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Maryland Slashes Stem Cell Budget by Another $3M in Plan to Trim $700M Budget Deficit

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By Alex Philippidis

Maryland will cut its stem-cell budget for the fourth time in the past 15 months, as well as eliminate nine positions at its economic development agency, in the first phase of a cost-cutting plan approved Wednesday by Gov. Martin O'Malley.

The $281.5 million in cuts, enacted to help plug a shortfall of $700 million in the budget that took effect July 1, were approved unanimously by the Public Works Board, a panel of officials that oversee state spending, chaired by O'Malley and including Comptroller Peter Franchot and Treasurer Nancy Kopp. The board can make changes to the state budget when the legislature, known as the General Assembly, is not in session.

The state's Stem Cell Research Fund will shrivel by $3 million, leaving it with $12.4 million. That's about half of the $24 million available during the fiscal year that ended June 30, 2008. Since then:

• O'Malley and legislative leaders sliced $5 million from the stem cell program in April 2008, when they hammered out the budget for the fiscal year that ended June 30;
• The public works board cut another $1 million in October 2008 [BRN, Oct. 20, 2008];
• O'Malley and legislative leaders chopped $3 million this past April while crafting the budget for this fiscal year, which began July 1.

O'Malley, a Democrat expected to seek re-election next year, also added $400,000 to the program in January, around the time he submitted his budget proposal for FY 2010.

O'Malley has blamed the weak economy for the cuts, as well as the waves of budget reductions the state has undertaken since last year. Before the current economic upheaval began last September, the governor envisioned spending $20 million in FY '10 and each of the following nine years on the stem cell program, as part of his $1.3 billion, 10-year BIO 2020 initiative.

The latest cost-cutting package also includes cutting $40 million from the University System of Maryland, Morgan State University and several private colleges. Also to be cut are 39 state positions — of which nine are at the Department of Business and Economic Development. Seven staffers will be laid off, at a savings of $550,000, while two vacant positions will be eliminated.

The seven held jobs at two state "welcome centers" and DBED's business development office, Karen Glenn Hood, a DBED spokeswoman, told BioRegion News.

Maryland will also cut $1.1 million from its Tourism Development Board, leaving it with $4.9 million; $5.5 million from the state lottery's advertising budget, leaving it with $11.8 million; and $24 million in Medicaid payments to health care providers, including hospitals and nursing homes — but expects to more than recoup that loss with $75 million from the $787 billion American Recovery and Reinvestment Act, signed by President Obama in February.

O'Malley plans to further reduce state spending by another $470 million later this year, and said at a July 21 news conference he will submit plans for one or more additional cost-cutting phases following talks with unionized state workers and local governments, according to numerous local news reports.

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