Md. Governor Lists Options To Remedy $ 1 .2 Billion Gap

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In the face of a projected $1.2 billion budget deficit, Gov. William Donald Schaefer has offered Maryland lawmakers a stark choice: either approve a major revenue-raising proposal or accept a "doomsday budget" making cuts of unprecedented severity in education and other state programs.

Even under the more optimistic proposal, which assumes the legislature will approve $526 million in new taxes and user fees, education would not fare very well. While the chief form of state aid to schools would rise, the increase would be offset by cuts that include a $67.4 million reduction in state funding for school transportation and private school placements for special education students and the loss of $150 million in aid to local governments, which frequently is used for schools.

That austerity pales, however, beside the economic hardship that could occur if the legislature declines to take the politically risky step of approving a tax increase in an election year. If so, the Governor has warned, the state's $12.57 billion budget would be balanced only through laying off thousands of state workers, eliminating several state departments, and zero-funding virtually all non-mandated education programs.

"The 'Doomsday Budget' is not what you want, it's not what I want, and most importantly, I don't think it's what the people want," Mr. Schaefer said at a news conference late last month at which he presented both budget options.

"The choice is ours to make this year," he said.

'An Arm and a Foot'

Observers said that while it is unlikely that the worst-case budget will go into effect, it is also unlikely that the legislature will raise as much new revenue as the Governor has requested.

Educators warn that either budget will harm the schools.

"I think you have to look at not only the short-range need, but the long-range need as well," said Tom Gray, the chief lobbyist for the Maryland State Teachers Association, which was part of coalition that staged a rally at the state capital last month in favor of a tax hike.

"But if you are looking at long range needs, then education has to be a primary consideration," he said.

Although Mr. Gray acknowledged that education would not be quite as hurt by the Governor's budget proposals as some other areas, he said the negative impact cannot be underestimated. "Someone else has lost an arm and a leg, and we've lost an arm and a foot," he said.

Both of the Governor's budget proposals can be seen as the latest in a series of distress signals sent out by the state's withering economy.

Five times in the last two years, declining revenues have forced Mr. Schaefer to go before lawmakers to seek nearly $1 billion in cuts to budgets that had already been adopted.

A sixth such proposal, still awaiting action by the legislature, would close a projected $225-million shortfall in the current fiscal years budget.

Much of the projected deficit, the Governor said, can be attributed to great demand for entitlement programs as a result of the recession. Yet, under the bleaker budget proposal, more than $220 million would be cut from Medicaid and public-assistance programs alone.

'Treading Water'

Although funding for the state's main education-finance formula would increase by $184.4 million, to more than $1 billion, under both budget proposals, educators said the gains would be more than offset by reductions in general aid to counties, which traditionally pump millions into education.

"The impact of the doomsday budget would be to save some dollars this year but it will cost a lot more dollars in future years," said Arthur Boyd, executive director of the Metropolitan Education Coalition, which represents education groups, religious and neighborhood organizations, and some business groups.

But even under the more optimistic budget, "the net result is that we will freeze the level of education funding at the 1992 level," Mr. Boyd said. "We will be treading water instead of making progress on the goals we need to meet in education."

Vol. 11, Issue 22, Page 22

Published in Print: February 19, 1992, as Md. Governor Lists Options To Remedy $ 1 .2 Billion Gap
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