Maryland’s annual legislative session ended in a standoff Monday night, with Republican Gov. Larry Hogan vowing not to spend money lawmakers allocated for schools and other priorities after the General Assembly refused to fund some of his budget requests.
In the closing hours of the 90-day session, the Senate and the House of Delegates voted along party lines to approve a spending plan that included less funding than Hogan sought to shore up the state pension fund and did not go as far as the governor wanted in trimming the state’s structural budget deficit.
As a result, Hogan said he would refuse to use money the legislature earmarked to preserve state pay raises, full funding for the most expensive school districts and several health-related initiatives. “In all likelihood, we will probably have to use the money [in future years] to fix the problem they created,” Hogan said.
House Speaker Michael E. Busch (D-Anne Arundel) said the negotiations with Hogan “put a real damper” on bipartisanship. “There’s going to have to be some wounds healed,” he said.
The split stood in stark contrast to the beginning of the 90-day session, when the Republican governor and the Democrats who control both houses of the legislature pledged to compromise for the good of the state. It also set off an immediate round of lobbying by education activists and advocates for the poor who urged the governor to use the funds in the budget as the legislature intended.
“The onus is on the governor to implement the budget,” said Charly Carter, executive director of Maryland Working Families. “We will know who to blame when our schools fail or when people don’t get the health services they need. Working families will lay the blame at his feet.”
Hogan, who campaigned on a platform of fiscal austerity, said the budget passed by the legislature was “irresponsible” but still a “good deal for taxpayers” because it does not include tax increases.
The governor took credit for “bringing about some fiscal responsibility” after eight years with Democrat Martin O’Malley in the governor’s office that included a raft of tax hikes and fee increases.
Hogan’s surprise win over O’Malley’s longtime lieutenant governor last November led to promises from both sides to work together. But despite some compromises, including on environmental regulations, the cooperation mostly evaporated in recent days.
Now leading lawmakers and the first-term governor must find a more collaborative path forward or risk a return to the stalemates that marked the tenure of Maryland’s last Republican governor, Robert L. Ehrlich Jr.
Del. Dereck E. Davis (D-Prince George’s), the chairman of the Economic Matters Committee, predicted similar standoffs over the next three years. “There’s no question,” he said. “This was the honeymoon year, and it went off the rails. We’ll say all the right things, but this is how it’s going to be.”
But Hogan, who served as appointments secretary under Ehrlich, said the interactions were far less contentious this time around. “We haven’t fought any lawmakers. We haven’t had any confrontations whatsoever,” he said in a midnight news conference. “We’re not angry today about the fact that some of our legislative initiatives didn’t pass. We’re a little concerned about them robbing the pension, and we’re a little concerned about the structural deficit. But there’s no animosity. I thank them for their efforts.”
Senate Minority Leader J.B. Jennings (R-Baltimore County) said he thinks relations can be repaired: “Is it a fatal blow? Absolutely not.” And Senate President Thomas V. Mike Miller Jr. (D-Calvert) said he expects that future budget cycles will go more smoothly.
“This is new to him, honestly, it’s a learning experience,” Miller said of Hogan, who has never before held elected office. “He’ll adapt. We’ll all adapt, and we’ll get along fine. I promise.”
A reporter asked: Will next year be different? “I hope so,” answered Miller, the longest-serving Senate president in the country. “If it’s not, it’s going to be trouble.”
The budget fight centered on a small fraction of the $40.7 billion state budget — about $202 million. The legislature wanted to spend that money on three things: $68.7 million to pay state employees so they do not lose the 2 percent raise they received in January; $68.1 million to the state’s 13 largest school systems, including Prince George’s and Montgomery counties, where the cost of educating children is more expensive; and the remainder for several health-care initiatives, including the continuation of funding to repay doctors who treat the state’s poorest residents.
The budget approved Monday night protects those funds so that they cannot be allocated for any other purpose. But lawmakers also cannot force Hogan to spend them. In the final moments of the session, lawmakers passed legislation that says if Hogan does not spend the allocated school funding, such spending would be mandated in future years.
Although budget issues dominated, lawmakers passed hundreds of other bills during the session, including several aimed at improving the state’s business climate and combating a rash of heroin-related overdose deaths. They repealed mandatory-minimum sentences for some nonviolent drug offenders and restored voting rights for felons who are on probation and parole.
On Monday, they gave final approval to a bill to prohibit hydraulic fracturing in Western Maryland until at least October 2017, banned powdered alcohol and eliminated a requirement that counties charge a storm-water remediation fee — a mostly symbolic change that Hogan pushed hard for on the campaign trail and throughout the legislative session.
Lawmakers boosted the top awards local governments can pay to plaintiffs in civil suits; legalized commercial taxi-alternative services such as Uber; approved a Hogan proposal to restore a checkoff box on income-tax forms that would allow state residents to donate to a public campaign finance fund; and passed a watered-down version of a bill submitted by the governor to make it easier to launch charter schools.
As the session drew to a close, they also passed a Hogan bill that would expand an income-tax exemption for some military veterans.
Other proposals by the governor — including one to repeal automatic increases in the gas tax and another to give tax credits to companies that donate to private schools — did not advance.
It was a learning year for both chambers, which welcomed an unusually high number of new members in January, along with a new governor. Lawmakers often opted for legislation to study issues over the coming year instead of taking action now. They are waiting to see how Hogan might use his veto power, especially on legislation that was opposed by the business community.
Miller and Busch said lawmakers worked in “good faith” to approve at least parts of some of the governor’s bills. But changes made in those bills left the governor frustrated — and demanding to know what had happened to his legislative agenda.
Over the past week, as a panel of lawmakers began ironing out differences between the various versions of the budget legislation, Hogan’s concerns about the pension shortfall and the fate of his legislative proposals came to the fore.
On Friday, the panel offered a compromise — including some of the additional money Hogan wanted for the pension system. It added $4 million for textbooks and technology at nonpublic schools, instead of the tax break Hogan had sought for businesses that donate to private schools; $1 million for the state police, because the governor wants to expand that force; and the funding lawmakers wanted for school systems, pay raises and Medicaid.
That version is what passed both chambers of the legislature Monday night.
Hogan did not like the budget proposal, and on Saturday he presented an alternative to Miller and Busch that contained more money for the pension fund and less for school districts and Medicaid. The Democrats would not consider it.
“This is a fiscally responsible budget that is balanced while at the same time protecting the needs of our constituents,” Miller said Monday about the version that would be passed by both chambers hours later. “Now is not the time to negotiate. Now is the time to legislate and move forward.”
Arelis R. Hernández contributed to this report.