Maryland Gov. Larry Hogan’s 2017 budget appears on track to sail through the state legislature, but a separate administration proposal to limit automatic spending increases has emerged as a major point of contention for Democratic lawmakers and for organizations that say they depend on the regular funding bumps.
Tension over the issue flared Tuesday, shortly before the House Appropriations Committee held a hearing on Hogan’s plan for relief from mandated spending increases. The governor appeared at a news conference to criticize Democrats for waiting until after the halfway point of the 2016 legislative session to take up the proposal.
“Reducing mandated spending increases is one of the most serious and most important measures before the legislature this year,” Hogan (R) said. “Unfortunately, it would appear that some members of the General Assembly are choosing to ignore fiscal responsibility altogether.”
Hogan’s plan would pause automatic spending increases when revenue is lower than projected, with exemptions for K-12 education funding, debt payments, the state pension system and reserve savings. He said the required spending increases eat up a significant portion of the state’s budget and are a leading driver of deficits during lean times.
But many Democrats have said they prefer the existing system, which allows the governor and legislature to use “budget reconciliation” measures to adjust funding formulas case-by-case when revenue is low. They say the existing system also makes funding levels more predictable.
“I’m not sure why we need this bill,” said House Appropriations Committee Chair Maggie L. McIntosh (D-Baltimore). Hogan, she added, “has the strongest budget authority of any governor in the United States. I’m just not sure what more authority he needs.”
Maryland’s Constitution grants unique budgeting authority to the governor, prohibiting the legislature from adding spending to whatever fiscal plan the chief executive submits each year for approval. State Budget Secretary David R. Brinkley, a former Republican lawmaker, said no other states limit their legislatures to that extent.
McIntosh said her committee may be able to find common ground with a scaled-back version of Hogan’s mandate-relief plan. But she did not indicate which funding formulas she would be willing to adjust during down years. “I’m not sure yet,” she said. “I’m going to be open-minded about it.”
Advocates for social-service organizations and community colleges testified Tuesday in favor of keeping the mandates. “It’s really about values and investments,” said Bernard Sandusky, executive director of the Maryland Association of Community Colleges. “We have an outstanding higher-education system. This is no accident.”
Hogan’s mandate-relief plan would also prohibit the General Assembly from adding new automatic spending increases unless it reduces existing mandates by an equal amount. The state attorney general’s office advised House Speaker Michael E. Busch (D-Anne Arundel) on Tuesday that the provision would violate a legal precedent that says the legislature cannot limit the authority of future legislatures.
Hogan blasted Democrats for proposing what he said was a combined $3.7 billion in new required spending hikes, including an additional $11 million a year for anti-tobacco initiatives and a measure that would require the state to increase reimbursement rates for mental-health and addiction-treatment providers at the rate of inflation.
If approved, Hogan said, those bills could increase the state’s projected budget deficit by $2.8 billion over the next four years. Democrats said the governor’s reference to the combined impact of the proposals was alarmist, because not all the bills are likely to pass.
“This is completely unacceptable,” Hogan said. “I was elected to bring fiscal restraint and balance to Annapolis, and to hold the line on spending.”
The governor said Marylanders agree with the direction he is taking the state, noting that recent polls show his approval ratings above 60 percent.
Busch said Hogan shouldn’t be governing by public-opinion polls. “You have 141 people who have been elected by their constituencies to come down and make responsible decisions,” he said. “If we had to govern by whether someone was popular or not popular, we would be changing positions every 15 seconds.”
As for Hogan’s budget, the Senate Budget and Taxation Committee has found little to complain about in the plan, which fully funds all of the state’s formulas.
Sen. Edward J. Kasemeyer (D-Howard County), who chairs the panel, said that “people are fundamentally happy with it, and our work is going very quickly.” He said the governor’s various tax-relief proposals, which are separate from the budget, have caused more of a stir among Democratic lawmakers.
Ovetta Wiggins contributed to this report.