- The Washington Times - Saturday, April 11, 2009

ANNAPOLIS | A panel of Maryland lawmakers decided to fill a huge financial hole Friday by using bonds instead of cash to buy public land, capping a wild budget-balancing roller-coaster ride with a steep revenue drop and an unprecedented lift from the federal government.

The budget conference committee finished working out differences in budget legislation approved by the House and Senate on Friday.

“I think this was probably the toughest budget year that I’ve ever seen and was only made manageable as a result of the recovery act,” said Delegate Mary-Dulany James, Harford Democrat, who was a member of the conference committee. “Next year, we’ll have an equally tough challenge.”

A key piece of the budget puzzle involves using about $180 million from the state’s Program Open Space, which uses part of the state’s real estate transfer tax to buy public land. About $140 million in cash will be replaced with bonds, while about $40 million in fiscal 2010 revenue from the program will flow through to the state’s general fund.

The budget legislation and a companion budget-reconciliation measure still must receive final approval from the full House and Senate before Monday’s adjournment.

The decision on open space means the state will take on debt to buy land, but supporters of the idea think it will be a good investment in the long run, especially since real estate prices are low now. Also, the decision frees up general-fund money for other parts of the budget that can’t be paid for with bonds.

Delegate Susan L.M. Aumann, who also was on the conference committee, described the budget work as “a very painful process.”

“This thing has been really reviewed,” said Mrs. Aumann, Baltimore County Republican. “Every rock has been turned over.”

Overall, hundreds of millions of dollars have been cut or shifted around in spending transfers to balance the state’s $13.8 billion operating budget.

The committee’s work will leave a budget cushion of about $100 million to help cover future revenue declines that appear certain.

The $100 million balance was a struggle to reach, and the number acted as a sort of beacon when the lawmakers who gathered around a conference table seemed reluctant to take a specific action. The figure also underscores the difficulty lawmakers had in balancing the state’s books, because legislative leaders had talked about aiming for at least a $200 to $250 million cushion in January to put the state on better financial footing, in case revenues continue to crumble.

The state also is maintaining the 5 percent balance in its Rainy Day Fund, which is more than $650 million.

The budget includes significant cuts in assistance to local governments. Earlier this week, the panel agreed to cut $162 million in local road maintenance — one of the largest reductions in the budget.

The committee opted to cut $3 million in stem cell research, leaving $15.4 million and rejecting the Senate’s position to cut the entire $18.4 million. A $2 million cut in a tax credit for people who invest in biotechnology was rejected, leaving $6 million for the credit.

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