From the Desk of John R. Griffin

Greetings.

At this morning’s cabinet meeting, Governor O’Malley and Budget Secretary Foster outlined for us new steps that all state agencies will be asked to take as we prepare to close out the FY’ 07 budget and implement the budget for FY ’08. We are still awaiting specifics; however, because some of what was discussed may be addressed in the media soon, I wanted to immediately share with you what we know at this point.

Because of continuing discrepancies between revenues and costs, the governor’s plan includes three components: (1) grow the economy, (2) increase revenues and (3) reduce spending. Immediately, he and Secretary Foster have set two goals. For FY ’07, they will work across agencies to attempt to increase reversions (money left unspent at the end of the fiscal) from the planned $20 million to $45 million. This will be accomplished through review of reversions from agencies, with a focus on evaluating existing encumbrances. For FY ’08, the Governor has set a target of $200 million in general funds to be cut from the approved budget and each agency will be given a specific target to meet.

Once we receive this information, we will convene a special meeting of the Leadership Team to discuss in more detail our approach to meeting the target for DNR. That is likely to happen early next week.

Under these circumstances, Eric and I have decided to delay our communication summarizing organizational changes that were announced in Tuesday’s Leadership Team meeting. While the core line elements of the plan and personnel appointments will not change, we do want to revisit our proposed structure to ensure we are able to meet these additional priorities.

I know these budget challenges are not new, and are certainly not welcome as we anticipate new opportunities; I expect that we will meet them as we always have and not allow them to deter us from our ultimate goal. We will continue to pursue a dual approach to our budget challenges: first, to do the best we can by prioritizing the current resources available to us, while second, and more importantly, continuing on our broader effort to secure the funding necessary to fully do the job in front of us for the people and natural resources of Maryland.

Thank you.

John