Maryland Gov. Larry Hogan’s proposal for mandate relief does not affect the state’s K-12 education-funding formulas, contrary to Democrats’ concerns that he would target the requirements as part of his plans to reduce automatic spending increases.
Hogan (R) filed legislation this week that would pause many of the state’s statutory spending hikes when revenue is projected to rise less than 2 percent compared with the previous year. The measure, which was read on the Senate floor Thursday morning, would first apply to the fiscal 2019 budget.
The proposal would exempt the state’s funding formulas for K-12 education, debt payments, the state-employee pension program and the reserve fund. But it would affect all other funding formulas that require specific levels of annual spending, including those that support community colleges, private higher-education institutions and wages for day-care workers who help the developmentally disabled.
The bill would also prohibit the legislature from creating new spending mandates without reducing existing ones by an equal amount of required funding.
Many Democrats have expressed concern that Hogan’s recent promise to propose mandate relief was code for slowing annual growth in education spending that is required under state law. The governor’s legislation proves otherwise in terms of K-12 funding.
Mandate relief is a top priority for the Hogan administration. The governor has complained repeatedly that statutory funding formulas, which tie the state to predetermined levels of annual spending and spending increases, make up 83 percent of the state’s budget. He said this month that the requirements have become “a major driver of unsustainable spending and debt.”
Warren G. Deschenaux, executive director of Maryland’s nonpartisan Department of Legislative Services, noted this week that mandates account for only about 47 percent of the state’s general fund, which excludes federal dollars and money such as gas-tax revenue that is restricted to specific programs.
“There is more power for the governor to allocate these resources than the 83 percent might imply,” Deschenaux said.
Maryland is on track to end fiscal 2016 with a $300 million surplus, but state budget analysts have estimated that the government will rack up a cumulative deficit of $450 million by 2021.
In past years, including the last eight, state lawmakers have approved legislation to temporily suspend or adjust some of the ongoing funding requirements when revenue does not match spending levels. Hogan has said his bill would make the budget more predictable by creating a permanent policy for those down years.
But Senate Budget and Taxation Committee Co-chair Richard Madaleno (D-Montgomery) said the governor is trying to avoid having to prioritize certain categories of spending during such times.
“Governing is difficult,” he said. “He seems to want to avoid responsibility for tough decisions by hiding behind a sequester idea that Republicans in Congress used two years ago. He wants to bring that same failed idea to Maryland.”
The sequester refers to automatic spending cuts that took effect in 2013 after Congress and President Obama failed to reach an agreement on plans to reduce deficits.
Democratic lawmakers are also reluctant to cede additional budgeting control to Hogan when he already has more influence over fiscal planning than most governors. Maryland’s constitution requires the chief executive to draft a budget each year, and it limits the legislature to subtracting funds or shifting them.
“If you want to talk about mandates, you have to talk about budget structure that leads to these mandates,” he said. “To come up with a mindless, across-the-board formula built into law serves nobody except Larry Hogan’s ambition to have a second term.”
Ovetta Wiggins contributed to this report.