Cuts to counties on horizon
Legislators worry O'Malley will slash local governments, teacher pensions
ANNAPOLIS — Members of the O'Malley administration Tuesday continued to raise the specter of cuts in state aid to counties and to state employees.
The officials also told a joint briefing of the General Assembly's budget committees that a discussion of furloughs is ongoing.
"We're looking to revise employee compensation packages and also looking to bring local governments to the table in making cuts in the amount the state provides to local governments," said state budget Secretary T. Eloise Foster. "At this point, no reduction is going to be made to K-12 education."
The Board of Public Works, made up of the governor, the comptroller and the treasurer, has the authority to make cuts of up to 25 percent of an agency's budget. The board made $280 million in cuts on July 22 and will make more than $700 million in cuts at its Aug. 26 meeting.
Those cuts will come three weeks before a meeting of the Board of Revenue Estimates, which is expected to detail further large write-downs in state revenue from property, sales and personal and corporate income taxes.
Concerns about major budget cuts coming down on county governments have a newfound urgency, legislators said this week.
"I think we've cut all the things that are palatable at this point, and there aren't really too many places to go," Sen. Nancy J. King said Monday.
King (D-Dist. 39) of Montgomery Village said that she expects that state aid for teacher pensions could be slashed, leaving the costs up to the counties.
Recalculating how much the state contributes to pensions would require legislation and could not be done by the Board of Public Works, said Joseph Bryce, Gov. Martin O'Malley's chief legislative aide.
Pensions, which are fully funded by the state, accounted for $759 million of O'Malley's original $13.8 billion fiscal 2010 budget. That is an increase of $137 million, or 22 percent, from fiscal 2009.
Pension costs total $59.4 million for school system employees in Montgomery County for fiscal 2010.
County governments appear to be easy targets for cuts, said Del. Murray D. Levy (D-Dist. 28) of La Plata.
Of the $6.5 billion in aid that counties receive from the state, about $5.3 billion is for K-12 education. The remaining $1.2 billion goes to local health departments, law enforcement and grants aimed at bridging tax revenue disparities between the counties.
Meanwhile, O'Malley (D) is asking the counties, the unions and the public to bring suggestions for cuts to the table.
The Governor's Office Web site has solicited suggestions from the public. The office plans to release those suggestions — about 600 pages comprising about 1,000 suggestions — on Thursday, said Matthew Gallagher, the governor's deputy chief of staff.
Administration officials have had "about a half-dozen conversations" with union officials in recent weeks, he said. Employee furloughs have been a topic.
The structure of furloughs implemented under the fiscal 2009 budget "provide some indication of the way we want to go about doing it," Gallagher said.
State employees were forced to take two furlough days late last year and another two to three over the remainder of the fiscal year, depending on their pay level.
As agencies look to eliminate positions that are not part of their "core functions," some positions could be cut, although wholesale layoffs are not being considered, Foster said.
Last month, the Board of Public Works eliminated 39 filled state positions, including 18 from the Department of Natural Resources and 18.5 vacant positions.
"Furloughs are more reasonable [than layoffs] but they still exact a cost," Sue Esty, assistant director of the American Federation of State, County and Municipal Employees, said after an Annapolis rally against budget cuts before Tuesday's briefing.