Too much or not enough?
By Janel Davis and Douglas Tallman, The Gazette
Published on Friday, July 13, 2007
MPPI IN THE NEWS
With the dust settled on this week’s budget cuts, two camps seem to have emerged: The cuts will bring pain or the cuts didn’t go deep enough.
‘‘None of these cuts come without some level of pain,” said David S. Bliden, executive director of the Maryland Association of Counties. ‘‘Whenever there are agency cuts, there is some trickle-down to counties that creates backfill. These are services that residents expect, and when the state retreats, that puts pressure on the counties to backfill the service.”
A countering argument comes from the Maryland Public Policy Institute: Deeper cuts are possible.
‘‘We think there is more that can be done,” said Christopher Summers, president of the Germantown think tank. ‘‘The easiest thing to do is to increase programs; the hardest thing to do is to reduce them because politics pushes aside sound policy.”
On Tuesday, Gov. Martin O’Malley (D) ended weeks of secrecy and unveiled $280.7 million in mid-year budget reductions. He trimmed $128.4 million from the fiscal 2008 budget, collected $84.6 million in reversions and chose not to spend $67.6 million in fees and federal grants.
‘‘This is one step of many, many steps,” O’Malley told reporters at a news conference in Annapolis.
In May, he had asked his Cabinet secretaries to come up with $200 million in cuts — from a budget approved the previous month — to take the first swing at closing a budget gap predicted for fiscal 2009. Forecasted spending is expected to outpace revenue by about $1.5 billion; by law, all Maryland budgets must be balanced.
Forty state agencies had their budgets trimmed ranging from 0.35 percent to 6.75 percent. The Office of the State Prosecutor had its budget sliced by $5,000, or 0.42 percent. O’Malley hacked nearly $46.7 million from the Department of Health and Mental Hygiene, or 1.26 percent.
The cuts amounted to 0.94 percent of the general fund, the portion of the Maryland budget funded by lottery revenue and sales and income taxes.
Most of the cuts will be banked to help O’Malley draw up his fiscal 2009 budget. That document goes to the General Assembly in January. The governor said about $100 million represents cuts that will further reduce future budgets.
The reductions cut 147 positions, 35 of which were contractual. Only 17 of the positions were filled.
Cuts are not enough
On Wednesday, the Board of Public Works unanimously approved the cuts, but not without some anxiety voiced by Comptroller Peter V.R. Franchot (D) and Treasurer Nancy K. Kopp (D).
‘‘We’re asking the most vulnerable to make sacrifices, but we haven’t really asked the most affluent,” Franchot said. He wants to close corporate tax loopholes and modernize the state tax code to collect more revenue.
The O’Malley administration has squeezed all the efficiencies it can out of state government; further cuts will affect the delivery of services, Kopp said. ‘‘To simply cut and cut and cut and cut will leave us in a state that I’m not sure our children will want to live in.”
At his news conference, O’Malley said more cuts could be on the way, but he put off discussion about what sorts of revenue measures could plug the gap.
Democratic lawmakers have been mulling an assortment of tax proposals. Members of both parties have expressed support for an expansion of legalized gambling.
‘‘We think the gap can be cut without raising taxes but by getting spending in check and streamlining some of the government programs,” Summers said.
Donald C. Fry, president and CEO of the Greater Baltimore Committee, said O’Malley’s cuts could get more difficult as the process continues.
‘‘With these cuts, most of the reductions in personnel were done by eliminating vacant positions. As time goes on, that may not be an option,” Fry said.
House Speaker Michael E. Busch expressed a similar sentiment Wednesday in a meeting with Gazette editors and reporters.
‘‘I don’t think there was a whole lot of fat in state government. [Gov. Robert L.] Ehrlich went in and he tried to get what he could out of state government,” said Busch (D-Dist. 30) of Annapolis.
Bliden called O’Malley’s cuts a ‘‘good-faith effort” to look at state services that have suffered from funding challenges for more than 10 years.
‘‘The challenge is squeezing juice from a lemon that’s been sitting out in the sun for a decade,” he said.
In the first round of squeezing, O’Malley kept his word to the counties, said Bliden — whose ‘‘clients” are the state’s 23 counties and Baltimore city.
‘‘The governor has honored his commitment not to shift the state’s fiscal woes on the shoulders of the counties,” he said. ‘‘I think it just evidences his familiarity with being on the receiving end, as the mayor [of Baltimore], of budget cuts.”
Counties are not complaining, Bliden said, but reductions in areas such as community-based services for children indirectly affect counties, requiring them to fill the service gap.
‘‘Until the issue is fully resolved, the citizens of Maryland are losers,” he said.
But some cuts don’t have to come in services to residents. The Maryland Public Policy Institute suggests the state get out of ‘‘perennial money-losing investments” — for example, convention centers, the Rocky Gap Lodge and Golf Resort and Oriole Park at Camden Yards. The Maryland Stadium Authority, Summers said, has ‘‘achieved its mission and should be shut down.”
‘‘It doesn’t take an MBA to say we have a serious problem: Revenues are not equaling the spending. Unchecked spending and generous entitlement programs are a huge driver of costs that need to be addressed,” Summers said.
To some, the cuts may seem deep, but this is a necessary exercise, said Fry, who served in the state legislature from 1991 to 1999.
