ANNAPOLIS — Maryland Gov. Larry Hogan proposed a $42.3 billion budget Wednesday that would fully fund the Democrat-led General Assembly’s mandates on education, health care and other priorities, and leave hundreds of millions of dollars in savings — prompting debate on how best to spend the surplus.
The budget — the Republican governor’s first full-year spending plan — envisions a 4 percent increase in revenue, and would raise spending by 5 percent.
Elementary and secondary education would be fully funded, and school districts would see a per-pupil uptick in state aid to match inflation rates, fulfilling one of the legislature’s mandates.
State employees would receive a 4 percent rise in salaries, but the workforce will see staff cuts from a combination of layoffs and eliminating positions that are vacant, Budget Secretary David Brinkley said.
State university tuitions would increase by about 2 percent.
The budget also envisions $36 million in tax and fee cuts next year, and would reduce electricity bill surcharges by $10 million.
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State Sen. Andrew Serafini, a Washington County Republican on the Senate Budget and Taxation Committee, said Mr. Hogan did a good job moving forward on his campaign promises of tax relief.
“Everything the governor said he was going to do, he’s done. He took a pretty significant structural deficit and has gone towards creating a remedy and moved forward on starting to introduce tax cuts,” Mr. Serafini said. “I know he would’ve liked to come in with a balanced budget and then been able to create some tax relief, but that just wasn’t the case.”
Democratic leaders, though, said they still have questions about important projects Mr. Hogan left out of his budget, such as money to demolish old and vacant homes in Baltimore in order to pave the way for redevelopment.
“That money was not in the budget. They announced they would bring it in a supplemental and that it would be around $18 million this year and $70 million over the course of, I think, five years,” said Delegate Maggie McIntosh, Baltimore Democrat and chair of the House Appropriations Committee. “But the announcement was about $700 million. So where’s the other money? Where’s it coming from? It was money that was already allocated for Baltimore city. So I do have questions about that.”
The governor intends to introduce a supplemental budget to address some of the holes in spending, Mr. Brinkley said.
Senate President Thomas V. “Mike” Miller Jr. called Mr. Hogan “The Grinch Who Stole Christmas” for promising money for projects, such as Prince George’s Hospital Center and demolition in Baltimore, but then leaving it out of the budget.
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“I think he’s expecting other people to do heavy lifting or make commitments that he’s not ready to keep. This is taxpayer money, so we’ll see. I like him as a person, but in terms of a budget guru, in terms of helping the neediest jurisdictions of the state, I would give the budget a D,” said Mr. Miller, Calvert Democrat.
He said that if Mr. Hogan did not include money for Democratic priorities, there is a possibility the legislature would have to create more mandates to guarantee the money in the future.
The operating budget, which is about $17.1 billion, leaves about $450 million unallocated in the general fund, even after 5 percent of the projected surplus was put into a savings fund.
A budget battle is expected as lawmakers try to reach a consensus on whether the surplus should be saved, spent or returned to the taxpayers.
The Hogan administration has been vocal about wanting to put the money into savings to pad future budgets.
“Anyone who expects a year like this going forward, that’s very optimistic and we need to be very cautious,” Mr. Brinkley said.
Fiscal year 2017 starts in July and ends next June.
• Anjali Shastry can be reached at ashastry@washingtontimes.com.
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