ANNAPOLIS - A panel of lawmakers agreed Tuesday to cut $162 million in state aid for local road maintenance.

The cut by a joint budget conference committee to highway road maintenance is one of the biggest single spending reductions to address the state's fiscal problems.

The committee had been considering cutting $102 million and taking another $60 million from local "piggyback" tax collections on the state income tax. But the piggyback tax cut has been avoided by taking the bigger reduction to highway aid.

The committee also agreed to cut $1 million in local treatment grants from the Department of Health and Mental Hygiene's Alcohol and Drug Abuse Administration, instead of a $2 million reduction the Senate advocated.

The conference committee made significant progress in working out differences between House and Senate budget legislation.

When lawmakers started Tuesday afternoon, the state's fiscal 2010 budget was still about $75 million in the red. They were $20 million shy of a balanced budget, though, and still have work to do.

Significant differences remain in funding stem cell research and Program Open Space, which uses part of the state's real estate transfer tax to buy public land.

Maryland's budget problems have been difficult this session because of a $1.2 billion plunge in revenue projections last month for fiscal years 2009 and 2010. State budget analysts are warning that the state's budget picture looks very ugly up through fiscal year 2014, with a projected deficit of more than $1 billion in each year.

The General Assembly is scheduled to adjourn Monday.