Home of the Standards for Excellence Institute

POLICY ALERT: GOVERNOR’S PROPOSED BUDGET

January 25, 2017


By Henry Bogdan, Director of Public Policy, Maryland Nonprofits

Major points of contention developing in the legislative session include budgeting decisions made by the Governor and budget reconciliation bills he submitted. The Maryland Center

on
 Economic Policy’s analysis points out numerous issues, including:

POSITIVES

  • Increasing funds for private and specialized schools
  • $31 million in additional funding for children and young adults with autism; $2 million in added funds for opioid addiction treatment; and funds for an additional 20 inpatient psychiatric beds
  • Reducing the waiting list for people with developmental disabilities by funding 400 additional Medicaid waiver slots
  • Restoring funds cut from the current year budget for historically black colleges
  • $30 million (50% increase) to the MD Economic Assistance Authority Fund
  • New programs/funding focused on cybersecurity, workforce quality, small, minority and women-owned businesses

NEGATIVES

  • Not holding Baltimore City Schools harmless from a $42 million formula loss (done in the past)
  • Cutting three programs to help students in low-income areas, as well as funding for efforts to recruit and retain qualified teachers
  • In health, cuts to Prince George’s County

    Hospital,
     required reimbursement rates to developmental disabilities service providers, and the Community Health Resources Commission
  • $9 million

    reduction
     to the Baltimore Regional Neighborhoods Initiative
  • $5 million

    reduction
     to the SEED Community Development Anchor Institution Fund
  • $10 million

    reduction
     in capital funds for rental housing programs 

Beyond specific programs, debate continues over the projected future imbalance between state revenues and spending. If there are no negative impacts from federal policy changes, and despite the Governor’s proposed budget being balanced with a modest surplus in FY2018, revenues and spending would be out of balance by $300 to $400 million in the next year and approximately $1 billion by FY2021 (Fiscal Briefing). The Administration continues to call for “relief from spending mandates” in order to address the problem. The legislature’s top analyst said they need to “bend the spending curve” that climbs faster than our revenues. 

The inherent problem with this approach is that the major mandates – public and higher education and medical assistance (Medicaid) – make up the majority of general fund spending. Even at its current level, the major public education formula is funded significantly below its intended level, and reports show it needs to be increased well beyond that. In addition, possible federal changes will increase the burden of health programs

on
 the states. (The loss of the ACA’s extra funding for the Medicaid ‘expansion population’ would come to $1.2 billion).

In our view, avoiding those needs and responsibilities would be unconscionable and politically toxic to Marylanders.

Next week we hope to review major non-budgetary issues. Share your thoughts with us. Join our weekly policy calls (Mondays at noon) at 712-775-7031, access code 336-330, or contact Henry Bogdan, Public Policy Director, to share concerns and be more engaged with this debate.