Democratic Senate loss puts more uncertainty stimulus money in Maryland budget

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Health care uncertainty puts Md. stimulus in limbo

ANNAPOLIS, Md. — The uncertainty surrounding national health care legislation after a Republican Senate victory in Massachusetts could have direct implications on Maryland’s budget, which was formally released to the Maryland General Assembly on Wednesday.

The $12.7 billion operating budget fills in a $2 billion shortfall by using a mix of cuts, fund transfers, debt and anticipated federal stimulus money.

Gov. Martin O’Malley, a Democrat, built into the budget an assumed $389 million in additional federal stimulus money through Medicaid that is in the U.S. House of Representatives health care reform legislation.

But now President Barack Obama and congressional Democrats may try to scale back the president’s health care overhaul. The reason is Democrats lost the party’s 60th Senate seat needed to cut off debate to push through legislation after Republican Scott Brown defeated Democrat Martha Coakley on Tuesday in the seat once held by the late Sen. Edward Kennedy.

Shaun Adamec, an O’Malley spokesman, said the O’Malley administration is optimistic some form of aid will come from the federal government to help states recover from the national recession.

“What form that takes is up to Congress, but we’re fairly confident that at the end of the day that money will be realized,” Adamec said.

O’Malley, when asked Tuesday about whether he had a backup plan if the stimulus money fell through, said he didn’t have any ideas right away. But O’Malley noted the administration has had to adjust the budget with cuts at the Board of Public Works seven times to make up for drops in revenue since he became governor in 2007.

“We’ll figure it out,” O’Malley said, adding: “We always have, which is why we have a Triple A bond rating and why the three rating agencies have all mentioned how decisively and quickly we’ve been able to react as a state to revenue writedowns.”