2018 Proposed State Budget Highlights

Governor Hogan submitted his proposed

Fiscal
Year 2019 budget last week (Senate Bill 185) detailing $17.7 billion in proposed spending – an increase of 3.4% over the current year. However that proposed figure does not include approximately $300 million in appropriations required to be listed in the budget that the Governor is proposing to cut, contingent on the passage of a Budget Reconciliation and Financing Act [“BRFA” (Senate Bill 187)] that, if enacted, would amend or repeal existing laws that require those additional funds.

 

In broad strokes, the budget provides for a 2% salary increase to most state employees but does not longevity/performance salary increments. Most provider rates are limited to 1% growth while the 3.5% required under last year’s HOPE Act for behavioral health providers is cut to 2%. The budget ‘defers’ some spending to next year, including $50 million of planned ‘catch-up’ funding for the state pension system. Education aid formulas are fully funded, but several small recently adopted education initiatives would be reduced or completely unfunded via the BRFA. 

 

The budget itself makes no provision for the impact of recent federal tax reform actions, although the Fiscal Briefing document (below) does discuss the anticipated impacts on Marylanders federal and state tax liabilities for

tax
year 2018. The Comptroller scheduled is to release formal analysis of the impact of the federal tax bill on Thursday (Jan. 26)

 

The “Fiscal Briefing” provided to the General Assembly ‘money committees’ on Monday is currently the most detailed summary of the budget, and issues related to cuts, the structural deficit


and

the state’s fiscal outlook, that is available. The more detailed analysis is generated for the legislative budget hearings – that schedule is posted here. The Senate will be acting on the Budget first this year.