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State Treasurer Nancy K. Kopp, Gov. Martin O’Malley and state Comptroller Peter V.R. Franchot Wednesday voted to cut $84 million from the state budget. (The Daily Record/Bryan P. Sears)

Amid the speeches, board cuts $84 million from state budget

ANNAPOLIS — Maryland’s tax collector called on statewide candidates in the 2014 election to stop bickering over a faltering economy and have an “honest conversation” that resulted in solutions.

Maryland’s outgoing governor said it was time to stop focusing on bad economic news and appreciate the improving climate in Maryland.

Amid the dueling characterizations of Maryland’s economic picture, the state’s three-member Board of Public Works unanimously approved more than $84 million in combined budget cuts, job eliminations and fund transfers in a budget year that is just two days old.

The vote didn’t come without a debate of sorts.

“I think it’s time to take the political spin about Maryland’s fiscal and economic environment and just pack it away with all the campaign signs that have been picked up,” said Comptroller Peter V.R. Franchot, adding that Maryland’s troubles mirror stagnant growth nationally.

“The arrows in the economy are all pointing in the wrong direction,” said Franchot, who along with the governor and state treasurer makes up the board.

Franchot cautioned Democrats who “would benefit from a rosier outlook” to “stop pretending we’re through the thicket.” For Republicans “who would say that the sky is falling, blame it all on the other political party: Cut it out.”

Soon after the board approved more than $84 million in reductions and shifts in the fiscal 2015 budget, Gov. Martin J. O’Malley commented on what he said was Maryland’s improving economy. He laid the public’s continuing concerns about the national picture on Republicans in Washington.

“When our primary institution of representative institution, the House of Representatives, starts acting in a very unrepresentative manner and shuts down our federal government for no other reason than … spite, that hurts consumer confidence and that especially sends a ripple throughout the mid-Atlantic region,” O’Malley said,

O’Malley added that the government shutdowns, such as the one that lasted from Oct. 1-16, 2013, “puts a crimp in your home buying, your car buying and all sorts of other things.”

Meanwhile, the governor said the state continues to invest in education and transportation projects and is working to build the middle class through an increase in the minimum wage and increases in the state’s earned income tax credit for low-income Maryland residents.

Earlier this year, the legislature approved a $39 billion spending plan, a nearly 5 percent increase over fiscal 2014. O’Malley and the three-member board can cut that budget as much as 25 percent without additional legislative action. Maryland is the only state in the nation that grants such authority through the state constitution.

Included in the unanimously approved cuts are $77.1 million in actual spending — an amount equal to about one-half of 1 percent of the state’s $16.1 billion operating budget, according to state Budget and Management Secretary T. Eloise Foster.

Foster said the changes were needed because “we have been observing an underperformance in our revenues.” She said it is less than what other states are experiencing.

Some of the biggest cuts include:

  •  Nearly $19.4 million in reductions to a state health insurance funding pool.
  •  Nearly $17.9 million in various cuts to the Department of Health and Mental Hygiene.
  •  $11.3 million from the Department of Human Resources, including $9.5 million as the result of what the state says is a declining foster care caseload.
  •  $1.45 million from the Office of the Public Defender, all but $150,000 of which is attributed to “decreased caseloads and reduce funding to reflect decreased need for contractual social workers and temporary staff.”

The plan also included the elimination of 61 vacant positions and more than $7 million in reversions and transfers from special funds. There are no layoffs, furloughs or tax increases contained in the budget action.

Foster said cutting the budget now, two days into the fiscal year, would enable the state “to tighten our belts so we would be in a better position to absorb adjustments to our revenues and to ensure we can maintain a balanced budget moving forward.”

Wednesday’s actions by the board represent the first time since 2010 that the panel has been asked to make interim reductions. Between 2008 and 2010, the board approved seven requests to cut spending by a total of nearly $1.3 billion.