Will The General Assembly Approve "Doomsday" Budget?

Faced with seemingly intractable budget problems and having little appetite for tax increases, lawmakers in Annapolis are preparing a doomsday budget. WYPR’s Joel McCord reports.

Senate President Mike Miller said yesterday lawmakers are preparing a budget package that cuts some 500 million dollars from Governor Martin O’Malley’s original 35 billion dollar spending plan.

“Show them what that means to the counties and to the teachers. If we add the pensions in there, that’s going to be $739 in cuts.”

He meant seven hundred thirty-nine million, by the way. Miller said they will give lawmakers a choice between those cuts and various tax increases.

“ If we can’t get 24 votes for revenues and a coalition of things, maintenance of effort, pension reform, revenues as well as cuts, then the cuts are going to go in place and we’re going to send the bill over to the House with nothing but cuts.”

O’Malley’s budget includes limits on personal exemptions and caps on personal deductions for individuals earning more than 100-thousand dollars and couples that make more than 150-thousand dollars. It also extends the state sales tax to some internet purchases in an effort to cover part of the state’s one-billion dollar shortfall in the next budget year.

Senator Ed DeGrange, a Glen Burnie Democrat who sits on the budget committee, said the income tax provisions have presented a particular problem for lawmakers.

“We’re getting a lot of push back, particularly on the mortgage piece, deductions, exemptions. People don’t like that. So, we’ve gotta look at any revenues or any cuts really.”

He said some of the cuts may come in areas that have been held harmless in the past.

“Obviously, you’ve got education and health are two of the major items that are funded and have been protected over the years, so that’s part of that doomsday scenario.”

Senator Roger Manno, a Montgomery County Democrat, who also sits on the budget committee, warned that threatened cuts in federal spending could create a hole in the state’s budget even bigger than the projected one billion dollars. Real money, he said.

“Three billion dollars is what the real number should be. And we have gotta be very creative and dig very deep in order to balance this year’s budget in a way that’s fair in terms of shared sacrifice and protects vulnerable populations and the critical assets of the state of Maryland. And that’s what we’re in the business of doing this year.”

If lawmakers don’t solve the problem, he said, the Board of Public Works could be forced into making across the board cuts later in the year if revenues fall short.

“Across the board cuts hit everyone. In my estimation, they hit overwhelmingly poor people and folks in the middle income. So, we want to avoid that scenario by dealing with this thing comprehensively now.”

Miller said he hopes he can find the votes necessary to move a budget that includes some tax increases and the transfer of some teacher pension costs to the counties because everyone will find something wrong with the plan.

“We’re going to give the body the opportunity to do either one, either doomsday or continue to have the state make progress.”

He said the budget fight will be either profiles in courage or profiles in hell.

I’m Joel McCord, reporting in Annapolis for 88.1, WYPR.