Shore Counties Unclear On State Budget Impacts

SNOW HILL — With the Maryland General Assembly unable to agree on a budget by Monday, Worcester and Wicomico County officials are predicting that Gov. Martin O’Malley will call for a special session within the next three weeks.

However, while Wicomico Executive Rick Pollitt warned that the current default budget automatically adopted Monday, nicknamed the “doomsday budget,” would be “devastating” for his county, Worcester County Commissioner Virgil Shockley admitted that the default budget was hardly the worst case scenario for Worcester.

“For us, this doomsday budget, if it stands won’t be as bad as some other scenarios that could pass,” Shockley said.

Because of the assembly’s failure to pass the revenue portion of a budget, the plan defaulted to a scenario where everything is leveled by cuts, this year to the tune of around $500 million across the board.

Shockley explained that Worcester, unlike Wicomico, is not heavily dependent on state aid. In the last few years particularly, Shockley said that Worcester has seen funding from Annapolis dry up to the point where the county has gotten used to living lean.

“We don’t get that much [state aid] … it’s like they’ve cut you so much that there’s nothing left to cut,” Shockley said.

There are still some programs benefiting from state funding, though. The Worcester Board of Education was anticipating a $370,000 increase in state aid this year, though the amount would be more than offset by new mandates from Annapolis and an expected shifting of certain costs, including those for teacher pensions, from the state to county level. It should be noted that, while the teacher pension bill was slated to be finished this week, much like the revenue side of the budget it stalled from lack of time.

A compromise that would have had both the state and counties eventually sharing the cost of teacher pensions 50-50 after four years, passed the Senate but couldn’t beat the clock and clear the House Monday before the session expired.

Under the doomsday budget, the $370,000 in state aid to Worcester is at jeopardy, though school board officials aren’t sure yet to what degree.

“At this point and time, we’re still receiving information,” said Superintendent of Schools Dr. Jon Andes. “We do not have final information in regards to the impact on the school systems in state aid.”

Andes explained that the “big question” the schools in Worcester face is whether or not the cuts to education in the doomsday budget will affect the proposed increase in state aid or the baseline of what money the county currently receives. In other words, Andes isn’t sure if cuts will come out of the potential $370,000 increase, leaving Worcester with a net gain in state funding, or if cuts will eliminate the increase and actually damage the baseline, leaving Worcester with a net decrease.

“Right now, we’re receiving conflicting information,” said Andes.

The state should be releasing some financial aid information that will help paint a clearer picture, either by the end of this week or the beginning of next, according to Andes. Until then, he reiterated that Worcester is pretty much in the dark as to what to expect.

Though it isn’t perfect, Commission President Bud Church agreed with Shockley that the doomsday budget is better than some of the alternatives floating around.

“You live with the devil you know,” he said.

Church said he did not think the assembly had done a good job with the first budget and was pessimistic about their ability to clean things up in a second session. Shockley felt much the same.

“I think it was very dysfunctional, and that’s a kind word, session,” he said.

Still, Church called a special session “inevitable” though he considered it a “gamble” as to whether the legislation that emerges from that will be an improvement on the default budget.

“It could have been a whole lot worse than it was,” he said.

In Wicomico, however, officials have a better idea of what to expect if the doomsday budget remains, and they are not happy. County Executive Rick Pollitt said that if O’Malley fails to call a special session to get back to the budget, Wicomico will be hit hard by the plan currently in place.

“We are counting on an early special session to complete the accommodations Chairman [Delegate Norm] Conway has worked out to ease our Maintenance of Effort obligations,” said Pollitt. “Without [the special session] we have a devastating budget gap of $7 million that will wreak havoc with our plans for the coming fiscal year.”

Pollitt referred to new state requirements forcing counties to fund schools at least as well as they did previously, keeping up a “Maintenance of Effort”. Due to revenue loss, Wicomico would have a difficult time reaching that level this year and may need to come up with  $7 million from their already stretched budget to satisfy the state requirement, depending on if the default budget is kept, a decision that Pollitt was vehemently against.

“Many more things are now slated for deeper cuts than originally anticipated,” he said. “The word is ‘devastating.’”

If Wicomico is unable to locate the $7 million, new state laws would allow the raising of property taxes above and beyond a revenue cap, such as the one Wicomico has in place, as long as the money went towards education.

For better or worse, officials from both counties expect O’Malley to call for a special session.

“It’s not over with yet … I don’t see this staying the way it is,” said Shockley. “I figure in the next three weeks they’ll be in session.”

Shockley guessed that the only reason the original budget had failed to pass was because state legislatures balked at the last minute when asked to vote in favor of a number of tax increases that O’Malley pushed for to balance the budget with revenue.

“Political survival kicked in at the 11th hour,” Shockley said.