A Maryland House committee Friday recommended to increase school funding, restore several programs for the poor and disadvantaged, cover a pay raise for state employees and cut the state’s payment to the employee pension plan next year to help pay for much of it.
The vote, which makes significant changes to Gov. Larry Hogan’s $40.7 billion budget proposal, was unanimous, a sign of bipartisanship within the Democrat-led General Assembly.
“A unanimous vote sends a message that both parties want to restore salaries, education and some of the Medicaid cuts we saw,” said Del. Maggie McIntosh (D-Baltimore), chairman of the Appropriations Committee. “We all care about these items, and it sends a very strong message to the governor.”
Hogan (R) has repeatedly challenged Democratic leaders, who balked at his decision to cut funding for the state’s most expensive school systems in his spending plan, to find a way to pay for additional school funding.
Part of the solution is a plan to phase out the pension system’s current “corridor funding” method, which allows the state to contribute to the pension system at prior-year levels. The General Assembly had floated the idea of moving to an initially less expensive, actuarial method for the fiscal year 2016. Lawmakers had proposed saving further money in 2016 by cutting the state’s contribution to the fund by $75 million.
In the budget approved Friday, lawmakers opted to defer switching plans until fiscal year 2017. But they still suggested cutting the payment for fiscal year 2016.
Comptroller Peter Franchot said he is opposed to both reducing the pension payment and overhauling the system, arguing that though those moves save money in the short term, they underfund the system over the long term and the state will ultimately have to pay more.
Secretary David R. Brinkley said the Hogan administration’s preference is that lawmakers use the money to pay for other retirement benefits that remain unfunded.
Hogan said the changes made by the House committee were good first steps toward a bipartisan agreement.
“While this is just the mid-point in a long process, and there are concerns about certain proposals in the committee’s recommendations, I believe we are headed in the right direction overall,” Hogan said in a statement.
The full House is expected to take its first vote on the changes to the budget next week.
Union leaders were thrilled with the budget proposal, which adds $218 million for schools and pay raises. They called it a “better budget for Maryland” and planned to rally Monday night with Democratic leaders to keep the money in place.
The changes also provide increased funding for several safety-net programs, including providing $2 million for treatment of people addicted to heroin, $6.5 million to maintain the provider rates for those who work in the community health field and Medicaid coverage for pregnant women whose income levels were slightly above the regular eligibility for the federal program.
“We can not stress enough the importance that these Marylanders have access to the services they need when they need them,” Dan Martin of the Mental Health Association of Maryland said in a statement. “We applaud the great work of the House Appropriations Committee to restore funding for our most vulnerable Marylanders.”
Brinkley, who said “good job” as he kissed McIntosh on the cheek, said analysts with the Hogan administration will review the plan as the full House takes up the budget next week and the Senate considers it in coming weeks.
Brinkley said the administration would like to see some tax relief for Marylanders, but he noted that the House committee put forward a budget that does not include a tax hike.
Hogan said he plans to continue talks with the General Assembly about tax relief.
“Ultimately, the budget process will not be completed without meaningful discussion on the many tax relief measures our administration has introduced for struggling Maryland families, small businesses, retirees, and veterans,” the governor said. “We look forward to continuing to work with the leaders of the House and Senate over the next 30 days to meet our goals and we are hopeful that we will be able to reach a bipartisan agreement on the budget.”
Correction: An earlier version of this story incorrectly reported the amount of Maryland Gov. Larry Hogan’s proposed budget. It is $40.7 billion, not $16 billion.