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| Hogan proposes $42.3 billion budget that includes modest tax relief | Hogan proposes $42.3 billion budget that includes modest tax relief |
| (about 1 hour later) | |
| Maryland Gov. Larry Hogan unveiled a budget proposal Wednesday that would provide small amounts of tax relief, reduce the state’s borrowing limit and take steps to shore up its fiscal reserves. | Maryland Gov. Larry Hogan unveiled a budget proposal Wednesday that would provide small amounts of tax relief, reduce the state’s borrowing limit and take steps to shore up its fiscal reserves. |
| The $42.3 billion budget proposal — a 5 percent increase over the current fiscal year — includes a $17.1 billion operating budget with full funding for education and other core services. It leaves a projected surplus of $450 million for fiscal 2017. | The $42.3 billion budget proposal — a 5 percent increase over the current fiscal year — includes a $17.1 billion operating budget with full funding for education and other core services. It leaves a projected surplus of $450 million for fiscal 2017. |
| The proposal would cut about 800 state government jobs, partly by outsourcing housekeeping and food-services jobs at state-run hospitals, and give modest raises to the rest of the state workforce, officials said. It would set aside $150 million more than required for state-employee pensions and increase the state’s rainy-day fund to more than $1.1 billion. | |
| [Read the full budget proposal] | [Read the full budget proposal] |
| The state’s budget secretary, David R. Brinkley, said Hogan (R) will push during this legislative session for new laws to relax spending mandates during economic hard times, part of an effort to prevent future budget deficits. “Our fiscal challenges and risks remain, and caution should be exercised,” Brinkley said. | The state’s budget secretary, David R. Brinkley, said Hogan (R) will push during this legislative session for new laws to relax spending mandates during economic hard times, part of an effort to prevent future budget deficits. “Our fiscal challenges and risks remain, and caution should be exercised,” Brinkley said. |
| The Democratic-controlled legislature has to approve Hogan’s fiscal plan before it can take effect. Budgeting rules allow lawmakers to remove items and shift funds around during negotiations, but they cannot add spending. | The Democratic-controlled legislature has to approve Hogan’s fiscal plan before it can take effect. Budgeting rules allow lawmakers to remove items and shift funds around during negotiations, but they cannot add spending. |
| Democrats said Wednesday that the budget proposal left many questions unanswered, including which funding formulas Hogan wants to tweak. | Democrats said Wednesday that the budget proposal left many questions unanswered, including which funding formulas Hogan wants to tweak. |
| “He talks about it, but he gave us no specifics,” House Speaker Michael E. Busch (D-Anne Arundel) said after being briefed by Hogan on Wednesday morning. | “He talks about it, but he gave us no specifics,” House Speaker Michael E. Busch (D-Anne Arundel) said after being briefed by Hogan on Wednesday morning. |
| Senate Minority Leader J.B. Jennings (R-Baltimore County) called Hogan’s proposal “a fiscally prudent budget and one I think the state can be proud of. . . . It goes a long way to close all the structural deficits we have.” | Senate Minority Leader J.B. Jennings (R-Baltimore County) called Hogan’s proposal “a fiscally prudent budget and one I think the state can be proud of. . . . It goes a long way to close all the structural deficits we have.” |
| The budget includes 2 to 4 percent pay raises for state government employees, depending upon their years of service. It also reduces the size of the government workforce to fewer than 50,000, eliminating about 650 vacant positions and outsourcing about 150 jobs. | The budget includes 2 to 4 percent pay raises for state government employees, depending upon their years of service. It also reduces the size of the government workforce to fewer than 50,000, eliminating about 650 vacant positions and outsourcing about 150 jobs. |
| Pat Moran, president of the AFSCME union that represents most of Maryland’s state employees, said the state can ill afford employee reductions after losing thousands of workers in recent years. But he welcomed the news about pay increases. | Pat Moran, president of the AFSCME union that represents most of Maryland’s state employees, said the state can ill afford employee reductions after losing thousands of workers in recent years. But he welcomed the news about pay increases. |
| “In light of an almost half-billion-dollar surplus, I think it was the least that he could do, to make sure that state employees got an increase,” he said. | “In light of an almost half-billion-dollar surplus, I think it was the least that he could do, to make sure that state employees got an increase,” he said. |
| [House Democrats vote to override three of Hogan’s vetoes] | [House Democrats vote to override three of Hogan’s vetoes] |
| The proposed budget increases spending on health care and education, in accordance with existing funding formulas. It winnows taxes for seniors, working families and selected small businesses, and makes minor cuts in fees. | The proposed budget increases spending on health care and education, in accordance with existing funding formulas. It winnows taxes for seniors, working families and selected small businesses, and makes minor cuts in fees. |
| Hogan had previously announced that he would pursue a modest tax-relief package amounting to $480 million over the next five years. He proposed about $37 million of that relief in fiscal 2017, including reducing the costs of acquiring birth and death certificates, cutting annual business-filing fees by $200 and allowing seniors to exempt an additional $4,000 of their income from personal taxes. Hogan also proposed increasing state tax credits available to the working poor by $79 a year, on average, and shaving surcharges on electricity bills. | Hogan had previously announced that he would pursue a modest tax-relief package amounting to $480 million over the next five years. He proposed about $37 million of that relief in fiscal 2017, including reducing the costs of acquiring birth and death certificates, cutting annual business-filing fees by $200 and allowing seniors to exempt an additional $4,000 of their income from personal taxes. Hogan also proposed increasing state tax credits available to the working poor by $79 a year, on average, and shaving surcharges on electricity bills. |
