ANNAPOLIS – The 2002 Maryland General Assembly session promises to be more contentious than recent years with the budget, a smaller than usual pinata, hanging above anxious legislators waving their sticks and waiting to take their whacks when the session begins Jan. 9.
“The budget always seems to play the central role in the session,” said Sen. Christopher Van Hollen, D-Montgomery, vice-chairman of the Budget and Taxation Committee. “But this year even more than most.”
New budget estimates due out Thursday will only show the size of the problem — that there is a problem is certain.
Legislators will face falling revenues for the first time in at least 15 years, a phenomenon unseen even in the recession years of the early 1990s. Soaring security costs in the wake of the Sept. 11 terrorist attacks only compound the problem.
In October, Gov. Parris N. Glendening ordered initial measures aimed at reining in $205 million in state spending. Hiring was frozen throughout state agencies with the exception of security personnel, $65 million in capital projects were deferred and all agencies were told to cut 1.5 percent from their budgets.
Those measures, combined with use of the state’s reserves, still left a $770 million deficit for fiscal years 2002 and 2003, according to an October report by the Legislature’s fiscal analysts.
Even in surplus years, the budget owes its historical supremacy to one simple fact.
“Without money, you don’t have any programs,” said Sen. Barbara Hoffman, D-Baltimore, chairwoman of the Budget and Taxation Committee.
The stakes will be even higher this January when legislators try to control spending in an election year. A strong partisan tone could already be set by the redistricting debate that, by law, must precede any other matters.
Everyone is remaining tight-lipped about specifics of the next round of fiscal belt-tightening, deferring until after the release Thursday of the most recent data from the Board of Revenue Estimates. But a rough outline of the debate has started to appear.
Consensus reaches as far as the need to control spending and the fact that it will be difficult. It falls short of agreement on exactly where the ax will fall.
Some factions advocate using rainy day reserve funds. Others prefer discriminate trimming to across-the-board cuts. And still others want to delay the final phase of a scheduled tax cut or to hold up a pay raise for state employees, while most agree on bonding some capital projects to free up cash.
Republicans are leaping at the opportunity to say, “we told you so,” and oppose dipping into the rainy day fund.
“It’s time to pay the piper for past indiscretions,” said Senate Minority Leader J. Lowell Stoltzfus, R-Somerset, who argued that this year’s budget was unsustainable from the beginning.
The deficit will have to be made up through spending cuts, said Stoltzfus, who opposes delaying the last phase of an income tax cut or borrowing to cover a significant amount of the shortfall.
The session will be even tougher than those during the recession of the early 1990s, said Senate Minority Whip Larry Haines, R-Carroll.
Haines has the governor’s new office of Smart Growth in his sights, saying it can be handled under the Department of Planning.
Another target could be some environmental programs that, while important in the long run, do not have the immediate impact of others, said Delegate Martha Klima, R-Baltimore, an Appropriations Committee member.
“A 1.5 percent cut across-the-board is not the way to go,” she said. “Some of those cuts really hurt individuals like in the Department of Health and Mental Hygiene.”
Democrats are less specific when asked about plans to cut spending.
Legislators will have to use some of the reserves while maintaining the 5 percent mandated by state law, said Hoffman. Delaying the tax cut would be a last resort, she said, well behind funding some capital projects with bonds to free up cash for priorities like health and education.
Legislators agree that already under-funded health programs providing services to some of the most vulnerable Marylanders should be spared from cuts. Medicaid faces an estimated $173 million deficit and mental health is short $10.5 million.
The mental health system was on the verge of a crisis last spring until the state pledged an additional $30 million from a tax amnesty program. That program only netted $39 million rather than the $70 million projected, leaving another gap to fill.
The delay of a 4 percent salary increase for 35,000 state workers was mentioned as a possibility by some legislators, but Sue Esty, legislative director for the union representing state workers, said that she has heard nothing.
“The raise was negotiated through collective bargaining and only the governor could take action on that,” Esty said. “He would have to approach us and renegotiate . . . we’re not anticipating any surprises.”
But Esty is still wary of where cuts will be made in a tight budget year.
“Our fear is that, as has happened so often in the past, budget shortfalls will be borne on the backs of state employees.”
As in any fight there will be winners and losers, but with voters going to the polls in November, legislators want to make it as painless as possible.
“In an election year you’re going to ask all of these legislators to be altruists and I’m not sure that’s going to work,” said Hoffman. “But as the Budget Committee we’re going to try and hold the line.”