ANNAPOLIS – Gov. Larry Hogan bemoaned the fact that one of his legislative priorities, mandated spending relief, has been put on the back burner for the first half of the legislative session while the General Assembly focused on bills he categorized as “trivial” and “insignificant.”
Hogan said the legislature in the first half of its session introduced 85 new proposals that would cost the state $3.7 billion — or $80 million for each of those 45 days — though it is unlikely that all of those bills will become law. Thursday was the 56th day of the session.
The governor has often complained that the spending mandates passed by the General Assembly have constrained his ability to create a balanced and responsible budget, noting that 83 percent of the operating budget is already accounted for each year because of legislative action, which he calls budgeting on “autopilot.”
Hogan, a Republican, may have put fissures in the already strained relationship between himself and the Democrat-controlled General Assembly, calling them “reckless” and “fiscally irresponsible.”
The General Assembly cannot add money to the budget, it can only subtract. Mandates, in which lawmakers use legislation to set funding levels for various programs, are one of the only ways for legislators to set priorities in the budget.
“They don’t seem to be taking reducing mandated spending increases very seriously,” Hogan said in a news conference Tuesday. “It appears that some members of the General Assembly are choosing to ignore fiscal responsibility altogether.”
The governor has introduced legislation in the House of Delegates and the Senate, through leadership in each chamber, to scale back mandated spending in the budget.
Senate President Thomas V. “Mike” Miller Jr., D-Calvert, had no comment on the governor’s legislation.
Beginning in fiscal year 2019, Hogan’s bill would only allow an increase in mandated spending levels in years where revenue is expected to grow at least 2 percent from the preceding year.
If growth doesn’t reach 2 percent, the governor may set the budget using the mandated formulas from the 2018 fiscal year.
The exceptions to that are K-12 education, funding to the rainy-day fund, debt service payments and pension obligations. These areas can still be fully funded even in slow growth years, under Hogan’s proposal.
“The vast majority of people would hate to see the Cade formula deconstructed in the bill, which is aid to community colleges,” Busch told reporters Tuesday. Higher education funding is not among the exceptions.
Under Hogan’s bill, if the General Assembly wanted to create new spending mandates, it would have to go back and repeal an equal amount, in dollars, of other mandates.
In previous years, when a governor needed more flexibility in creating the budget, he would introduce a Budget Reconciliation and Financing Act, known as BRFA, which is a 365-day bill that changes the mandated formulas for that year, essentially a way for the governor to work around the mandates.
“The ‘berfa’,” Budget and Management Secretary David Brinkley told the House Appropriations Committee, using a common pronunciation, “is a wildcard in poker.”
Unlike other bills introduced in the session, the public does not have the opportunity to testify about the BRFA, Brinkley said. The BRFA bill, which legislators can amend, adjusts spending for many agencies.
Currently, the governor has nearly all the power when it comes to the budget, and, Brinkley said, he has the most power of any governor in the country.
Each year, Brinkley said, mandated spending accounts for an almost 5 percent increase in spending, which he said isn’t feasible in years that don’t see enough growth.
“We’ve had a really good year,” in which the state revenues were substantial, Brinkley said, but cautioned: “That can’t continue.”