A “doomsday” Maryland budget describing how to fund next year?s state spending without tax hikes includes substantial cuts in local aid for education, a salary freeze for state employees and cuts in drug benefits for retirees, legislative analysts told lawmakers Tuesday.
The House speaker and Senate president requested the budget proposal as a starting point for discussions about how to cope with a likely $1.4 billion deficit. But it already produced anger and cries of pain among legislators from competing jurisdictions, who worried about its impact on children and health care.
(Click here to read the report, “Balancing the Budget Without New Revenues.”)
The possible cuts in local aid also fly in the face of Gov. Martin O?Malley?s pledge to local and county officials this week that he would try to protect local aid in the coming budget crunch.
House Majority Leader Kumar Barve, a Democrat representing Montgomery County, which could face the biggest aid cut of $155 million, said, “It is clear that nobody can be held harmless” as the state looks to balance its budget. “I think it?s impossibleto make a commitment like” preventing reductions in local aid.
The salary freeze for state workers, cutting $62 million, is “a net loss for state employees,” said AFSCME Union Executive Director Sue Esty, since they are facing increased health insurance costs. Retirees also would lose state coverage of Medicare Part D prescription drug benefits, a potential savings of $184 million.
Other possible cuts to avoid a tax increase include: reducing aid for community agencies, cutting payments to nursing homes and home health and mental health services ($30 million), eliminating state aid to private colleges and universities ($64 million), reducing aid for stem cell research, cutting commissions to lottery agents, and paying for the operation of state parks out of Open Space Funds.
About 40 percent of the $1.4 billion would come by reducing local aid by $646 million, with the bulk of that coming in sharing the costs of teacher retirement with the counties ($324 million) and paring back Thornton aid to public education ($157 million).
Warren Deschenaux, fiscal chief to the legislature?s nonpartisan staff, said counties have been running substantial budget surpluses at the same time they were cutting their property tax rates. The proposed cuts to local aid could be made up by an average 9-cent increase in local property taxes.
“This is very frightening,” said Del. Melvin Stukes, D-Baltimore City. “There is no way that services are not going to be cut.”
