Delegation Republicans say O'Malley budget falls short

January 29, 2011|By ANDREW SCHOTZ |
  • Myers

ANNAPOLIS — Some members of the Washington County delegation to the Maryland General Assembly think Gov. Martin O'Malley is playing "kick the can down the road" with his proposed fiscal year 2012 budget.

The "kick the can" metaphor, a popular catchphrase for Republicans, refers to putting off a tough choice.

In this case, the difficulty is how to close a state budget gap the governor's office estimates to be $1.35 billion. The state Department of Legislative Services previously estimated the deficit at $1.6 billion.

O'Malley, a Democrat, has called for about $950 million in cuts, including $446 million to state agencies and $52 million in local aid, according to a summary his office distributed.

Still, the proposed overall budget is $34 billion, up from $32 billion in the current fiscal year.

Del. LeRoy E. Myers Jr., R-Washington/Allegany, wondered how O'Malley can claim to have cut nearly $1 billion, yet have a budget plan that's higher than this year's.

"That to me is not a cut," Myers said.

He and other delegation Republicans said the governor appears to be passing the buck.

"I think the legislature was handed this budget to do the dirty work," Myers said.

"That's disappointing, to see that we're actually increasing spending in the state at this time when we really need to crunch and become more fiscally responsible," said Del. Neil C. Parrott, R-Washington.

The delegation's two Democrats were less critical.

Sen. Ronald N. Young, D-Frederick/Washington, said the governor seems to be taking the right approach with his cuts.

"People don't want more taxes," he said. "You've got to make cuts. He's tried to protect education, which is the one very spelled-out, definite responsibility the state has. It hurts — of course it hurts."

Young said he expects that the governor will propose further cuts and that the legislature also will slice into the budget.

"There probably will be a few movements to increase a tax or two, but I don't think there's a big appetite for that," he said.

Del. John P. Donoghue, D-Washington, called the proposed cuts "a little painful."

But, "at first glance, it's not as bad we thought it would be," he said. "I'm hoping the numbers I see as a financial adviser will continue to improve."

Donoghue said there will be a "long discussion" as the legislature further shapes the budget during the next two months. "It's always a starting point when the governor drops his budget and it's very premature to criticize anyone," he said.

Sen. George C. Edwards, R-Garrett/Allegany/Washington, will be examining the spending proposal closely on the Senate Budget and Taxation Committee.

He said the governor has moved funds around, rather than making significant cuts.

"They're still using a lot of bonds to backfill," he said. "They're going to take money out of some programs like they did last year and put it in the operating budget to fill holes that they spent federal money in, stimulus money, which we don't have anymore."

Sen. Christopher B. Shank, R-Washington, said he hoped for a more meaningful proposal for reducing the deficit.

Del. Andrew A. Serafini, R-Washington, noted that a chart circulated by Del. Norman H. Conway, the Appropriations Committee chairman, shows the structural budget deficit still would be about $1.2 billion under O'Malley's budget plan. The chart puts the current structural deficit at $1.6 billion.

"It's anywhere between a 1.3 and a 1.6 billion-dollar deficit and it's only 'cutting' 950 — it's not even cutting — 950 million (dollars)," Del. Michael J. Hough, R-Frederick/Washington, said. "It's really just one-time transfers for a lot of it. So, it's taking money again from the transportation trust fund, not giving local governments their money, taking money from the Chesapeake Bay restoration fund. These government-dedicated revenues (are) all going into the general fund, again.

"So, it doesn't do anything really to solve the long-term structural deficit. There's no real cuts. It's expanded spending."

Parrott said he noticed that the governor is again putting money toward embryonic stem-cell research. If the state wants to fund stem-cell research, it should only involve adult stem cells, he said.

The proposed budget eliminates furloughs for state workers, a cost-cutting measure for three straight years.

Employees have until Monday to vote on a tentative contract giving them a $750 bonus this year, a 2 percent raise in 2013 and a 3 percent raise in 2014, as well as a step increase in 2014.

"I'm very pleased that furloughs are not in the budget," Shank said. "I've always felt that furloughs should be a temporary emergency measure and I thought three years of furloughs was too long."

"One thing I really appreciated was that there's no furloughs taking place in this budget," Parrott said. "I think it's very important. They've really taken it on the chin for the last three or four years here."

Last year, when Shank was House minority whip, the chamber's Republican caucus proposed its own budget plan, with deeper cuts than O'Malley's.

This year, Senate Republicans might do the same.

"It's under discussion," Shank said.

The governor's plan also would help shrink an estimated $35 billion in unfunded liabilities to retirees.

Teachers and state employees would have to increase their contribution to the retirement system from 5 percent to 7 percent to continue receiving their current level of benefits.

The early-retirement age would increase from 55 to 60.

Current retirees would not be affected.

As of June 2010, the state's pension system was funded at about 64 percent. O'Malley is projecting with his proposal that the pension system would be funded at 80 percent, considered a healthy level, by fiscal year 2023.

"It is a reasonable first step, but it still does not fix the structural problem," said Serafini, who has made pension reform one of his top issues. "And it still is dependent upon a lot of factors that I think are suspect," such as depending on a 7.75 percent return on investments.

"I don't believe that this really gets to the core of the problem," he said.

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