‘‘The governor went through this process in the early days [as mayor of] Baltimore city. He made significant reorganization of the city government and made some lasting impact in its structure of costs,” Fry said. ‘‘He’s got to make sure that he’d done the same thing at the state level.”
The fat-trimming exercises that the administration is now conducting are also necessary for public support, Fry said.
‘‘The public is going to want to see that the governor has done everything is his power to make reductions before they are willing to maybe [incur] some tax increases,” he said. ‘‘This is the first signal to the public that there needs to be some changes.”
Worry over services
But if leaders are reaching consensus on the budget, advocates are lining up to oppose the cuts.
‘‘The cuts at the Department of the Environment are significant,” said Brad Heavner, state director of the advocacy organization Environment Maryland. ‘‘There is not adequate staff right now to effectively enforce environmental policies. It’s a huge problem when the state can’t send out inspectors. It leads to a culture of knowing that the law is unenforceable.”
Under the governor’s cuts, the department would lose three positions and about $735,000, or about 1.62 percent of its budget.
Environment Maryland expects to publish its own list of budget recommendations in the next few weeks. Among them, Heavner said, will be increasing emission permit fees, closing a loophole that allows some corporations to avoid paying some environmental taxes and finding sustainable funding for the Chesapeake Bay restoration.
‘‘I think the [O’Malley administration’s] interests are good, and they want to do the best jobs they can,” Heavner said. ‘‘I think the next step will be key to see where we can establish new fees for the services that the state government provides.”
Frederick County Commissioners President Jan H. Gardner (D) is concerned that O’Malley’s public health cuts are going in the wrong direction.
‘‘I don’t think public health can take any more reductions,” she said. ‘‘Public health has struggled over the past few years and I have real concerns about that.”
Gardner said her county has increased its early childhood education spending — partly motivated by an increase in children with autism — by $800,000 over the past four years, while the state has increased its budget for the same services by $23,000 over the same time.
‘‘We’re filling the gap,” Gardner said. ‘‘We’ve seen nickel-and-dime reductions in public health, and after year after year of that, we have come to a critical point.”
For troubled or disadvantaged children and families, two major concerns remain in budget cuts that, otherwise, are not likely to have a big impact, said Matthew H. Joseph, executive director of Advocates for Children and Youth.
Fewer doctors and dentists may be willing to provide care to poor patients with a promised increase in pay rates reduced from 5.3 percent to 4.3 percent. Providers are already scarce, Joseph said, noting that Deamonte Driver, 12, of Prince George’s County died in February from an infected tooth after his mother couldn’t find a dentist to treat him.
Advocates worry that the decision to cut $1.5 million for HIV⁄AIDS from the state’s managed care formulary could be keep some people from getting the medicine they need.
‘‘Many patients with HIV⁄AIDS depend on state and federal programs for treatment,” said C. David Haltiwanger, director of clinical programs and public policy for Chase Brexton Health Services, which operates several clinics in the state.
Federal aid to Chase Brexton has declined to 98 percent of 2003 levels, Haltiwanger said, while the number of patients the clinic treats has increased 35 percent.
Haltiwanger said he hopes other ways will be found to pay for the medicines.
A $2 million cut in money for foster care represents a ‘‘lost opportunity” that could delay reform efforts aimed at moving children out of group homes and into expanded family support and care programs, Joseph said.
Experts regard those programs, which try to fix problems in a child’s home and return the child to live there, as more effective.
Kimberly Propeack, lawyer and organizer for immigrant rights group Casa of Maryland, said she understands the need for cuts but is concerned that they are ‘‘increasingly dipping into fundamental human services.”
Changes need to be made on the income side of the budget, Propeack said, adding that ‘‘too many very low-income people are paying taxes.”
A 2.34 percent budget cut ($377,649) at the Department of Labor, Licensing and Regulation is bad news for efforts to increase workplace safety, said Jim Grossfeld, a Montgomery County Commission on Health member who has said Maryland’s Occupational Safety and Health division would be underfunded even if its budget tripled.
‘‘It’s hard to see how it wouldn’t decrease the ability to make inspections,” said Grossfeld, who wants local governments to help by having their employees report violations they see to the state.
‘‘It underscores why there’s a need for a new partnership between MOSH and local government, not only in Montgomery but statewide,” Grossfeld said.
Staff Writers Margie Hyslop, Alan Brody and Sean R. Sedam contributed to this report.
Winners
Counties were largely spared direct aid to local jurisdictions — for now.
Public safety took only a modest hit — for now.
University System of Maryland was asked to give up $20 million. Cuts spared $8 million — for now.
Only 17 state workers lost their jobs. Those 17 would hardly think they’re winners, but the 80,000 who kept their jobs can breathe a sigh of relief — for now.
Because so much of its budget is funded by the Transportation Trust Fund, the Transportation Department was spared — for now.
Losers
Peter V.R. Franchot — Since taking office, Franchot has tried to convince the state that the Comptroller’s Office has some role in setting policy. For the second time in a month (remember the Queen Anne’s County land deal?), he has offered a lot of sound and fury, but ultimately he votes with his Democratic confreres, signifying his position is nothing.
Department of Health and Mental Hygiene — House Speaker Michael E. Busch said Secretary John M. Colmers had a better grasp on his department than other secretaries, and as a result DHMH took a bigger hit than other departments.
