House Moves Forward On Hogan Budget

Mar 19, 2015

House Speaker Mike Busch confers with leaders of the House of Delegates.
Credit Christopher Connelly/WYPR

The Democratic-led House of Delegates gave its preliminary approval to Republican Gov. Larry Hogan's budget Wednesday. The version passed by the lower chamber departs significantly from Hogan’s plan, beefing up spending on schools, safety net programs and state worker pay.

When she introduced the budget bill on the House floor at the beginning of several hours of debate, House Appropriations Committee Chairman Maggie McIntosh, D-Baltimore City, said the budget adds to the rainy day fund  and slows the growth of government spending, adding that “We restored our priorities: Education, taking care of our state workers, and critical, critical social and health needs that our Maryland citizens deserve. We did this without raising taxes.”

The House plan puts $130 million dollars more toward education than Gov. Hogan’s plan called for. It restores a cost of living increase for state employees. And there’s more money for Medicaid, mental health services, and people with developmental disabilities. The House plan also allocates $2 million for

Republicans raised a series concerns on the House floor -- some of them perennial, like a move to restrict abortion access to Medicaid recipients that comes up every year. It was voted down, as it is every year. Others were concerned about cutting positions in the Department of Corrections and the state police – 100 in total.

“We’re going the wrong direction when we are taking away public safety from the state of Maryland,” said Del. John Cluster, R-Baltimore County.

But Chairman McIntosh said they only cut some of hundreds of vacant positions between the two departments . Hogan’s budget directs all state agencies to cut their budgets by 2 percent, McIntosh said the staffing cuts help get them there without reducing manpower. “We’re trying to help the governor achieve the 2 percent across-the-board reductions,” McIntosh said.

Overall, though, Republicans raised fewer objections than in previous years. House Minority Whip Kathy Szeliga, R-Harford County, was mostly positive about the budget. She praised Hogan for putting forward a budget that grows spending at the slowest rate in nearly a decade. “This is the first budget that we’ve seen since before I was elected that does not depend on a tax increase,” she said.

Gov. Hogan said last week that he’s waiting for a discussion of tax cuts. The legislature has yet to approve any of his tax proposals. Szeliga agrees, and suggested that changes to the stormwater remediation fee, which she calls the “rain tax,” would amount to a tax cut, though the measure is revenue neutral because it’s not actually a tax. On actual tax relief, which would reduce revenues she says, “It is certainly going to be difficult to do that, but nothing’s impossible. And I definitely see this budget positioning Maryland to give taxpayers tax cuts next year.”

The House budget is a tad smaller than Hogan’s. It comes to about $16.4 billion dollars in general fund spending. The legislature can’t add to the total amount of the governor’s proposed budget in Maryland, so the House had to find ways to save money elsewhere to spend more money on schools and other priorities.

Part of the solution comes from eliminating the structural deficit over two years instead of the more aggressive plan Hogan laid out that would have closed the gap in one year. The House also found money by reducing a planned payment to the state’s pension fund, which left Republicans howling. The state’s tax man Peter Franchot, a democrat, hates it too.

“To insist upon that as a source of this general fund compromise, boy that really troubles me as the comptroller,” Franchot said.

Franchot likened the move to pulling money out of a retirement account to pay for a trip to Disney World. He says it’ll cost the state more money in the future.

“I don’t think when you’re talking about larger classroom sizes or laying teachers off or not living up to your commitment to state employees has anything to do with a vacation at all,” said House Speaker Mike Busch. Busch praised the House’s work and said he never heard an alternative solution to restore education funds from Franchot. “There’s no perfect budget,” Busch said, adding. “We’re going to be a sound state, we’ll still retain a AAA bond rating and we’ll go forward from here.”

The budget moves forward later today when the House is expected to give its final approval to the plan. After that, it moves across the hall to the Senate.