March 11, 2010

Budget leaders skeptical about GOP spending cuts

Print More

By Len Lazarick
Len@MarylandReporter.com

House budget chiefs reacted skeptically to Republican proposals to cut $800 million from next year’s budget at a work session Wednesday, asking GOP leaders for more specifics about how they would lay off 1,500 state and university workers.

Legislative analysts expressed strong doubts about the largest single item in the Republican plan — $195 million recovered from incorrect Medicaid payments.

“Achieving these kinds of results would be problematic,” said John Rohrer, coordinator of policy analysis for the Department of Legislative Services. The staff believes only about one-sixth of those savings could be achieved.

But House Minority Leader Tony O’Donnell held his ground, quoting from a Washington, D.C. consulting firm that maintained a complete audit of billions in health care claims could recover the level of money the GOP was hoping for.

“Your 6 percent number is much closer to reality than the 1 percent state number,” said Timothy Heitman, CEO of Recovery Audit Specialists, told the GOP caucus in an e-mail.

Del. Mary-Dulany James, D-Harford, chair of the subcommittee on health and human resources, said personnel cuts were easy to make on paper, but much harder to do as line items in budgets.

“It’s a complex thing to do,” James told O’Donnell. “It’s not that any of us don’t know how to cut the budget. What is the hard part is being specific,” cutting positions for social workers, nurses and correctional officers.

“We acknowledge the specifics are not there,” O’Donnell said, saying that would be left up to the governor.

O’Donnell said that in a meeting with Republican leaders last week, Democratic Gov. Martin O’Malley was particularly interested in pursuing the Medicaid savings, a point the governor confirmed with reporters last week.

O’Donnell noted that some studies have shown nationwide that 10 percent of Medicaid claims are paid improperly, and he doubted that Maryland was “90 percent more efficient than the rest of the country.”

“We think our numbers are sound,” O’Donnell said. “We’re talking about 100 percent top to bottom review of claims,” not the sampling of claims typically done in state audits.

O’Donnell emphasized that the GOP plan was “tough, tough medicine,” particularly the employee layoffs. “I don’t enjoy this,” he said. “I don’t like this.”

But “what we’re trying to avoid is more tax increases next year,” O’Donnell said.

The hearing in the House Appropriations Committee came just an hour after the comptroller’s office released official revenue estimates for next year that were essentially unchanged – but still much lower than the taxes Maryland had collected two years ago.

“Yes, we’re on line with a very low estimate,” Comptroller Peter Franchot told reporters. “It’s going to be bad for the foreseeable future. I don’t think government revenues are going to rebound.”

“Democrats should recognize we have a new paradigm,” said Franchot, a Democrat and a member of the House Appropriations Committee for 16 years.

But Appropriations subcommittee chairs were dubious that some of the GOP cuts could actually be made without doing real damage.

Del. John Bohanan, D-St. Mary’s, chair of the education subcommittee, doubted they could find $28 million in travel to cut from the universities that was not related to research grants. But he said his committee would consider the proposal to cut free tuition for university employees in half.