ANNAPOLIS – Republicans and Democrats agree, for now, that Maryland’s $153 million in newfound budget surplus should remain in the bank.
But this cooperation is likely to be short lived, with battles over the state’s surplus, which mushroomed to nearly $1 billion last week, expected by the time the General Assembly convenes in January.
“This is still a hold-your-breath and cross-your-fingers budget year,” said Senate Minority Leader Martin Madden, R-Howard.
Madden said legislators should wait and see how fiscal 2002 plays out and spend only where necessary. He and others in the Legislature want to avoid the kind of shortfalls plaguing other states. Virginia’s budget for fiscal 2001 is short $52 million, according to the National Conference of State Legislators. Sixteen other states are facing shortfalls this fiscal year.
“This is the same situation we faced 10 years ago when we were slow to notice the economic slump other states faced and proceeded to spend when we shouldn’t have,” said Madden.
Madden was referring to when then-Gov. William Donald Schaefer was forced to slash more than $500 million in funds from numerous government programs. Madden hopes legislators learned from their history.
The federal government is also feeling the pinch. The sluggish U.S. economy has reduced the projected federal budget surplus for fiscal year 2001, with the Congressional Budget Office projecting it as $122 billion less than May estimates.
Gov. Parris N. Glendening remains confident Maryland will withstand the domino effect of a national lackluster economy. Michelle Byrnie, Glendening’s spokeswoman, said because of investments in basic needs like education and employment, the state will pull through the troubled economic times.
“While it is time to be fiscally cautious, the surplus reduces the need for cutbacks,” she said.
By the time January rolls around, lawmakers will be eyeing the budget surplus for many projects. Probably the most significant and high-profile draw on the extra cash is the new prescription drug program for seniors, which began July 1. In its first two months, the program enrolled 20,000 patients and legislators expect the program to soon reach its maximum 30,000. Some legislators are considering expanding it beyond that.
Senate President Thomas V. Mike Miller Jr., D-Calvert, said programs like prescription drugs coupled with the state of the economy will force legislators to prioritize.
“We are very fortunate, unlike our sister states, to be in good economic standing, which also dictates we husband our resources very wisely in anticipation of any upcoming economic swings,” said Miller.
Sen. Barbara Hoffman, D-Baltimore, chairwoman of the Budget and Taxation Committee, also belongs to the fiscal conservative group. She urged caution in funding programs with a source of funds that could soon dry up. She said the current strategy of depositing surplus money in one-time investments is a good one.
The surplus, Hoffman said, is a throwback to last year and does not reflect current or future economic numbers. Hoffman said while there are numerous programs that could well use the money, making early suggestions about where the surplus should go would be ill advised.
“Some in the public think we have this money,” she said, “but they do not realize it might not be here next year.”