Maryland analysts outlined nearly $800 million in potential budget cuts on Tuesday that would have considerable consequences for education, health and aid to local governments in a so-called doomsday alternative plan to Gov. Martin O'Malley's proposed budget.
The plan has been presented to lawmakers in case they fail to agree on new revenues and savings needed to balance the state's books for the next fiscal year and reduce an ongoing $1.1 billion deficit by half.
"This is not a scare tactic," Senate President Thomas V. Mike Miller, D-Calvert, said. "The governor's proposed budget, it's got revenues as well as cuts. You've got three options -- revenues, cuts or a combination of both, and this is what we're going to come up with if we can't come up with an agreement."
A big piece of the alternative option outlined Tuesday could come from eliminating the Geographic Cost of Education Index, which would save about $129 million. The GCEI, which is the only part of education aid not strictly mandated under Maryland law, helps areas where schooling costs more.
Another $101 million could come from reductions in Medicaid. The state also could save $115 million by reducing funding for higher education by 10 percent. Eliminating 500 state government positions would save another $30 million.
Lawmakers from the state's largest jurisdictions noted that they would bear the brunt of cuts to local aid.
Of about $307.7 million in impact to local governments, more than half would be absorbed by Baltimore city and Montgomery and Prince George's counties.
"It would be very difficult to balance the budget without going against local government programs in an environment where the savings that you're anticipating elsewhere could not be obtained," said Warren Deschenaux, the director of the state's Office of Policy Analysis, who presented the options to the Senate Budget and Taxation Committee.
The alternative list of cuts is being presented to lawmakers because of reluctance to embrace some of Gov. Martin O'Malley's proposals to raise new money and find savings to reach the ultimate goal of reducing an ongoing $1.1 billion structural deficit by half.
A big part of the savings comes from splitting teacher pension costs with counties, a change that would save the state about $239 million, but county officials are strongly opposing the shift. The state currently pays the entire cost.
O'Malley built in revenues to help offset the expense to counties in the first year of implementation. However, those proposals also are running into resistance.
The difficulties of cutting the budget this year are being compounded by years of lean times. Now, options for saving money have become increasingly challenging.
"I am not going to say that the world will come to an end if all of this came to pass, but it would be a different world for public services in the state," said Deschenaux, a chief budget expert in Annapolis who sits at the head of the table when a committee of lawmakers meets to work out differences between the House and Senate budget legislation at the end of the year
Sen. Delores Kelley, D-Baltimore County, asked Deschenaux about other alternatives, but he said there weren't any others currently on the table.
"This is plan B and C," Deschenaux said.
Even if lawmakers approve a budget plan that halves the structural deficit, Maryland will still face a deficit of several million dollars when they come back next year.
Deschenaux, who pointed that out in his briefing with lawmakers on Tuesday, has been urging lawmakers to get a solid grip on the state's ongoing deficit so that they can begin to focus on economic challenges of the future. That includes how the federal government is going to address its own fiscal problem, which could have a big impact on Maryland where many federal workers live.
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