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The Department of Business and Economic Development faces about a 4 percent, or $3.7 million, budget cut in the fiscal 2011 proposal unveiled this week by Gov. Martin O'Malley (D).

If the legislature OKs the cut, DBED's $94.5 million budget next fiscal year would be its lowest since 2005. Reductions would be primarily in special fund financing programs and the closing of several Welcome Centers. The department would have three fewer staff positions and 12 fewer contract jobs than this year.

The cuts are a concern because DBED's budget is declining at a time when the state needs to expand its economic development efforts, said Ronald W. Wineholt, vice president of government affairs for the Maryland Chamber of Commerce.

"Teacher and employee pension costs and state employee fringe benefits continue to grow beyond levels provided in the private sector," Wineholt said. "These cost drivers must be addressed if we are going to resolve the state's structural budget deficit and maintain our AAA bond rating."

O'Malley's proposal shows total spending to decline by $249 million, which state officials said would be the first drop in at least 39 years.

The budget includes $20 million for a new jobs creation tax credit, $16.1 million in capital funds to build the Germantown Bioscience Center at Montgomery College, $12.4 million for stem cell research, $6 million for biotechnology investment tax credits, $5 million in capital money for the East Baltimore Biotechnology Park and $3.8 million for the Maryland Biotechnology Center.

O'Malley also wants to see a Sustainable Communities Tax Credit program to replace the Heritage Structure Rehabilitation Tax Credit program that is slated to expire in June.

Chamber happy with bioscience center funding

The funding for the planned 127,000-square-foot Germantown Bioscience Center made officials with the Gaithersburg-Germantown Chamber of Commerce happy, as the project is among the chamber's top legislative priorities this year. The education center will house the college's biotech and some other science programs on the Germantown campus.

"It's a very difficult budget year, so we were concerned," said Marilyn Balcombe, president and CEO of the Gaithersburg-Germantown chamber. She and other officials plan to follow the budget debate in the legislature.

"Legislators in our county delegation are all supportive," Balcombe said. "I hope that others in the state understand the importance of having this in the state of Maryland."

The $83.1 million bioscience center is slated to break ground this year and be completed in early 2013, said Elizabeth Homan, a spokeswoman for Montgomery College. The state already provided some funds this fiscal year and is expected to contribute the next two years, she said. Montgomery County is also contributing.

The Gaithersburg-Germantown chamber also wants to see support for transportation programs and projects, such as the Intercounty Connector and Corridor Cities Transitway. But the chamber didn't create a specific, detailed wish list, knowing it's a tough economic time, Balcombe said.

Most other state departments and agencies are targeted for budget reductions. The Department of Labor, Licensing and Regulation faces a 13 percent cut, or almost $35 million, next fiscal year under O'Malley's proposal. The biggest decline is in the work force development division, which faces a 29 percent cut.

The Maryland Technology Development Corp. is also proposed to receive 5 percent less next fiscal year.

The Health and Transportation departments are among those proposed for budget increases, of 9.4 percent and 4.3 percent, respectively.