STATE GOVERNMENT

House Approves $31 Billion Budget Along Party Lines

By John Wagner
Washington Post Staff Writer
Friday, March 21, 2008

The Maryland House of Delegates approved a $31.2 billion budget yesterday, after an at-times heated debate over whether lawmakers were leaving enough reserve funds to weather the effects of a sluggish economy in the coming fiscal year.

The budget bill, which passed 105 to 34, calls for deeper spending reductions than the version that cleared the Senate last week. House Democrats said they are maintaining important investments in education and other programs while setting aside nearly $1 billion in the rainy-day account and other reserve funds.

"This is a very good budget, and we are well-prepared for whatever may come in the future," Del. John L. Bohanan Jr. (D-St. Mary's), a leading member of the Appropriations Committee, told his colleagues during the floor debate.

Republicans questioned whether spending had been reduced enough, pointing to a revised revenue forecast this month that said the state would take in $333 million less than expected during this fiscal year and the one that begins in July.

House Minority Whip Christopher B. Shank (R-Washington) said the state could be forced to make midyear budget adjustments if the economy remains soft and revenue estimates are revised downward again.

"Are we setting ourselves up for drastic cuts? Are we setting ourselves up for even more taxes? I would submit we are," Shank said, alluding to a special session in November in which lawmakers raised taxes by $1.4 billion annually as part of an effort to fix the state's long-term financial situation.

Thirty-four of the chamber's 37 Republicans voted against the budget yesterday. All 102 Democrats who were present voted in favor.

The budget will head to a conference committee, where leaders of the House and Senate must resolve several dozen differences. Lawmakers in both chambers, which are controlled by Democrats, have said the exercise should not prove too difficult.

High-profile differences include spending on stem cell research next year. The House budget provides $15 million for grants to researchers, and the Senate bill offers $5 million. Gov. Martin O'Malley (D) had asked for $23 million.

The House budget also diverts significantly more money from a fund intended to be available for liabilities associated with state retiree benefits.

The greater challenge in the remaining 2 1/2 weeks of the session probably will be to find consensus over how to compensate for a $200 million loss in revenue if lawmakers decide to repeal the state's new computer services tax.

Neither version of the budget accommodates the repeal, although lawmakers could make the necessary adjustments in a separate fiscal bill. Ideas that have been floated to make room for the repeal include a surcharge on the income of millionaires, a diversion of transportation funds and additional budget cuts.


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