Budget Philosophy Changes As Committees Near Decisions 3-20-09

One of the things feared most by veteran legislators is the emergence of a major controversy during an election year legislative session.  The power of incumbency dissolves before an angry constituency.  The classic example in Maryland is Governor Harry Hughes who was expected to be Maryland's U.S. Senator but for the state's savings and loans crisis on his watch.

The next election for state officials is 2010.  If the recession continues and state revenues continue to drop over the next 12 months, the exceedingly tough budget decisions necessary for next year's session could lead to many angry constituents - including ones likely to express their wrath at the polls in 2010.

Democrat and Republican legislative leaders have been frustrated at the O'Malley Administration's lack of comprehension of the state's economic realities and its failure to produce a blueprint for resolving the budget with minimal controversy.  For a concise retrospective of the Administration's inaction, see O'Malley Gazing into Cloudy Crystal Ball by Barry Rascovar in today's Gazette (click here).

Legislators are still awaiting the Governor's supplemental budget that is necessary to appropriate the allocation of federal stimulus funds that were announced by the Administration over a month ago and to establish the Governor's priorities for spending reductions to achieve a balanced budget.

Absent a supplemental budget, legislators are taking budget matters into their own hands and looking to make deeper cuts than originally anticipated.  Local jurisdictions, which have had the luxury of cutting taxes and raising employee salaries due to enhanced state funding, will face the state's "rebalancing of the fiscal load" through significant cuts in local aid (see State Leaders Look to Share Fiscal Pain by C. Fraser Smith in The Daily Record - click here)

In the Senate chamber this morning, Senator Ulysses Currie, D-Prince George's County, Chairman of the Senate Budget and Tax Committee gave a status update on the budget.  The initial goal for the O'Malley FY10 budget submittal is to achieve an additional $1 billion in spending reductions in order to offset the $800 million in the March 11th revenue write-downs and to leave a $200 million fund balance as a cushion against potential continuing revenue write-downs later this year.

But Senate Currie added, "There is some discussion with the FY11 budget - because the problem with FY11 will be as great, if not greater, than FY10 - whether we should start addressing the FY11 problem now rather than waiting until next year."  By this, legislators are sending a signal to O'Malley of frustration with his lack of budget leadership and expressing their willingness to take things into their own hands and to strike the deeper reductions necessary for long-term stability of the state budget.

O'Malley's budget philosophy has been to skirt the fundamental spending problems in classic "conflict avoidance" in order to inflict as little pain as possible.  He made do well to heed the legislator's new philosophy:  Inflict the pain now, because it is better to have screaming constitutents in March of 2009 than to have them in March of 2010 just five months before the primary election.