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Board of Public Works approves $410M in budget moves

ANNAPOLIS — The Board of Public Works approved nearly $410 million in changes to the state budget in an attempt fill budget shortfalls for this year and next.

The changes, including a 2 percent across-the-board budget cut and a reduction in a promised increase to salaries for caregivers for the developmentally disabled, were unanimously approved at what was Gov. Martin J. O’Malley’s final time chairing the three-member panel that includes Comptroller Peter V.R. Franchot and state Treasurer Nancy K. Kopp.

“Right now, this is a time when we have to make some critical and difficult and tough choices but this too is part of fiscal responsibility and this is what it takes to make progress,” O’Malley said.

Included in the approved moves are:

• $206 million in budget reductions including $113 million that is part of a 2 percent across-the-board cut to all state agencies including higher education.

• $108 million in fund balance transfers.

• $53 million in contingent reductions that will require legislative action during the 2015 General Assembly session.

• $1.4 million in planned reversions.

• $37.5 million in savings from eliminating vacant positions and through an as yet to be announced voluntary early retirement program that will be offered to state employees.

T.Eloise Foster, O’Malley’s budget secretary, said the state is hoping that the combination of eliminating vacancies and voluntary retirements will trim 1,000 jobs from the state budget.

“When we did this before we had almost 600 people participate,” Foster said.

The moves were a parting effort by O’Malley to erase a current year budget deficit that has ballooned to $400 million and to set the table for incoming Republican Gov.-elect Larry Hogan to tackle a mounting projected deficit in the fiscal 2016 budget that exceeds $600 million.

O’Malley blamed the need for additional cuts on the lingering effects of a government shutdown and continued threats of additional federal budget actions.

“That’s what we’re contending with here,” O’Malley said. “We’ve had to bear the brunt and take it on the chin more than any other region because of the misbehavior in Congress.”

Environmental programs will also feel the pinch.

Included in the reductions approved Wednesday were $11.8 million from state and local Program Open Space, $2 million transferred from the Waterway Improvement Fund and nearly $1.4 million from the Chesapeake Bay Restoration Fund.

Nearly $161 million of the budget moves approved Wednesday will require legislative approval in the coming session.

Included in the cuts is a reduction of an increase in state payments promised to caregivers of the developmentally disabled. The 4 percent increase expected this year was approved as part of the bargaining that led to passage of a phased-in increase in the minimum wage.

Foster said the increase will be reduced to 2 percent retroactive to January 1.

Supporters of the increase said the move was disappointing.

“I thought, at the end of the day, they had an understanding of the position these DDA providers were in,” said Sen. Thomas M. “Mac” Middleton, D-Charles County and chairman of the Senate Finance Committee.

Middleton was the lead sponsor of the bill that increased the payments which were meant to help salaries for caregivers keep pace with the increases in the minimum wage. Those service providers told legislators last year that the lack of increases over the years have made it tougher to hire and retain qualified people who can often get jobs that pay better.

“Our providers will absolutely struggle to hire highly skilled workers who are needed to help people with disabilities live and work,” said Laura Howell, executive director of the Maryland Association of Community Services. “Families will be severely impacted. Nonprofit community agencies that provide these services will be forced to make very difficult choices. These cuts today are in the opposite direction of where Maryland should be heading. Our state should not be balancing its budget on the backs of Maryland’s citizens with developmental disabilities.”

The cut of roughly $4.5 million will mean that the state will also lose $4 million in related federal money.

“It doesn’t do us a whole lot of good to walk away and leave federal money on the table,” Middleton said.

Middleton said legislators will review the cuts that are sent to the General Assembly but worried that the state’s fiscal condition will make it difficult to restore the cut this year.