‘Doomsday’ budget used as club
$800 million in cuts proposed
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.”