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Gloom fills State House
Friday, Jan. 9, 2009
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ANNAPOLIS –— The Maryland General Assembly has only one constitutional mandate during its annual 90-day session: balance the state budget.
That's no easy task this year in the face of a nearly $2 billion shortfall, which explains why lawmakers will spend the bulk of the legislative session that begins Wednesday wading in a sea of numbers.
Put simply, the 2009 session is all about the Benjamins.
"I think there will be a lot of gnashing of teeth over the state's budget," said House Minority Leader Anthony J. O'Donnell (R-Calvert, St. Mary's).
Even the most hardened politicians can't recall a more ominous fiscal outlook at the dawn of a session.
"In the last 40 years, there's not been a comparable time," said Senate President Thomas V. Mike Miller Jr. (D-Calvert, Prince George's), who has served in Annapolis since 1971.
Indeed, the huge size of the economic crisis is unprecedented, lawmakers said. And there are no signs of a quick turnaround.
"The cavalry's not coming," said Del. Murray D. Levy (D-Charles). "We're going to have to rescue ourselves."
Already, state leaders have made several rounds of cuts just to plug holes in the current year's balance sheet. The Board of Public Works is expected to consider roughly $415 million in additional reductions later this month to make up for underperforming revenue collections in fiscal 2009
The prospect of a deficit nearly five times larger has lawmakers agonizing over what items to pare.
"There is no doubt that it is going to be tougher. We're going to be looking more people in the eye and saying, ‘I'm sorry, but this is what we have to do,'" said Del. John L. Bohanan Jr. (D-St. Mary's). "It's never pleasant doing that, but we also have to recognize that there are people who are hurting individually and they're making tremendous sacrifices, so across the board everybody's got to make some sacrifices."
State employees face up to five days of furloughs before the current fiscal year ends on June 30, transportation funding has been slashed $1.1 billion over the next six years, aid to community colleges is expected to be trimmed in the next round of cuts and college tuition for in-state residents is unlikely to remain frozen for a fourth consecutive year.
The pain won't end there, as even "sacred cow" programs in education, health care and public safety are on the chopping block.
One big-ticket item under consideration is shifting the cost of teacher pensions to county governments, which has predictably met significant resistance from local leaders who say it would force them to raise property taxes at a time when citizens are already pinching pennies. Del. Peter F. Murphy (D-Charles), the rookie member of the Southern Maryland delegation, said such an approach would be "shortsighted."
But legislative leaders said counties receive about 40 percent of the state's operating expenses and they have to be part of resolving the budget solution.
"The counties are going to scream bloody murder, but they're the largest part of the state's budget," said Miller. "When the sun shines, they do very well, but in down times, they've got to take the proportion of cuts just like everybody else in state government."
Murphy did agree that cuts have to be distributed equitably.
"I think where we run into trouble is when one group is taking the burden," he said. "At the end of this in April I hope people will say, ‘I didn't like what happened, but at least I feel we were treated equally,' and then I can live with that."
Lawmakers agree that there is virtually no appetite for higher taxes, so options for balancing the budget are limited.
The state can dip into its roughly $800 million rainy day fund to help fill the hole and up-front money from slot machine licensing fees will go right into the treasury, said Levy. There may also be some pots of money that can be transferred to the general fund to mitigate the damage.
But even that won't be enough to stave off cuts to agencies and programs that rely on state aid.
"It's not going to be a pretty picture," said Del. Sally Y. Jameson (D-Charles), who worried about the impact cuts would have on groups like the Southern Maryland Agricultural Development Commission and the numerous developmental disabilities organizations based in the region.
"The most any entity receiving funds from the state right now can hope for is that they receive enough to maintain their programs," said Sen. Thomas "Mac" Middleton (D-Charles).
To be sure, Maryland is not alone in its budget bind. At least 44 states are facing similar shortfalls, according to the Center on Budget and Policy Priorities.
Republicans argue that the listless national economy isn't solely to blame for the state's fiscal woes. Had their repeated calls in recent years for slower spending increases been heeded by Gov. Martin O'Malley and Democratic leaders, the state would be in better shape.
"The whole session is probably going to be taken up by dealing with those decisions of mismanagement by the administration and the majority in the legislature," O'Donnell said.
But Democrats contend that the ice-cold real estate market and the national recession were a lethal combination that made the state's budget problems unavoidable.
Money woes notwithstanding, lawmakers are trying to keep a positive attitude that they can right the state's fiscal ship.
"It's going to be a challenging time, but it's nothing that can't be accomplished in a workmanlike manner," Miller said.
Maryland may be in better position to weather the fiscal storm than many other states because its proximity to the federal government provides stability in the workforce and the impending development related to military base realignment will produce more jobs and a stronger tax base.
And lawmakers are hopeful that a federal economic stimulus package will also present much-needed assistance.
Beyond budget
For all the clamor surrounding the budget, there's no shortage of other issues on the docket for 2009.
Lawmakers will want to make progress in areas such as criminal justice, energy, health care and the environment so they can tout some achievements when they return to their districts, rather than lament and defend undesirable cuts.
"The [Chesapeake] Bay is not doing well. The crab numbers are down and we cannot simply ignore that," said Levy. "It does not simply mean spending more money this year because that's not going to happen. We have to get smarter" in how we spend the $350 million already allocated to Bay restoration.
"Nobody wants the Chesapeake Bay to die on our watch," he added.
The state's looming energy shortfall, which could produce blackouts as soon as 2011, will likely prompt lawmakers to look at enacting affordable energy efficiency programs and a discussion on whether to return to a regulated energy market. The General Assembly has been roundly criticized for deregulating utilities in 1999, which was intended to stimulate competition and lower prices, but ultimately led to large price spikes for most consumers.
"I've been a real stickler that we don't make the same mistakes we made in 1999 when we moved forward with deregulation," said Middleton, the chairman of the Senate Finance Committee that oversees utilities legislation." I want to make sure that if we do it this time, we get it right."
Medevac helicopters will also be in the spotlight, as legislators look to reform the beleaguered system that had been under fire even before a September crash killed four people, three of them from Charles County in an ill-fated flight from a car accident in Waldorf. Some lawmakers want to establish a new Cabinet-level department to oversee the state's emergency operations, but the fiscal crunch appears likely to quash that proposal.
"I think at the very least you will see a more standardized new set of protocols that everybody in the first line of defense understands," said Middleton, who noted that Maryland's medevac system remains one of the best in the country.
There will also be another attempt at repealing the death penalty, but its chances of passage remain dim in the Senate.
Region's fair share
Locally, lawmakers said they will continue to fight for Southern Maryland's fair share of what little funding is available for transportation, school construction and other capital projects. Some have suggested shelving bond bills – upwards of $25 million set aside for local projects, such as renovations at Lions Camp Merrick in Nanjemoy, Tudor Hall in Leonardtown and the North Beach Town Hall – in light of the fiscal crisis, even though it would barely make a dent in the deficit.
"One person's pork is another person's valuable program," said Levy. "They're good programs, but the house is burning down, the rooms are on fire. We have to make some tough decisions. I think that's probably the least damaging as a way to start."
It will be a session of tempered expectations and perhaps revisiting now-unaffordable policy initiatives, said O'Donnell.
But some good can come out of the budget tumult.
"It's going to be a series of bad choices, but we have to prioritize and this can be a healthy exercise," said Levy. "It forces elected officials to think about either-or instead of additional. When the treasury is filled, everybody focuses on how to spend it. At times like this, everybody focuses on how to do it smarter and that's a good thing."
