Maryland Gov. Martin O’Malley (D) will offer a plan Wednesday to erase a shortfall of more than $400 million in the state’s current-year operating budget, exactly two weeks before Gov.-elect Larry Hogan (R) is sworn in.
O’Malley plans to propose about $203 million in cuts to the state’s roughly $16 billion general fund budget during a meeting Wednesday of the Board of Public Works, aides said. The three-member panel, which is authorized to make budget cuts when the General Assembly is not in session, is meeting for the final time before O’Malley leaves office Jan. 21.
The outgoing governor plans to offer $199 million more in fund transfers and budget cuts after the General Assembly convenes next week for the start of its three-month legislative session, said O’Malley spokesman Ron Boehmer. Those actions would require legislative approval.
According to people who have been briefed on O’Malley’s plan, the package includes reductions in spending by state agencies, colleges and universities, as well as reductions to providers participating in the state Medicaid program, which provides health insurance for the poor and disabled.
The two steps together will close the budget gap in the fiscal year that ends in June, according to O’Malley aides. Hogan still would inherit a projected shortfall of about $750 million in the coming fiscal year, which starts in July.
The new governor’s budget proposal for the coming year is due to be presented to the General Assembly two days after he takes office, and Hogan has warned that he may need to make major cuts to bring it into balance.
O’Malley aides said previously that the administration planned to take steps to slow spending in the current fiscal year. On Tuesday, Boehmer said the cuts would be the latest “difficult choices” that O’Malley has made during an eight-year tenure in which he has made repeated trips to the BPW to make midyear budget reductions amid the recession and recovery.
“We are acting now to ensure the overall fiscal health of Maryland,” Boehmer said.
The BPW consists of O’Malley, Comptroller Peter Franchot (D) and Treasurer Nancy K. Kopp (D).
Hogan spokesman Adam Dubitsky declined to comment Tuesday night on O’Malley’s plans. In recent weeks, Hogan has said he is inheriting a “serious fiscal situation” as he prepares to take office after a campaign in which he blasted O’Malley for overspending and promised to roll back taxes.
Boehmer offered few details Tuesday night on O’Malley’s proposed cuts. He said the governor is proposing no layoffs but will offer voluntary retirement incentives and eliminate vacant positions. Those proposals are expected to save close to $38 million.