Gov.-elect Martin O’Malley may face a $413 million deficit upon entering office, despite short-term efforts by Gov. Robert Ehrlich to keep state budget woes in check, according to a report released this week by nonpartisan analysts.

If three years of state budget shortfalls over the past four years are any indication, higher education has reason to worry. With memories of painful cuts still fresh at agencies around the state, deficit news this year has already sparked talk of legalizing slot machines to bring in additional sources of revenue, especially with O’Malley’s platform full of campaign promises – among them, affordable tuition.

Budget cuts are especially familiar to state education officials, who witnessed the siphoning of millions of dollars from higher education when Ehrlich took office faced with a $1.3 billion deficit left by then-outgoing Gov. Parris Glendening in 2003.

Ehrlich’s cuts to the university system directly contributed to deep budget cuts here, dropping from $109 million in 2002 to $89 million in 2004, before springing back to $118 million in 2005. Students entering the university as freshmen in 2002 were paying 40 percent more by the time they were seniors.

But despite that history, university officials expressed cautious optimism that higher education funding would not be as negatively affected as four years ago. Because Ehrlich left office with a $2 billion surplus, higher education will not immediately feel the effect of the deficit, said university Chancellor Brit Kirwan.

“I don’t think it has dire implications for the next year because the state has a surplus of funds,” Kirwan said. “That’s not going to eliminate the structural deficit, but that does mean there’ll be money for the governor to put together a budget next year without substantial cuts.”

In the long run, however, Kirwan said higher education’s future will depend on a less certain variable: The policy choices of the new administration. Though Kirwan could not predict these choices, he expressed confidence that officials would explore fundraising options before January.

“After that, the problem gets more complicated,” Kirwan said. “Once the surplus is gone, it does raise a real policy issue for the state.

You’ve got a new administration, many new members in the General

Assembly … they can consider other alternatives. It’s a cause for real concern, but it’s not reason to be panicked at the moment.”

University Provost Bill Destler echoed Kirwan’s comments, saying that the state’s rainy day fund and future tax revenues must be considered before weighing the deficit’s impact. During Ehrlich’s term, the rainy day fund rose to $593 million, providing an additional source of budget-strain alleviation.

“At the present time, I don’t think there’s cause for significant alarm,” Destler said. “We haven’t seen proposals yet for dealing with the shortfall.”

The governor-elect’s camp also said O’Malley’s campaign promise to get a grip on rising tuition should hold through the deficit. O’Malley spokesman Rick Abbruzzese said the deficit is higher than he anticipated but said there are ways to work through it.

“We all knew there would be a deficit; all the projections were saying that. [But] it’s larger than folks anticipated,” Abbruzzese said. “The goal is to go in and make structural reform … to get more out of every dollar.”

Analysts say that while Ehrlich made significant cuts to major portions of the budget, the surplus was more the result of an economic boom and that the real problem of finding new sources of revenue for the state was never addressed.

One of the more popular solutions to the lagging state revenue over the past four years has been the now-infamous slots proposal, but

O’Malley refuses to see that as a viable option to offsetting the deficit, Abbruzzese said.

“If a limited slots bill passes, that [revenue] would go into capital projects, one-time expenses,” Abbruzzese said. Even if a bill passes, he said the state is “looking at least a year for slots to come to

Maryland and at least another year after that” before revenue comes in.

“Realistically, slots doesn’t solve the immediate budget problems,”

Abbruzzese said.

In separate interviews Wednesday, state Senate President Mike Miller and university lobbyist Ross Stern each said they believed tuition stabilization would be a reality in an O’Malley administration.

“That’s the reason I ran for office this time,” Miller said of

O’Malley’s bid for governor. “I’ve been around and seen a lot of changes. The last four years we really made no progress. Funding for higher education’s going to be at the top of our list.”

Contact reporter Raquel Christie and Owen Praskievicz at christiedbk@gmail.com.