‘Dooms­day’ bud­get used as club

$800 mil­lion in cuts pro­posed

The Washington Times Daily - - Metro - BY DAVID HILL

AN­NAPO­LIS | State bud­get an­a­lysts Tues­day sug­gested nearly $800 mil­lion in po­ten­tial cuts as part of a “dooms­day” bud­get that Se­nate lead­ers have vowed to con­sider if law­mak­ers can­not agree on a mix of cuts and rev­enue in­creases in this year’s spend­ing plan.

The an­a­lysts briefed the Se­nate Bud­get and Tax­a­tion Com­mit­tee on the re­duc­tions, which in­clude cuts to ed­u­ca­tion and health ser­vices, elim­i­na­tion of 500 state jobs and more than $300 mil­lion in cuts of lo­cal aid to coun­ties.

Se­nate Pres­i­dent Thomas V. Mike Miller Jr. said law­mak­ers are de­ter­mined to make more ag­gres­sive cuts than those in Gov. Martin O’mal­ley’s pro­posed bud­get but that the dooms­day pro­posal is meant to show some tax hikes also are needed.

“It’s huge cuts to Med­i­caid, huge cuts to higher ed­u­ca­tion and hope­fully we can avoid that,” said Mr. Miller, Prince Ge­orge’s County Demo­crat. “And the only way you’re go­ing to avoid that is with rev­enues.”

The Gen­eral Assem­bly is charged this year with not only pass­ing a bal­anced bud­get but also cut­ting at least half of the state’s $1.1 bil­lion struc­tural deficit, which mea­sures ex­pected rev­enue short­falls in fu­ture years.

Mr. O’mal­ley, a Demo­crat, pro­posed a $35.8 bil­lion bud­get this year that has drawn re­sis­tance from Repub­li­cans and many Democrats who say it leans too heav­ily on rais­ing taxes and shift­ing $239 mil­lion in teacher pen­sion costs onto coun­ties.

The dooms­day bud­get would forgo the gov­er­nor’s pro­posed tax in­creases

“As soon as this was ex­posed, DOES stopped the prac­tice and used lo­cal funds to back­fill the work­ers’ com­pen­sa­tion funds,” she wrote. “Since that time, the com­mit­tee has con­tin­ued to work with DOES to en­sure that work­ers’ comp funds have not been used to fund other pro­grams.”

The re­cent work­ers’ com­pen­sa­tion bud­get move sur­faced last month dur­ing what coun­cil sources de­scribed as a “ker­fuf­fle,” when Kwame Brown pub­licly ac­cused Mr. Goulet of “hid­ing” funds by mov­ing them with­out coun­cil ap­proval, as re­ported in the blog D.C. Wire. Mr. Goulet, the blog stated, wrote the mat­ter off as a “draft­ing er­ror.”

But when asked for its po­si­tion on the move­ment of re­stricted funds from the work­ers’ com­pen­sa­tion pro­gram, Doxie Mccoy, se­nior com­mu­ni­ca­tions man­ager for Mr. Gray, said in an email: “The Gray ad­min­is­tra­tion does, in fact, con­sider it in­ap­pro­pri­ate for the Dis­trict to ac­cess these funds for any­thing other than work­ers’ com­pen­sa­tion. That was a prac­tice used in the pre­vi­ous ad­min­is­tra­tion that has been dis­con­tin­ued un­der Mayor Gray.”

The Gray ad­min­is­tra­tion did not respond to mul­ti­ple re­quests to in­ter­view Mr. Goulet or DOES Di­rec­tor Lisa Mal­lory.

Coun­cil staffers for Kwame Brown called the bud­get ma­neu­ver a “color of money is­sue” and an “ac­count­ing ex­er­cise” that was not in­tended to limit or re­duce the work­ers’ com­pen­sa­tion pro­gram. How­ever, be­cause the coun­cil al­ready had ap­proved the fis­cal 2012 bud­get, which au­tho­rizes only $3.8 mil­lion of the $13.4 mil­lion in “swept” funds to be re­placed in the work­ers’ com­pen­sa­tion pro­gram, an “un­in­tended con­se­quence” of the ma­neu­ver is that the coun­cil must pass leg­is­la­tion to au­tho­rize the re­main­ing $9.6 mil­lion.

Kwame Brown did not respond to nu­mer­ous re­quests for com­ment.

Last week, Mr. Gandhi’s of­fice said that pend­ing coun­cil leg­is­la­tion to au­tho­rize re­place­ment of the work­ers’ com­pen­sa­tion pro­gram funds, which it in­sists did not in­clude money that would af­fect work­ers’ ben­e­fits, the re­main­ing $9.6 mil­lion can­not be ac­cessed for gen­eral bud­getary pur­poses.

“Such trans­fers of funds from re­stricted ac­counts into gen­eral funds had been ap­proved by the mayor and coun­cil in past years,” Gandhi spokesman David Uman­sky said in an email. “The Work­ers’ Com­pen­sa­tion Ad­min­is­tra­tion fund had been among those af­fected in the past as well.”

Asked whether the re­quest for the bud­get ma­neu­ver was ap­pro­pri­ate, Mr. Uman­sky wrote, “This is a pol­icy decision for the mayor and coun­cil,” adding that the funds ei­ther will be re­turned to the work­ers’ com­pen­sa­tion fund or de­posited as un­re­stricted funds into the city’s cash flow and re­serve fund.

As for other re­stricted funds that were moved at the re­quest of the mayor’s bud­get di­rec­tor, Mr. Uman­sky wrote, “The mayor is now propos­ing to put some of the dol­lars back into their pre­vi­ous agency funds. Coun­cil will agree or dis­agree.”

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