Maryland Gov. O'Malley proposes money transfer, few layoffs to close budget gap

O'Malley outlined his $12.7 billion budget Tuesday afternoon, ahead of its full introduction to the General Assembly on Wednesday morning.

The proposal shrinks the state government by 202 positions through layoffs and eliminating empty jobs -- bringing the total number of state jobs that O'Malley has axed to about 3,500. He said most of the layoffs would be in higher education. He also proposed furloughing state employees for 10 days again this year as well as freezing their salaries.

The budget also relies on $913 million from the state's capital funds, as well as $389 million in federal stimulus money and $85 million in slots revenue.

O'Malley said the state would restore funds taken from the capital budget, which is mainly used for transportation and construction projects, with the sale of bonds.