Maryland Senate passes $39 billion budget that boosts pay, trims pension contribution

The Maryland Senate on Thursday passed an approximately $39 billion budget that would raise state spending by about 3 percent, boost the pay of government employees and reduce the amount of money paid into the state pension system.

Sen. Edward J. Kasemeyer (D-Baltimore County), who chairs the Budget and Taxation Committee, said the budget passed by the Senate slightly trimmed spending proposed by Gov. Martin O’Malley (D).

It will leave a larger balance in government coffers than O’Malley’s proposal and takes into account lower-than-expected revenue projections since O’Malley unveiled his budget in January. This month, the Board of Revenue Estimates, citing a sluggish economy, reduced estimates of state revenue by nearly $127 million in fiscal 2014 and $111 million in fiscal 2015, which begins July 1.

Instead of paying $300 million a year more than required into the state pension system, the Senate’s budget would contribute only $100 million extra in fiscal 2014 and in fiscal 2015.

The budget, which passed 41 to 6, will now be considered by the House of Delegates.

O’Malley proposed permanently reducing the supplemental pension payment to $200 million and using the remaining money to support current needs.

Under the Senate version, however, the supplemental payment would be restored in phases, reaching $300 million by 2019.

The supplemental payment is part of an overhaul enacted three years ago that required public employees to pay more of their salaries into the state’s underfunded pension system and that reduced benefits for new hires.

The Senate’s budget would boost higher-education funding by $103 million, or about 8 percent, to about $1.4 billion, enabling colleges and universities to hold tuition increases to 3 percent.

The budget would increase state spending on kindergarten through 12th grade by $124.5 million, or 2.4 percent, to $6.1 billion.

The budget would provide a 2 percent cost-of-living increase for state employees, fund full-year merit raises for the first time since 2009, and allow them to skip paying health insurance premiums for an additional four pay periods.

Both the Senate committee’s and governor’s version of the budget set aside about $795 million for a rainy-day fund. But the Senate’s budget would create a bigger cushion for unanticipated costs. The Senate version would also reduce the state’s structural deficit by $176 million, Kasemeyer said.

Senate Minority Leader David R. Brinkley (R-Frederick) said during Wednesday’s floor session that the budget still spends too lavishly and asks too much of Maryland taxpayers at a time when the economy is poking along.

He proposed several purse-tightening amendments, such as an across-the-board 1 percent spending cut.

Brinkley also used the budget process to call for a timely audit of the state’s botched rollout of its health insurance marketplace, established in response to the federal health-care overhaul. He expressed frustration at what he characterized as the administration’s lack of transparency about the Maryland Health Benefit Exchange’s launch.

Brinkley proposed an amendment to withhold $500,000 from the exchange’s budget until the Office of Legislative Audits conducts a performance audit, and he sought to require an audit report by Oct. 1 — before a new governor is elected in November.

Like his other amendments, however, the proposal died.

The six nay votes on the budget came from Republican Sens. Barry Glassman (Harford); Stephen S. Hershey Jr. (Kent); Nancy Jacobs (Harford); J.B. Jennings (Baltimore County); Edward R. Reilly (Anne Arundel) and Bryan W. Simonaire (Anne Arundel).

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