By Jonathan N. Crawford
Capital News Service
Friday, Jan. 18, 2007

ANNAPOLIS - In his first budget as governor, newly inaugurated Martin O'Malley on Thursday proposed spending $400 million in school construction but no new taxes in a budget he described as cautious and fiscally responsible.

"We are going to invest in our priorities . . . but not everything that we want to do is going to be possible in this year," O'Malley said.

The $30 billion budget - an increase of 2.5 percent over current spending - required O'Malley to use $967 million from the state's rainy day fund.

The governor had to work with revenues that were nearly $400 million less than anticipated, and he faces a projected structural deficit over the next four years of $4 billion.

He said that next year's budget will be even harder to balance.

O'Malley said his budget this year would not include millions in school aid for districts where education is more expensive, part of a reform plan known as the Thornton Commission. But he said he hoped to phase in this spending next year.

The budget he proposes follows through on O'Malley's campaign promise to freeze tuitions at state colleges and universities and to increase general fund support for higher education.

The $400 million he is committing to school construction programs will be, he said, the largest amount ever provided in a single budget.

The governor made it clear that he was not going to use his first day in office to ask Marylanders for a tax increase.

"I don't feel like after 24 hours I can go to the public and say, 'You need to cut us a bigger check,' " O'Malley said.

O'Malley also vowed to trim government spending by implementing structural reforms to increase government efficiencies. Some of the areas he proposed targeting for wasteful spending were the management of worker's compensation, contracts given to information technology and overtime and absenteeism by state workers.

Other areas of high priority in the budget were environment, health, jobs, economic growth and transportation.

He proposed funneling more than $400 million in environmental initiatives, including programs for preserving open spaces and bolstering water treatment facilities.

For transportation, O'Malley provided more than $1 billion for highway and road projects and set aside $300 million for public transit projects. He also earmarked $25 million for stem cell research and $100 million to strengthen Maryland's health care provider systems.

Copyright © 2007 University of Maryland Philip Merrill College of Journalism

Banner graphic by Hortense Barber; Maryland flag courtesy of ITA's Flags of All Countries. Martin O'Malley and Anthony Brown headshots are courtesy of the Maryland State Archives.