March 6, 2012

Doomsday budget spreads the pain to many programs

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By Len Lazarick
Len@MarylandReporter.com

There’s something for everybody to hate in the doomsday budget with $720 million in cuts previewed to Senate budgeters Tuesday.

Most of these are real cuts, not just reductions in future spending increases. School aid gets chopped $204 million. Local aid, already cut in previous years, is slashed $102 million, the bulk of it by totally eliminating of police aid and law enforcement grants. Library funding is sliced, too.

Money

Photo by Tracy Olson

Higher ed gets whacked $185 million by reducing state funds for all universities and community colleges by 10%. The doomsday plan says goodbye to all aid to private colleges, $38 million largely spent on financial aid to Maryland residents. The cherished legislative scholarships that senators and delegates can hand out to constituents are wiped out completely, saving $11 million.

Medicaid, already cut by $200 million in the governor’s proposed budget, takes another $100 million whack. Cuts would reduce outpatient hospital visits and reduce reimbursement to health providers who are already squeezed.

Gone are also smaller programs such as stem cell research ($12 million) and biotechnology tax credits ($8 million).

State employees lose raise, pay more for health care

State employees who had their pay cut by furloughs for three years until they got a one-time bonus of $750 this fiscal year would go another year without a promised 2% cost-of-living increase. They would also see their health insurance premiums go up, as would retirees.

“Welcome to Maryland,” said Warren Deschenaux, the legislature’s chief fiscal analyst, who prepared the list of cuts at the request of Senate leaders,.

The idea was to share the pain, since “the problem is everyone’s,” Deschenaux said. “The impact has been distributed as widely as possible.”

The reductions in the doomsday budget are options for what would happen if the Senate does not raise revenues. The focus for revenues is on an across-the-board income tax hike proposed by Sen. Roger Manno, D-Montgomery, repealing a 15-year-old tax cut that would add a quarter of a percent (.25%) to everyone’s tax return.

“This is going to be a daunting task to get 24 votes” for such a tax hike, Senate President Mike Miller told reporters. He initiated the doomsday scenario to show what would happen without a tax increase.

Majority of local cuts from PG, Montgomery and Baltimore

It was not lost on the senators that the bulk of the local cuts would impact three of the largest jurisdictions, with Prince George’s County taking the biggest hit ($77 million), followed by Baltimore City ($59 million) and Montgomery County ($51 million).

“It would be very difficult to balance the budget without going into local programs,” Deschenaux said.

Sen. Delores Kelley, D-Baltimore County, said the doomsday budget proposal “goes to the very heart of services to the poor.”

For their part, Republicans will not support a general tax hike, but they can support even a doomsday budget.

Republicans OK with cuts

“I think many of us can live with these,” said Senate Minority Leader E.J. Pipkin. “Enough is enough.”

With Pipkin, Sen. David Brinkley, R-Frederick, has proposed GOP alternative budgets in past years. He observed, “These [cuts] look pretty familiar. These were proposed in previous sessions.”

“We could go further if the votes are there,” Brinkley said.

Sen. Nancy King, D-Montgomery, said, “We cut the easy stuff years ago,” and “We’ve cut a lot of hard stuff. This is really what’s left.

“It would be a different world for public services in this state,” Deschenaux admitted. By doing just some of these proposed reductions, “you will continue to have a budget problem,” and again kick the can down the road.

“You would be well advised to eliminate the structural deficit and get on with the problems of the future,” Deschenaux advised.

  • Lots_O_Pain

    Wow, lots of pain, except for judges. They get a 14K raise. Unbelievable!

    • JusttheFactsLady

      Suppose that has anything to do with Mrs O’Malley being a judge???

  • It’s a start…

  • Trent Kittleman

    It is often hard to get a
    complete picture of state government spending. For example, one paragraph above
    notes that “State employees lose pay raise, pay more for health
    care.” We all generally assume that the term “state employees” means
    everyone except the at-will political appointees.

    Not so. For example, the
    majority (77%) of the transit (MTA) employees are unionized. And in her
    December 2010 report to the Legislature, MDOT Secretary, Beverly Swaim-Staley
    explained that the 2,500 union employees were recently awarded wage increases
    totaling 11% and pension benefit increases of 40% over the next three years.

    That’s just one example of state
    employees who are not included when the government says it will freeze or cap
    salaries. It may be that there are legitimate reasons for this disparities
    (other than political). But it is getting harder and harder for most of us
    voters to glean any real concept of how the state government spends our money
    because of the excruciating complexity of “state government” and the
    arcane process of its budgeting and appropriating. Not to mention the cardinal
    rule of elected officials that is only shared in Annapolis among friends, with
    a wink and a nod: “Those that have the votes make the rules.”

  • Brichbourg

    Finally, a hint of fiscal sanity!  However, I am not confident that the legislature has the intestinal fortitude to pass these budget cuts although they are much needed. Its always easier to punt!

  • abby_adams

    Reality bites. Had the legislature done its fiduciary duty over the past few years & actually trimmed the state budget this “doomsday” version would be unnecessary. Instead the state budget has increased yearly (11% last session) while moving $$ around on paper. Maybe the legislature should check with the Comptroller’s office concerning tax collection receipts before demanding even more regressive taxes be placed on the backs of taxpayers. Given the departments & political constituencies taking a hit, one can already see the headlines depicting anyone who agrees to cut back as mean spirited for not funding the progressive Democrats line.  

  • Gee I don’t know…maybe they could start with the people employed at University of Maryland.  There are over 5,100 individuals there who make over $100,000 a year, over half of them twice that amount.  If just one of us in my household brought home that much I’d be able to sleep at night instead of worrying that we both will have to work until the age of 80.  You see we have to rebuild our retirement thanks to the pillage and plunder of the bailed out banks on all our 401ks not to mention the ever increasing amount of our money that the State of Maryland takes.

  • Skip L

    I notice that the judges won’t be “sharing the pain”!

    • millsmd

      Why should they? They’re better than everyone else.

  • Mrmdleather

    I agree with Pat Robertson, legalize marajuana AND TAX IT!