The state Board of Public Works made $349 million in spending reductions this morning in an attempt to fill a budget gap driven by dour revenue forecasts.
The board's move comes as state finances continue to drown in a deluge of red ink, with a projected $1.4 billion shortfall in fiscal 2010.
Although last year's historic tax increases were meant to lead to the end of the state's deficit problems, they are nowhere near to being over, according to estimates released yesterday by the state Department of Legislative Services.
Even if voters approve the slot machines referendum on Nov. 4, Maryland still will have an almost $1.5 billion deficit in fiscal 2011 and a $1 billion deficit in fiscal 2012, with similar deficits stretching even further into the future.
"That is not small change," Warren Deschenaux, the director of policy analysis for DLS, told House and Senate financial committees yesterday.
The board took money this morning from areas such as health care, public safety and education, as Gov. Martin O'Malley's administration finds itself with few obscure areas left to slice.
Larger reductions approved by the board - composed of the governor, Comptroller Peter Franchot, and Treasurer Nancy Kopp - include $39.3 million earmarked for health care, $15.6 million for the University System of Maryland and $8.2 million for community colleges. It wasn't clear this morning how big of a hit Anne Arundel Community College will take.
Mr. O'Malley has put off some of the more controversial items under consideration,including a six-day unpaid furlough for state employee worth $48 million and a subsidy for education expenses in high-cost jurisdictions that totals $38 million.
"We need some more time to talk to our partners and stakeholders and employees," he said.
The amount of time the governor will be able to hold out on sweeping decisions, however, appears to be shortening.
Legislative committees - including the Spending Affordability, Senate Budget and Taxation, House Appropriations, and House Ways and Means - were urged by Mr. Deschenaux to look at fundamentally changing the way the budget is done.
Some hard decisions are ahead, he said: whether to reduce formulas for higher and public education; restructure employee and retiree benefits; or restrain costly initiatives such as expanding health care, setting aside money in a new fund for cleaning up the Chesapeake Bay and freezing college tuition.
"I think these things need to be reexamined in the context of a new fiscal reality," Mr. Deschenaux said.
Some legislators were disappointed revenue projections were so optimistic during last fall's special session and opened the door to keeping spending at high levels.
"This legislature, this year, has to learn a new word, and that is cutting," said Del. Ron George, R-Arnold, a member of the House Ways and Means Committee. "We are continually giving a credit card to a person with a spending problem."
But the state will bump up against resistance.
When Mr. O'Malley spoke to the Public School Superintendents Association of Maryland yesterday, Anne Arundel County Superintendent Kevin M. Maxwell voiced concern about a $300,000 reduction in fine arts workshops and training.
The reduction was expected to be finalized this morning.
Dr. Maxwell remembered a conversation he had with the governor recently during a school tour, where they had agreed there is a "need to have more creative minds."
"I find those (workshops) very beneficial," he said. "I know (teachers) find it beneficial."
Mr. O'Malley urged the audience yesterday to keep in mind he is not making reductions because of philosophical or policy differences.
"A lot of the decisions that I'm going to have to make over the course of the next two years, I'm not making because of a lack of belief or because I'm a hypocrite or a liar," he said. "There's not any more money."
