ANNAPOLIS – Lawmakers are complaining Gov. Parris N. Glendening has left all the tough budget-cutting decisions to them, including how to close a huge budget gap after he leaves office.
Members of the Senate Budget and Taxation Committee and House Appropriations Committee took their first detailed look at Glendening’s 2003 operating budget Monday night.
The budget would leave a nearly $1 billion budget deficit for 2004 under current spending measures, fiscal analysts told lawmakers.
That deficit would require a dramatic increase in revenues to balance the budget in 2004, said Warren Deschenaux from the Office of Policy Analysis.
Although an economic turnaround is expected during the next fiscal year, analysts warned that the recovery would be lukewarm and likely would not provide the needed revenue to close the budget gap.
Glendening left the difficult task of making cuts to the General Assembly, said Senate Budget and Taxation Committee Chairman Barbara Hoffman, D-Baltimore.
“We cannot build a budget on wishful thinking because we hope to come back (after re-election) and not in May” for a special session, she said.
Since the governor cannot run again this fall, he can “gamble” with the economy, she said.
Glendening balanced the 2003 budget by postponing mandated spending, including delaying the last 2 percent of a total 10 percent income tax break, and taking money from unspent program funds and reserve accounts, fiscal analysts said.
The one-time fixes to shore up the 2003 budget would leave the same $1 billion gap between spending and revenue for the 2004 budget and almost no reserve funds to draw on, Deschenaux said.
“Presumably we are all convinced now that, yes, we did hit an iceberg and the ship is actually sinking,” said House Minority Whip Robert Flanagan, R- Howard. He said some programs would need to be cut entirely to fully fund others.
Lawmakers have remained adamant that the tax cut must be implemented, which means they will have to find $175 million elsewhere.
Restoring the promised income tax relief may be difficult, said Deschenaux, because budget forecasts show no room for it for several years.
Glendening rebutted criticism of his budget Tuesday, saying that Deschenaux makes “doom and gloom” budget forecasts even though the governor manages to control expenditures enough each year to balance the budget.
Besides the tax cut, the governor’s budget also makes use of postponing payments and transferring unspent funds to keep the state in the black, according to analysts.
A hiring freeze instituted late last year also helped, they said.
Most of the budget’s salary line decreases were in line with attrition rates. However, analysts said some agencies would need to find alternative revenue sources or lay off employees since their salary cuts were higher than their vacancies.
Those budget areas under threat of layoffs are: legislative, financial and revenue administration, retirement, human resources, higher education, housing and community development, business and economic development.
Another potential problem is Medicaid. Analysts said Glendening’s $367 million increase in Medicaid spending underestimated actual enrollment needs and growth in medical costs by $100 million.
And reductions in state pension plan payments would move at least $65 million in make-up payments to next year.
Glendening tapped the state’s $500 million rainy day fund to balance the budget as well as:
— $50 million from a welfare emergency reserve fund. Analysts said $1 million would remain. — $32 million from the injured workers’ insurance reserve. — $18 million from Maryland Transportation Authority revenues. — $5 million in monies set aside for the Emergency Medical System to offset future program costs. — $70 million from the Maryland Automobile Insurance fund. — $5 million from the 911 Emergency Number fund.