O’Malley’s Budget Cuts Kick Off Long Process

ANNAPOLIS – In what was billed as a necessary first step in the effort to tackle the state’s predicted $1.4 billion structural deficit, Maryland Governor Martin O’Malley this week announced over $280 million in fiscal year 2008 budget cuts, most of which were directed at inefficiency and waste, but some state departments got slashed further than others and it remains to be seen what the trickle-down effect could mean for local jurisdictions.

In May, O’Malley instructed state cabinet secretaries to scrutinize their budgets for waste and inefficiency and make recommended cuts. On Tuesday, the governor announced $280 million in cuts to the various department budgets with some taking a bigger hit than others. While some applaud the cuts for streamlining government and eliminating waste, critics claim the cuts go too far and will jeopardize the state government’s ability to provide needed services to its citizens.

No matter what side of the fence one stands on, or which sides of the aisle state elected officials sit on, all agree the initial cuts are just a first small step in what will be a larger effort to tackle the burgeoning $1.4 million structural deficit. The $280 million slashed from the state budget this week represents about 20 percent of the entire $1.4 million, and the remaining 80 percent will have to be made up with a creative plan to increase revenue, likely through tax increases or other sources such as slots, for example.

Nonetheless, the $280 million cut from the budget represents a necessary first step, according to O’Malley, and confirms a commitment by the new administration to tackle the deficit. The governor said this week the task was difficult but necessary, given the pending fiscal crisis facing the state.

“This first round of cuts was not easy, but as we work to close a $1.4 billion structural deficit, our state agencies have to become more efficient, work smarter and focus on their core mission,” he said. “In the coming months, we face more difficult choices as we work with the General Assembly to balance the budget and continue to make critical investments in our state’s future.”

Like every jurisdiction, the state must find a balance between cutting expenses and increasing revenues, and, typically, raising taxes is a measure of last resort from a political standpoint, forcing governments to cut funding for programs first before looking to increase revenue from other sources. The Worcester County Commissioners face the same dilemma each year at budget time and County Administrator Gerald Mason is fond of saying “everybody’s ox got gored,” when the local elected officials emerge from budget cutting sessions.

Well, it is safe to say this week everybody’s ox got gored when O’Malley announced the first round of state budget cuts, and some departments and agencies got gored more than others. Taking the biggest hit was the Department of Health and Mental Hygiene with $46 million stripped from its budget. Other big losers included the University System of Maryland at $12 million, the Department of Human Resources at $14 million and the state Board of Education at over $6 million.

Critics claimed early the cuts will result in the elimination or, at least, downsizing of programs critical to the state’s most vulnerable citizens. However, state officials in support of the cuts remain confident the programs will not suffer and the reductions are solely directed at eliminating waste and streamlining the various departments. For example, Delegate James Mathias (D-38B) said this week the cuts in deficiencies come in advance of a more creative way to increase state revenues.

“What the governor is attempting to do is cut waste and inefficiency before any consideration is given to raising taxes or finding other revenue sources,” he said. “There has to be a blend of both. There is always a reluctance to raise taxes, so you try to work through everything else before you get to that measure of last resort.”

Mathias acknowledged the cuts announced this week could put a strain on state programs. He said the biggest concern is how much is too much before state and local programs start to feel the pinch.

“You try to start with the inefficiencies, but sooner or later you get to the point where you can only cut so much without losing the effectiveness of the programs,” he said. “The intent of this is to maximize the services with the minimum amount of expense.”

Mathias said tackling the massive state deficit will take a cooperative effort from all corners of Maryland.

“It doesn’t matter if you’re a Democrat or a Republican, or if you’re from Western Maryland or the Eastern Shore,” he said. “We’re going to have to put it all on the table and see what comes out the other end.”

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