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Budget proposal mixed bag for state employees

Originally Published on Gazette.Net

Economic & Fiscal Policy

by Daniel Leaderman, Staff Writer

MPPI IN THE NEWS

MARCH 2, 2012 Bookmark and Share

State employees find more money and additional jobs in the governor’s proposed fiscal 2013 budget, but union leaders are still hoping for additional revenue streams to avert future cuts.

Under Gov. Martin O’Malley’s spending plan, state workers are slated to receive a 2 percent cost-of-living increase, the first such raise since fiscal 2009.

The budget now must be approved by the General Assembly, which began hearings on the $35.8 billion spending plan this week.

The 2 percent increase is certainly good news, said Patrick Moran, director of AFSCME Maryland, a union representing state employees, adding that its impact would be felt by communities and businesses across the state.

Also, there are also 93 new positions for Clifton T. Perkins Hospital in Jessup, Moran said, adding that the union had been calling for better staffing for years.

But Moran said he remains concerned about the elimination of state employee positions over the past few years.

More than 5,500 state government positions have been shed since O’Malley took office in 2006, and workers have taken substantial hits to their salaries and benefits, according to 


State employees find more money and additional jobs in the governor’s proposed fiscal 2013 budget, but union leaders are still hoping for additional revenue streams to avert future cuts.

Under Gov. Martin O’Malley’s spending plan, state workers are slated to receive a 2 percent cost-of-living increase, the first such raise since fiscal 2009.

The budget now must be approved by the General Assembly, which began hearings on the $35.8 billion spending plan this week.

The 2 percent increase is certainly good news, said Patrick Moran, director of AFSCME Maryland, a union representing state employees, adding that its impact would be felt by communities and businesses across the state.

Also, there are also 93 new positions for Clifton T. Perkins Hospital in Jessup, Moran said, adding that the union had been calling for better staffing for years.

But Moran said he remains concerned about the elimination of state employee positions over the past few years.

More than 5,500 state government positions have been shed since O’Malley took office in 2006, and workers have taken substantial hits to their salaries and benefits, according to the administration. Employees have faced both furlough days and increased pension contributions.

“[The state] can’t continuously go to that well and cut state employees to make up for budget deficits,” Moran said. “It’s got to be rectified.”

Two revenue sources lawmakers should adopt this session are the millionaire’s tax and combined reporting, Moran said.

The first proposal would increase the state income tax for those making more than $1 million per year, while the second would require multistate corporations to pay Maryland tax on business done within the state.

“[Millionaires] ought to pitch in and do the right thing,” Moran said, adding that combined reported would prevent big-box stores from shifting money to other states to take advantage of more lenient tax laws.

The end result of the two initiatives would be to help protect state workers from further budget cuts and layoffs, Moran said.

But such measures would serve to drive revenue out of Maryland and discourage businesses from investing in new jobs and higher salaries for their employees, said Christopher Summers, president of the Maryland Public Policy Institute, a conservative think tank based in Rockville.

Furthermore, the private sector has lost more jobs due to the recession than have state employees, Summers said. Many of the state positions eliminated have been vacant, which doesn’t amount to a real cut in spending, he said.

Salaries and wages account for about $7.1 billion, or 19.8 percent, of the proposed budget, according to the Department of Budget and Management.

State and other public employees across the country have been facing cuts during the economic downturn, a development that may have as much to do with politics as any real cost savings, said Todd Eberly, professor of political science at St. Mary’s College Of Maryland in St. Mary’s City.

“One of first things the public wants to see is that the government is trying to live within its means,” Eberly said, adding that he, too, is a state employee.

“There’s still sort of this pervasive myth that public employees are overpaid, have wonderful benefits and job security,” Eberly said. “That hasn’t been true for a good 30 years.”

But an across-the-board income tax increase, rather than new revenue sources, is more likely to help address the state’s structural deficit of more than $1 billion, Eberly said.

Also troubling public employees is a proposal to shift half the cost of teacher pensions from the state onto local governments — a move many local jurisdictions just can’t afford, said Dale Chase, president of AFSCME Council 67, which represents state and county employees.

In the coming year, the governor’s plan would push $47 million of the pension costs onto Montgomery County and $34 million onto Prince George’s.

“You’re going to have to raise taxes and cut services,” Chase said. “You’re going to have less teachers, less firefighters.”

Prince George’s County Council Chair Andrea Harrison (D-Dist. 5) of Springdale has said the shift could require the county to make cuts to public safety, road repair and even education.