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Md. Board of Public Works to vote Wednesday on proposed budget cuts

October 14, 2008

ANNAPOLIS (AP) -- The Board of Public Works will be voting on about $300 million in state budget cuts recommended by Gov. Martin O'Malley, Comptroller Peter Franchot said Tuesday, noting he is inclined to support the reductions.

The comptroller also noted that state government cuts at Wednesday's board meeting are just "the tip of the iceberg." He predicted more cuts will be needed in December and in 2009, as the state wrestles to balance its books amid the nation's weakening finances.

Franchot, who serves on the board with O'Malley and Treasurer Nancy Kopp, said he has been briefed on the cuts, which closely reflect a list made public last week, except they will not include state government furloughs or cuts to extra areas where education is more expensive.

"Most of that that you saw in the newspaper is what's going to be proposed," Franchot said.

Franchot said the board also will take up about $100 million in fund transfers.

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The comptroller noted, however, that "the details are still, I think, a little bit in formation."

"But on the overall direction, I'm inclined to support the governor because it's imperative, and I'm just sending word out as the chief financial officer of the state that this is just the tip of the iceberg," Franchot told reporters.

O'Malley, who planned to brief lawmakers Tuesday afternoon, declined to discuss details of the cuts with reporters after meeting with school superintendents.

"It's going to cause some pain and discomfort all around," O'Malley said. "It's not because we want to do any of these things, but we must. We do not print money in state government."

Senate President Thomas V. Mike Miller said many people haven't felt the pain of state government budget cuts yet, despite previous rounds during O'Malley's administration. But he said that will change, and he pointed out that $300 million in cuts would be $50 million more than the budget secretary presented to him last week as being under consideration.

"That's a chunk of change ... People are going to feel some anguish," Miller said.

The board is acting to address about $423 million in lower-than-expected revenues for the fiscal year. Previous budget cuts have left the O'Malley administration and lawmakers with increasingly difficult choices on health, public safety and education.

O'Malley's budget office has been working from a list of cuts adding up to nearly $400 million.

For now, the governor has decided to put off six days of state government furloughs and a 50-percent reduction to this year's state installment to the Geographic Cost of Education Index, which helps areas in the state where education costs more.

But those could come later after discussions with school and labor officials. Together, those cuts add up to about $86 million.

The list of proposals included a 50 percent reduction to state health provider rate increases, which would save about $26.4 million. The University System of Maryland also would take a $30 million hit in a reduction of its annual grant and a transfer of surplus back to the state's general fund. The state's Sellinger Aid Program, which provides money to private colleges, would be cut by $8.4 million, a 15 percent reduction.

The Maryland State Police would freeze hiring of troopers, saving about $4.5 million, and 25 vacant positions would be eliminated. Also, 283 vacant correctional officer positions would be cut in the Department of Public Safety and Correctional Services, saving $2.9 million.

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