| For K-12 education, the budget would boost spending by 3 percent over the current year, to a total of $7.8 billion. Brinkley said per-pupil expenditures would be higher than ever before. | For K-12 education, the budget would boost spending by 3 percent over the current year, to a total of $7.8 billion. Brinkley said per-pupil expenditures would be higher than ever before. |
| The state teachers union applauded Hogan for fully covering the state’s education-funding formulas, but officials said they were uneasy about his desire to be able to adjust automatic spending increases in lean years. | The state teachers union applauded Hogan for fully covering the state’s education-funding formulas, but officials said they were uneasy about his desire to be able to adjust automatic spending increases in lean years. |
| “The concern is that his conversation about mandate relief is another discussion about education cuts,” said Sean Johnson, assistant executive director of the Maryland State Education Association. “We’re going to wait and see what comes down the pike before we fully embrace this budget.” | “The concern is that his conversation about mandate relief is another discussion about education cuts,” said Sean Johnson, assistant executive director of the Maryland State Education Association. “We’re going to wait and see what comes down the pike before we fully embrace this budget.” |
| Brinkley said the governor was not specifically targeting schools funding. “Certainly education is in that mix, but so is the other 70 percent of the budget,” he said. | Brinkley said the governor was not specifically targeting schools funding. “Certainly education is in that mix, but so is the other 70 percent of the budget,” he said. |
| The budget includes a 2 percent tuition increase at Maryland’s public colleges and universities — which has already been approved by the state Board of Regents — and an additional $78 million to support higher education. | The budget includes a 2 percent tuition increase at Maryland’s public colleges and universities — which has already been approved by the state Board of Regents — and an additional $78 million to support higher education. |
| The budget would also provide $5 million in transportation grants for local jurisdictions and about $74 million to support city and county police. | The budget would also provide $5 million in transportation grants for local jurisdictions and about $74 million to support city and county police. |
| Hogan proposed $35 million to demolish the shuttered Baltimore City Detention Center — which he closed last year citing safety and other concerns — and begin designing a replacement facility. | Hogan proposed $35 million to demolish the shuttered Baltimore City Detention Center — which he closed last year citing safety and other concerns — and begin designing a replacement facility. |
| The governor also proposed lowering the capital-debt limit to $995 million, compared with its current level of $1.05 billion. Hogan has said the move is necessary to control rapid growth in debt-service payments, which have increased from zero in 2010 to $283 million this year. Without a change in how much the state borrows, the administration estimates that the payments would skyrocket to $433 million by 2018. | The governor also proposed lowering the capital-debt limit to $995 million, compared with its current level of $1.05 billion. Hogan has said the move is necessary to control rapid growth in debt-service payments, which have increased from zero in 2010 to $283 million this year. Without a change in how much the state borrows, the administration estimates that the payments would skyrocket to $433 million by 2018. |
| Critics say the lower cap will force the state to delay needed investments in transportation, school construction and other projects. | Critics say the lower cap will force the state to delay needed investments in transportation, school construction and other projects. |
| Brinkley described the budget as more prudent than what the General Assembly’s spending-affordability committee called for this year, noting that the panel recommended increasing general-fund expenditures by 4.85 percent for the coming fiscal year, while Hogan’s plan would raise the amount by 4.27 percent. | Brinkley described the budget as more prudent than what the General Assembly’s spending-affordability committee called for this year, noting that the panel recommended increasing general-fund expenditures by 4.85 percent for the coming fiscal year, while Hogan’s plan would raise the amount by 4.27 percent. |
| Although the governor traditionally has attended the public unveiling of the budget at the Maryland State House, Hogan left that task to Brinkley and other aides. His staff said he was preparing for a busy afternoon schedule that included various appearances in Baltimore and a Cabinet meeting to prepare for the winter storm expected this weekend. | Although the governor traditionally has attended the public unveiling of the budget at the Maryland State House, Hogan left that task to Brinkley and other aides. His staff said he was preparing for a busy afternoon schedule that included various appearances in Baltimore and a Cabinet meeting to prepare for the winter storm expected this weekend. |
| Hogan spokesman Matt Clark noted that the governor personally outlined much of his budget priorities this month while unveiling his tax-relief plans. “All of that is consistent with the announcements today,” Clark said. | Hogan spokesman Matt Clark noted that the governor personally outlined much of his budget priorities this month while unveiling his tax-relief plans. “All of that is consistent with the announcements today,” Clark said. |