Maryland Governor Counting on Stimulus Funds to Help Close Gap

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WASHINGTON - Maryland Gov. Martin O'Malley has delayed some program cuts and is already counting on receiving funds from the economic stimulus package to help close the state's $2 billion budget gap for fiscal 2010, even though Congress has yet to pass the legislation.

In his state of the state address to lawmakers yesterday, O'Malley invoked President Obama's name and the stimulus package as a remedy to the state's fiscal woes.

"It is my hope, and it is my belief, and it is my expectation that the balanced budget we were required by law to submit this month will be a better budget by the time it's up for final consideration in April," O'Malley said. "Why? Two reasons. Barack Obama."

The House on Wednesday passed its $819 billion stimulus bill, which will provide billions of dollars of aid to states, but the Senate is not expected to take up its $888 billion version of the legislation until next week.

"Thanks to the tough decisions we've made together over these last two years, the state of our state is once again strong enough to overcome the very challenging times at hand," O'Malley said during the 30-minute speech. "And with the inspired leadership of our new president, Barack Obama, we finally have a federal partner who shares our commitment to progress."

O'Malley laid out his fiscal 2010 spending plan last week and proposed closing the $2 billion gap with layoffs and spending cuts. Though he already included $350 million of expected federal stimulus dollars in that plan, he said this week that he now expects the stimulus funds to total more than $1.5 billion for the state for fiscal 2010.

The governor said he was delaying reductions in the aid to community colleges and other local aid for fiscal 2009 until after the President's Day holiday next month "amid speculation that the American Recovery and Reinvestment Act could provide close to $4 billion in economic relief for Maryland [over a two-year period], including more than $1.1 billion for public education."

Under the stimulus legislation pending in Congress, Maryland should receive up to $1.1 billion for education, and more than $660 million for energy assistance and conservation programs, workforce development funds, and community development block grants, according to the governor's office.

In addition, Maryland could get more than $1 billion of funding for Medicaid relief, public safety grants, and more than $1 billion for infrastructure projects, including highway and mass transit projects, water and wastewater projects, and school construction, state officials said.

"We will continue to work with our federal partners and the Obama administration to make sure Maryland has up-to-date information regarding the federal stimulus package that we are prepared on day one to put shovels in the ground as funds are approved," O'Malley said in a news release. "We have worked hard to protect our priorities even during this national economic downturn and we are hopeful that Congress will act quickly to approve this legislation that could provide up $4 billion in economic relief to Maryland."

While the governor has not proposed any additional bond financing to close the state's budget gap, he took time during his speech yesterday to tout the state's gilt-edged rating and to say that the state is in a better position than others "to climb out of this national recession."

"We remain one of only seven states to earn a triple-A bond rating," he said.

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