The Maryland Senate voted unanimously Thursday to approve a $40.4 billionbudget that wipes out nearly 75 percent of the state’s structural deficit and restores funding that was cut from education and state employees’ salaries in Gov. Larry Hogan’s proposal.
The budget compromise represents the greatest show of bipartisanship since Hogan (R) took office in January, returning two-party rule to Annapolis after eight years of Democratic control. It was the first time in a decade that the budget passed the Senate without any no votes or abstentions. Veteran lawmakers from both parties said they could not recall a smoother process. The
46-to-0 vote in the Senate chamber was followed by cheers.
“It’s like the Age of Aquarius, all things came together,” Senate President Thomas V. Mike Miller Jr. (D-Calvert) said.
But it took some doing.
When Hogan unveiled his budget the day after he was sworn into office, several Democratic leaders scoffed at the governor’s plan to cut Medicaid reimbursements, salary increases for state workers and new funding for schools. Hogan’s proposal eliminated a structural deficit of at least $650 million, a move that he said was needed to shore up the state’s fiscal health and open the way for promised tax relief.
When Democratic lawmakers balked at his education spending formulas, he urged them to come up with a way to cover the costs.
The House Appropriations Committee restored the reductions in education spending and a 2 percent cost-of-living adjustment for state workers. But it also halved a $150 million additional payment to the state employees’ pension system. The committee made various reductions to Medicaid and the Temporary Cash Assistance Program and saved $90 million by making changes to the local income tax reserve fund.
The budget kept intact Hogan’s 2 percent across-the-board cuts to state agencies.
“Obviously, the budget is not exactly the way it went in,” Hogan said Thursday after a news conference in Pikesville during which he announced a supplemental budget that included the hiring of 100 new state police officers.
“We’re finding some compromise. . . . And while we have some minor disagreements here and there, we’re very pleased with the process overall,” he said.
The budget passed by the Senate on Thursday included modest changes to the plan that the House approved last week 129 to 10. A conference committee, made up of members of both chambers, will begin meeting next week to discuss the Senate’s changes to the House bill.
Hogan said he wants assurances from the conference committee that the pension fund will be addressed in a “responsible way.” He said he also is looking forward to some discussion in the final weeks of the 90-day legislative session of several of his proposals to give citizens modest tax relief. So far, those proposals have struggled in the legislature.
Democrats in the Senate said Thursday that they were happy to see education, social-service safety nets and the environment get a boost in the spending plan. Republicans said they were glad to see a budget that cut the structural deficit by three-fourths without raising taxes.
“Do we agree with everything that’s in the budget? No, you never agree with everything that’s in the budget,” said Sen. George C. Edwards (R-Garrett), a member of the Senate Budget and Taxation Committee who has served in the General Assembly for 33 years. “But I think it’s a very good budget. One that does move us forward.”
Some Republicans sought assurances from their colleagues that the deficit would be eliminated next year. Sen. Edward J. Kasemeyer (D-Baltimore County) said that is the goal, but it is dependent on financial markets and even Hogan’s push for tax relief.
The deficit was reduced from at least $650 million to $175 million, said Warren Deschenaux, director of the legislature’s nonpartisan Office of Policy Analysis. But it will likely creep back up to $240 million next year because of inflation and other factors.
The governor and General Assembly therefore could find themselves debating cuts in planned education spending again in 2016.
Miller warned counties and cities across the state to work on their own fiscal health.
“Get control over it,” Miller said of counties’ requests for state funding, “before they come to the state and say ‘Bail us out’ for the umpteenth time.”
Hogan said he worries about how future budgets will be affected by the funding of the pension system.
“While I believe we are headed in the right direction overall, I do remain concerned about the General Assembly’s reallocation of funding originally intended to address shortfalls in the State pension system,” he said. “We cannot ignore our responsibility to current and retired state employees.”
Before the final budget vote, several floor amendments were rejected, including a proposal to allow parents to opt out of Common Core exams for their children.
Sen. Joan Carter Conway (D-Baltimore), chairman of the Senate Education Committee, said the amendment proposed by Sen. Justin Ready (R-Carroll) was a policy issue and should not be included in a budget bill.
Jenna Johnson contributed to this report.