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Local governments face possible state fund cuts

November 17, 2006

The Maryland General Assembly's fiscal advisors gave Governor-elect Martin O'Malley some good news and bad news this week.

The good news is that because outgoing Gov. Robert Ehrlich left the state with $1.6 billion in cash reserves, the legislature won't have to do anything drastic in 2007.

And the bad news? The state's structural deficit - the projected gap between revenues and expenses over the next four years - has increased from $4 billion to $5.8 billion.

On Wednesday, Senate President Thomas V. Mike Miller told The Associated Press that 2007 will be "a very challenging year for Governor O'Malley."

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During his campaign, O'Malley didn't rule out tax increases, but Miller said he didn't see any tax increases in the immediate future.

Instead, Miller said, "I see belt-tightening."

And where might the belt be tightened? Aid to local governments, Miller said, adding that the legislature cannot afford "a 19 percent increase in aid to local governments every year."

If this sounds familiar, it is. First the state enacts a new program, such as the Thornton Commission's proposals to increase aid to education.

Then, when the financial storm clouds begin to gather, local governments are told they will have to absorb much of the cost of the program that state officials told them was essential.

If state aid is reduced, at a time when Washington County needs some new schools and renovation money for some of the older ones, it will force local officials to make some tough decisions.

In 2003, the local Board of Education proposed issuing $25 million in bonds to fund school construction. The county commissioners rejected that, but the new county board may have to give the idea another look.

For its part, the School Board might also have to look at programs and decide what is essential, versus nonessentials that would be nice to have.

If all of this talk of belt-tightening sounds hypocritical coming from the same leaders who were happy to go along with Gov. Parris Glendening's spend-today-and-worry-about it-tomorrow philosophy, it is.

But these are the leaders the state's voters have chosen. And it begins to look as if in 2007, the Washington County delegation's job won't be bringing home the bacon, but keeping Miller and company from taking away what the county already has.

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