Maryland's Board of Public Works on Wednesday approved a scaled-back version of a plan that Gov. Larry Hogan proposed last week to trim the state's budget as part of an effort to prepare for future shortfalls.
The modified proposal, posted online Wednesday morning, came after several Democratic lawmakers and the state Democratic Party said the governor's initial proposal bypassed the regular budget process and wrongly diverted extra money from individual jurisdictions.
Hogan said state budget officials “sat down and discussed it, made some adjustments, and I think it’s something that we can all be proud of.”
The original plan called for trimming about $6 million in “disparity grants” for low-wealth jurisdictions that struggle to raise revenue through local taxes. It included a reduction of $4 million in the state’s $31 million in assistance for Prince George’s County, and a $1 million reduction in the $79 million in aid slated for Baltimore. Both jurisdictions were counting on the money to supplement their schools budgets.
The new plan eliminates the proposed reductions to disparity grants, along with cuts of $200,000 for historic preservation and $150,000 for the Maryland Humanities Council.
Sean Johnson, legislative director for the state teachers union, applauded the revisions but called on Hogan to “stop playing games with school funding and start making real progress in getting our students what they need to be successful.”
The governor frequently answers such criticism by noting that all of Hogan’s budgets have fulfilled the state’s K-12 funding formulas and increased overall spending on schools.
State Budget and Management Secretary David R. Brinkley described the approved reductions as a “down payment” on addressing Maryland’s projected $750 million shortfall for the next fiscal year, which begins in July 2018.
The cuts, which amount to less than 0.2 percent of the state’s $43.5 billion budget, range from 0.06 percent to 2.53 percent of budgeted spending for each department.
Examples include lowering state health department expenditures by $22 million, nearly half of which is supposed to come from a decline in the average length of hospital stays; eliminating 30 vacant positions at public higher-education institutions to save $8 million; and trimming $8 million from the Department of Public Safety and Correctional Services by not filling open jobs.
House Appropriations Committee Chair Maggie McIntosh (D-Baltimore) criticized Hogan last week for proposing the cuts early in the fiscal year, when the legislature is not in session and cannot weigh in. Previous administrations have not proposed such cuts unless the state is running a deficit in the current fiscal year.
A day after Hogan unveiled the cuts, the comptroller's office reported that state general-fund revenue for fiscal 2017, which ended June 30, was $90.3 million above previous projections, or 0.5 percent more than analysts had forecast.
On Wednesday, Brinkley said the midyear cuts are necessary despite that modest surplus, because of the shortfall projected for next fiscal year.
Any notions to the contrary “betray a fundamental misunderstanding not only of sound budgeting principles but also the serious challenges this state faces in the next few years based on its current spending patterns,” Brinkley said.
While the state averages 3.4 percent revenue growth each year, he said, spending has increased 5.6 percent annually on average, and expenditures for the next fiscal year are set to grow by 8 percent.
Brinkley and Hogan blame mandated spending increases for the imbalance. Hogan has pushed to reduce such automatic upticks in funding since taking office, but the majority-Democratic General Assembly has blocked his efforts.
During the Board of Public Works meeting, Kopp said spending mandates largely cover education and public health. She noted that the governor and General Assembly regularly balance the budget by the end of the state’s annual legislative session despite facing projected shortfalls.
Franchot, in explaining his support for the administration’s final proposal, said that “having a conservative, cautious approach to fiscal matters in the state is a line of defense for our taxpayers.”
This story has been updated to reflect that Prince George’s County’s original allocation was $31 million and that Baltimore’s was $79 million. In an earlier version of the story, the Prince George’s and Baltimore allocations were transposed.
