ANNAPOLIS, Maryland — Maryland Gov. Larry Hogan announced that his 2018 budget proposal includes less spending, in real dollars, than last year’s budget but includes “no serious cuts to any agencies or programs” and no new taxes.
The governor said this was accomplished by making minor cuts to programs that were providing fewer services and by drawing on money appropriated for the state’s “rainy day” fund.
When asked about the kinds of programs that did lose some amount of funding, Department of Budget and Management Deputy Secretary Marc L. Nicole used Maryland’s Temporary Cash Assistance Program as an example. He said the program, which provides cash assistance to poor families with dependent children, has a declining case load, which allowed the governor to cut its budget without reducing services.
Delegate Tawanna P. Gaines, D-Prince George’s, vice chair of the House Appropriations Committee, told the University of Maryland’s Capital News Service Tuesday that she was looking forward to seeing the whole budget but that “it’s kinda hard to believe we could spend less when there’s a deficit.”
Hogan chastised the legislature for adding mandated spending increases during the 2016 session, saying that Maryland is already in a position where spending is outpacing revenue and called for bipartisan efforts to address overspending.
The governor claimed that much of the budget is on “autopilot” due to the amount of spending, approximately 83 percent, that is allocated by legislative mandates.
He said “every Marylander understands that if you are consistently forced to spend more than you take in, eventually, you are going to have a problem.”
Specific figures are not yet available, but the governor’s office says this year’s proposed operating budget totals $17.1 billion.
Hogan said his budget this year would total less than last year’s proposal; he is required by law to release specifics on Wednesday.
The governor announced two bills on his agenda designed to curb required spending and to mandate savings in the state’s “rainy day” fund.
The Common Sense Spending Act would place limits on mandated spending and enable the reduction of mandates that increase spending faster than state revenues grow.
The Fiscal Responsibility Act would automatically add budget surpluses to the state’s “rainy day” fund, preventing the government from spending unpredicted surplus revenue. The fund, formally known as the Revenue Stabilization Account, is where the state stores money, often surplus revenue, for future use.
Hogan said this would help stabilize spending and revenues by ensuring that the fund gets replenished during richer years to so that it is available to offset losses in leaner years.
The governor said that debt service payments are the fastest growing line item in the budget and will soon be more per year than the state spends on school construction.
Hogan, a Republican, called the rising cost of debt service “devastating” and laid blame for it on the policies of his predecessor, former Gov. Martin O’Malley, a Democrat.
Senate Minority Leader J.B. Jennings, R-Baltimore and Harford counties, said he thinks “it’s a pretty good budget” and that he was not concerned about the budget drawing from the “rainy day” fund. “That’s what the money is there for and let’s be honest,” Jennings said, gesturing out the door of the State House where a steady drizzle was falling, “it’s raining.”
Sen. Joan Carter Conway, D-Baltimore, said her focus would be on ensuring that education remains a funding priority. She also said she plans to take a look at the budget’s funding for transportation and infrastructure in Baltimore, but did not offer specifics.
At a press conference Tuesday morning, Hogan touted that the budget spends more on Baltimore City than anywhere else and funds programs there for which no other area receives state monies.
Hogan also said that no funding has been allocated by the state for reforms in the Baltimore City Police Department. Former Baltimore Mayor Stephanie Rawlings-Blake requested $30 million for that purpose in 2016, but Hogan said her request has since been rescinded and that Baltimore Mayor Catherine Pugh has not made a similar one.
Hogan did not offer specifics, but implied that certain legislatively required spending was not included in the budget by saying that he would put forth a budget reconciliation and financing act, which would modify the value of certain spending mandates to create a balanced budget.
For example, the governor’s 2015 budget reconciliation and financing act proposed reductions in dozens of funding items ranging from a 25 percent reduction in the cyber security tax credit to lowering and slowing mandated funding increases for libraries.
Delegate Maggie McIntosh, D-Baltimore, chair of the House Appropriations Committee, said that “what (Hogan) has outlined is the good news” and that the “bad news” and cuts will be in the governor’s forthcoming budget reconciliation and financing act.
Total operating budget: $17.1 billion
Maryland Medicaid program: $11 billion
K-12 education investment: $6.4 billion
Transportation infrastructure and economic development investment: $2.8 billion
Funding for mental health and substance abuse disorder services: $1.3 billion
University System of Maryland funding: $1.35 billion
Community college funding: $256 million
Chesapeake and Atlantic Coastal Bays 2010 Trust Fund: $51.3 million