ANNAPOLIS — A proposed 2 percent across-the-board cut to state agencies to balance Gov. Larry Hogan’s first budget is drawing scrutiny from analysts and legislators.
“This is a very dangerous approach to budgeting,” said Warren G. Deschenaux, director of the Office of Policy Analysis.
“I’ve heard it said that anyone can cut the budget,” Deschenaux told legislators. “Certainly, anyone can cut the budget like this. You really should know what you’re doing.”
Deschenaux made his comments during a fiscal briefing to House and Senate legislators, who will begin to work on the $40.3 billion budget Hogan introduced last week. Included in that budget was a proposed $16.2 billion in general fund spending.
Hogan said his first budget managed to eliminate more than $800 million in projected structural deficits in just his first 24 hours in office. The spending proposal, from which the legislature can cut but not add, contains a 2 percent across-the-board reduction in departments. Employees will not be subject to furloughs or layoffs but Hogan does intend to eliminate a 2 percent raise negotiated with his predecessor, former Gov. Martin J. O’Malley.
The analysis by Deschenaux and his team is the first breakdown of Hogan’s inaugural budget for legislators as they begin the process of moving the spending plan through the legislature before the end of the 90-day session.
Deschenaux, showing lawmakers a graph, said Hogan’s proposed budget does manage to recouple spending and revenue at least in the first year.
“You’ll see spending levels in this budget take an abrupt turn,” he said, comparing the shape made by the two joining lines to an “origami swan.”
“But just how beautiful it is, you’ll have to evaluate as we get into this (budget) debate,” Deschenaux said.
Another matter for debate will be whether Hogan can simply eliminate the proposed cost-of-living increases promised to state employees.
“It’s not clear that the governor can simply do this or if that needs to be negotiated,” Deschenaux said, referring to Hogan’s proposal as “the un-COLA.”
“We’re breaking new ground here in interesting ways,” Deschenaux said. “I don’t think this budget is finished.”
Left out of the budget were spending plans that would fully restore state aid to counties and to more than 160 incorporated towns and cities in the state — something Hogan promised late in his campaign.
But legislators expressed concern for state employees and the effects of the cuts to state agencies.
Deschenaux said legislators need state secretaries to “prepare a plan for getting to the numbers.” He also told legislators they could take matters into their own hands by making their own agency cuts.
“One thing I’d ask you to think about: Use the cuts to reduce the 2 percent (across-the-board reductions),” Deschenaux said. “So there’s more known and less is unknown. It’s hard to know what you’re doing when you don’t know what that 2 percent is or isn’t.”