Maryland Gov. Larry Hogan on Tuesday promised a $43.5 billion state budget that would shrink spending and close an estimated $750 million deficit, yet increase funding for key programs such as education and the public safety net.
The governor also proposed bills aimed at avoiding future funding shortfalls by reining in automatic spending increases — something Democrats rejected last year — and requiring the state to save more money when it has excess revenue.
Hogan (R) said his plan — which will be released in full on Wednesday — would balance the budget without raiding special funds such as the Transportation Trust Fund, and without raising taxes or making major cuts to services.
“Because of the fiscal restraint that we’ve instituted over the past two years, while many other states are facing crippling budget shortfalls, we are in much better shape today than we would have been,” Hogan said.
The governor outlined his budget at a news conference after giving fiscal leaders a general overview during a breakfast at the governor’s mansion.
Senate President Thomas V. Mike Miller Jr. (D-Calvert) described the governor’s plan as a “good news budget.” But he and the legislature’s Democratic fiscal leaders said they are waiting to see what cuts the governor proposes in his budget-reconciliation bill, a measure that generally involves tweaking the state’s annual funding formulas during years when revenue falls short of projected levels.
“It’ll be interesting to see the details,” said Sen. Richard S. Madaleno Jr. (D-Montgomery), vice-chair of the Senate Budget and Taxation Committee.
The state faces estimated budget deficits of $209 million for fiscal 2017 and $544 million for fiscal 2018, based on the latest revenue forecast in December and spending projections by legislative analysts.
Hogan said he plans to close the gap in large part by tapping into reserve funds and with savings from his decision last year to withhold $82 million that Democrats fenced off for special purposes. He said he would leave $1 billion in reserves and trim “almost nothing” from agency budgets.
“It sounds too good to be true, but it is true,” he said. “There are no serious cuts.”
State budget officials said the governor’s plan would trim state operating expenditures, which totaled $17.1 billion in fiscal 2017, by about $20 million. They said the capital budget would remain the same at just under $995 million.
For education, Hogan said, his plan would fully fund the state’s spending formulas for K-12 and community colleges while pumping an additional $17.5 million toward the University System of Maryland to hold tuition increases to 2 percent.
He said his budget would also bolster the state’s social safety net, providing additional money to help individuals who are battling heroin and opioid addiction, increase the number of treatment beds for drug-abuse patients and provide a 2 percent bump in thereimbursement rate for care providers who work with vulnerable residents, including the developmentally disabled.
The governor’s plans also call for tax relief for military retirees, police, firefighters and emergency-response personnel, something he has proposed in the past without success.
Hogan said Baltimore will receive more financial support from the state than any other jurisdiction, including continued funding for a blight-removal program.
But House Appropriations Committee Chairman Maggie L. McIntosh (D-Baltimore) left the breakfast with Hogan saying she was concerned that his budget would leave out spending on various programs that the legislature approved last year to help Baltimore, including a scholarship program for the city’s youth, money for parks and funding for after-school and library programs.
Maryland had a budget surplus last year, and the governor’s 2016 spending plan sailed through the General Assembly with little contention. Fiscal leaders said snags are possible this year because of the upcoming budget-reconciliation bill, which could lead to battles over spending priorities.