making these cuts,” said Mr. Currie, Prince George’s Democrat.

The state’s troubles are also compounded by an error made by the actuary who oversaw the state’s pension fund, resulting in $87.5 million that needs to be paid in next year’s budget, or paid out over 25 years at a cost of more than $220 million.

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