Despite O'Malley's Promises to Contrary, Counties to get Walloped in Budget Battle 3-19-09
In his ongoing efforts to make General Assembly legislators appear to be the mean and nasty ogres in the tug-of-war over state funding to localities, Governor Martin O'Malley may have reached the end of the line.
When slight reductions to localities were considered as part of long-term structural deficit measures in the 2007 Session, O'Malley stood arm-in-arm in solidarity with the Maryland Association of Counties (MACo) and stated that he would not cut local aid to balance the budget. In response, Republicans argued that small decreases would have a multiplier effect in out-years to make it easier for local officials to adjust their budgets if the economy worsened.
After the additional write-downs of state revenues on March 11th, legislators on the budget committees are facing the harsh reality that the anemic budget policy of the O'Malley Administration over the past three sessions insures that no sector receiving state funds can escape unharmed in this year's budget process.
State employees have certainly felt the ill-effects and will be asked by O'Malley to sacrifice more (see prior post: Administration Continues to Pick-Pocket State Employees). But while state funds have dwindled, state employees have watched from the sidelines as their counterparts in local government have thrived with significant budget growth and employee salary increases.
The impact of the March 11th write-downs is this: the Administration will no longer be able to scrimp on the state side while protecting full funding to localities. Over 40% of the state budget goes directly to local governments. The write-down for the FY2010 budget was $716 million, but legislators will be looking for over $800 million in cuts because the original O'Malley budget contained too small of a year-end fund balance to hedge against a continuing lackluster state economy.
Look for the counties to get whacked with over $200 million in cuts to local aid. The prime targets are education aid (nonpublic placements and aging schools), libraries and community colleges.
Despite promises to the contrary, also look for O'Malley to promote fund transfers, such as Program Open Space, that were highly criticized under the Ehrlich administration. MACo excoriated Ehrlich for reductions in the "highway user fees" - the portion of the state gas tax distributed to localities for their transportation projects. Look for their protestations to be tame when the final O'Malley budget strips $80 million of "highway user fees" from local coffers.
When the blame game is played after the final budget battle, the legislators will firmly point the finger at O'Malley - his budget strategy over the past two years of increased taxation, continued overspending and protectionism of local funding premised on a hope and a prayer for a better economic future has ill-served Maryland's citizens.