State Budget Update

January 28, 2015

By Henry Bogdan, Director of Advocacy & Public Policy, Maryland Nonprofits

The budget balancing plan proposed last week by the Hogan Administration directly deals with the now chronic problem of expenditures exceeding revenues – by simply scaling back spending further after more than a decade of fiscal constraints. But limiting spending and taxes is not the most important function of state government. The cost of this budget plan is an expansion of another important ‘deficit’ – the growing inability of the state to meet it’s core responsibilities – providing for the health, education, well-being and safety of people and communities.

The Fiscal Briefing presented Monday by the Department of Legislative Services (“DLS”), explained that the Budget Bill and the Budget Reconciliation and Financing Act (the “BRFA”) would limit or cut back the funding needed to sustain many state programs. For example, it freezes the per pupil funding amount that is the basis of the major public school funding program, and caps growth at 1% for the foreseeable future. Support for community colleges, and public and private higher education, is reduced while the plan assumes ongoing tuition increases at state colleges and universities. (In a briefing a week earlier for the Senate Budget and Taxation Committee, Moody Economist Mark Zandi stressed the importance of Maryland continuing to invest in K-12 and higher education.)

Rates for providers of Medicaid, developmental disability, and other health related services are cut back and limited into the future. Funds to protect and preserve the environment and Chesapeake Bay are reduced. Aid to local government is cut, including for local police and public health programs. The state work force, already stressed in several areas that affect services, will be reduced another 500 positions by attrition, while state employees lose a modest cost of living increase already in effect as well as other negotiated compensation adjustments. The plan requires – in addition  to the above a further reduction of 2% across agency budgets, characterized as “dangerous” during Monday’s DLS briefing.

  • A half billion dollars of these cuts and fund transfers, and the numerous BRFA provisions limiting needed funds in future years, require the approval of your representatives in the legislature

  • Any tax cuts would require even more cuts to state spending.

  • Maryland already ranks well below the national average in spending on state and local government.

Tell your state Delegates and Senators that this plan is not acceptable. They must demand a more balanced approach – that accounts for needs and the future of people and communities across Maryland as well as the desire to hold down or even cut taxes.   

See also the quick analysis of the Maryland Center on Economic Policy.

Contact Henry Bogdan for more information. 


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