BALTIMORE – Lt. Gov. Kathleen Kennedy Townsend, Democratic gubernatorial candidate, released her budget plan for Maryland Thursday, and her concept for fiscal management is 180 degrees different from her opponent.
About the only thing both candidates agree on is they won’t raise any taxes, although Townsend makes an exception for tobacco levies.
Townsend detailed a plan for reallocating funds and tax revenue to the state’s general fund, including $47 million from the transfer tax. Such changes could bring $300 million to the fund in 2004, she said.
“I’m here to talk about a real budget and not a paper napkin plan,” Townsend said at a news conference at Baltimore’s Wyndham Hotel.
Her Republican opponent, U.S. Rep. Robert Ehrlich, released his budget framework Sept. 19, which he predicted would bring in $385 million in new revenue.
“The state is embroiled in one of the worst fiscal crises in its history,” Ehrlich said at the time. “The blame for this intolerable situation rests squarely on the steps of Maryland’s State House.”
Maryland’s economic status, Townsend said, is not as bad as Ehrlich has stated. The state has seen worse times, such as the recession in the early 1990s.
The latest budget figures project Maryland will close with a more than $400 million deficit this fiscal year, and fall more than $1.3 billion short in the next fiscal year.
The two candidates’ budgets diverge on several key issues affecting Maryland:
* Slot machines in gambling venues – Ehrlich proposes that slot machines be placed in three Maryland race tracks, creating $380 million in revenue in the 2004 fiscal year. The proposal predicts an eventual $800 million in annual revenue from the machines.
Townsend’s plan warns of long-term problems from slots, such as losses to small businesses, increased gambling addiction and an increase in crime. She also called the proposal unrealistic because the General Assembly would not pass legislation for the slot machines or send the issue to voters.
* Education – Ehrlich’s plan does not specify funding for education, but earmarks the predicted new revenue, mainly from his gambling initiative, would be put toward education.
Townsend’s plan calls for maintaining or increasing current levels of kindergarten-through-12th-grade funding. However, she’ll cut the growth in higher education funding, which she estimated to be about $12 million.
* Governor’s luxury items – Ehrlich said he would sell the state’s King Air nine-passenger jet, the state’s 100-foot yacht and the luxury boxes in Camden Yards and Ravens Stadium, for an estimated $5 million in additional revenue.
Townsend said the plane is leased and the luxury boxes are provided to the state as part of the teams’ leasing deals, therefore they can’t be sold. She did not mention the yacht.
* Savings plans – Ehrlich wants state agencies to study ways to run more efficiently to realize expected savings of 1 percent overall.
Townsend’s plan criticizes that claim, saying it would generate only $106 million in savings for the 2003 fiscal year, in which the projected budget gap is $414 million. Townsend proposes, instead, that the state trim the use of consultants, utility bills and telecommunications costs to close the gap.
For the 2004 fiscal year, Ehrlich proposes a similar plan to that 2003 savings proposal, except with predicted savings of 4 percent.
Townsend’s plan for 2004 is to cut even more from the budget without sacrificing education and public safety funding.
* State employees – Ehrlich’s proposal calls for replacing only half of state employees who retire each year and cutting the governor and lieutenant governor’s staff by 14 employees for an estimated $67 million total.
Townsend wants to maintain the hiring freeze begun in October 2001 and intensified by Gov. Parris N. Glendening this week. She said the Ehrlich plan for a half-freeze would only decrease savings. – 30 – CNS-9-26-02