Annapolis bracing for special session

Holding on to state aid is focus of battle for many

But lawmakers aren’t sure the governor will be ready.

‘‘As of today, it appears less likely than likely to happen,” said Sen. Rona E. Kramer (D-Dist. 14) of Olney. ‘‘There is a great distance between the governor and the House and the Senate.”

If a special session is not called, counties should prepare for the worst, House Speaker Michael E. Busch warned Wednesday.

‘‘If it [special session] doesn’t happen, the County Council members, the county executives better be engaged, because if it doesn’t happen, cuts are coming to them,” said Busch (D-Dist. 30) of Annapolis. ‘‘... It’s going to be a doomsday budget.”

O’Malley has said counties would not have to bear the brunt of the deficit solution, though some Montgomery lawmakers have expressed concern that the county could be saddled with $108.6 million in teacher pension costs now paid by the state.

‘‘The governor has said time and time again that he is not going to cut the locals to any great extent,” Kramer said.

‘‘In the end, the proof is in the pudding,” said Patrick K. Lacefield, spokesman for Montgomery County Executive Isiah Leggett (D), who was in Israel this week.

Montgomery is facing a projected $307 million deficit of its own. County leaders have not been specific about how to fill the gap, but they are wary of an O’Malley proposal to restructure the state income tax that would significantly affect Montgomery, which has a large population of high-income residents.

‘‘We’re very concerned with the [governor’s] proposal and the degree to which income tax is being raised,” Lacefield said. ‘‘We’re concerned with the unintended consequences of hurting our competitiveness in the Washington metropolitan region and hurting our status as the state’s economic engine.”

A GOP solution

There is an alternative to the doomsday budget, said House Minority Leader Anthony J. O’Donnell, referring to a worst-case scenario budget prepared by state budget analysts, featuring cuts and no new revenue.

‘‘I don’t think we need the doomsday budget if we do the Republican plan,” said O’Donnell (R-Dist. 29C) of Lusby.

The plan proposed by the House Republican Caucus calls for limiting growth of the state’s $15 billion operating budget to 3.5 percent in fiscal 2009, which begins July 1. That compares with the 8.5 percent increase projected by state budget analysts.

The GOP plan also calls for curtailing projected spending on education, Medicaid, aid to local governments and other programs and uses $600 million from licensing 15,000 slot machines at six to-be-determined venues.

Even O’Donnell sounded skeptical that the legislature would seriously consider the proposal.

‘‘I’m not sure there’s the backbone in leadership or the executive branch to implement that,” he said.

Cuts to schools could take the form of teacher pensions thrust back on the counties, lawmakers say. School systems are already tallying how much they could stand to lose under O’Malley’s proposal to freeze an inflation index that is part of the $1.3 billion Thornton school funding law and to phase in a geographic cost of education index, or GCEI.

Last week, Prince George’s County schools Superintendent John E. Deasy said his budget could be cut by as much as $65 million next school year if it does not get GCEI funding and the inflation index is cut.

The Montgomery school system, the state’s largest with 137,000 students, stands to lose about $49 million, including $30 million without GCEI. The county would lose $39 million if GCEI were phased in at 30 percent in fiscal 2009, as O’Malley proposes.

The 10,000-student Allegany County school system could lose about $2.2 million without the inflation index, according to the state Department of Legislative Services estimates. Allegany would not receive any GCEI money, which is reserved for counties where the cost of living is highest.

The 27,000-student Charles County school system faces about $4.5 million less without the inflation index and $3.5 million if GCEI is not funded.

That does not sit well with the legislature’s education advocates.

‘‘Why would it be wise now to roll back our funding commitment to our most important expenditure — K-12 education?” said Sen. Richard S. Madaleno Jr. (D-Dist. 18) of Kensington, who lobbied for Montgomery County during Thornton’s crafting in 2002.

Protecting the vulnerable

Advocates for Children and Youth wants to make sure school systems are directing Thornton funding directly at programs that help at-risk students, said Matthew Joseph, the Baltimore group’s executive director.

But ACY is also focused on the big picture of how O’Malley’s plan addresses ‘‘the working poor,” he said.

The group’s top priority is to ensure funding for an enhanced earned income credit. O’Malley would expand the tax credit to 25 percent for working families.

‘‘What we don’t want is the sales tax to go through and all these other things to go through and then the earned income tax, which is what we think is the offset for working families for all these other tax proposals, to not go through,” Joseph said.

Education advocates are far from alone in trying to get O’Malley’s attention as anxiety builds over his budget proposals.

Advocates for the developmentally disabled have lobbied unsuccessfully for a meeting with the governor.

Anticipating tough times, O’Malley this year funded $12 million — half of a $24 million cost of living increase in fiscal 2008 — for disability services and daycare programs provided by community-based providers.

‘‘We feel like we already took a cut because providers didn’t get the increase they were promised,” said Laura Howell, executive director of the Maryland Association of Community Based Services for Persons with Developmental Disabilities.

A $280.7 million package of cuts recommended by O’Malley and approved by the Board of Public Works in July took the greatest slice out of the Department of Health and Mental Hygiene: $1 million in state funding and, by default, a $1 million matching fund, to pay for continuing services for the developmentally disabled temporarily removed from residential programs.

‘‘The community-based system can’t afford to continue to take those kinds of hits,” Howell said.

Meanwhile, the state has 16,000 people with developmental disabilities awaiting services.

The voices of the developmentally disabled are seldom heard in the budget debate, said Missy Perrott, a former resident of the Great Oaks Center in Prince George’s County, who has cerebral palsy.

‘‘The people living in the institutions, they don’t get to participate in the debate,” she said during a rally on Lawyers Mall on Wednesday, advocating the closure of Rosewood Center in Owings Mills, the much-maligned center for the developmentally disabled. ‘‘... It seems that the voices of the people who lived on the other side of the walls of the institution should carry more weight.”