ANNAPOLIS — A supplemental budget proposed by Gov. Larry Hogan is raising questions about whether the first-term Republican is going back on a promise not to use gimmicks to pay for state spending.
At issue is the use of special funds — monies earmarked for cigarette cessation or open space — to pay for spending proposals in Hogan’s first budget. Senior aides to the governor say the uses conform to the intent of the special funds or to uses set under previous governors.
Some legislators say the supplemental budget proposed Thursday by Hogan is not that different from budget moves made by previous governors.
“It is interesting that when (Hogan) promised a change in pace, a change in direction for the state of Maryland, I don’t think that people assumed that meant changing from O’Malley back to Glendening but maybe a change into something fresh,” said Sen. Richard S. Madaleno Jr., D-Montgomery County and vice chairman of the Senate Budget and Taxation Committee.
Hogan proposes nearly $44.8 million in additional spending in his second supplemental budget, including funding for 100 new Maryland state troopers, re-opening the Annapolis barracks closed under Gov. Martin J. O’Malley, paying for tax breaks in retirement income for first responders and military retirees, and tax breaks for businesses that contribute to financial assistance programs at non-public schools.
Del. Maggie McIntosh said she wasn’t surprised by Hogan’s moves in the supplemental budget despite the promises.
“Welcome to governing,” McIntosh said. “That wasn’t as much of a surprise because he used the transfer tax in his operating budget.”
Hogan moved the money, typically earmarked for Program Open Space, into the state’s general fund.
Supplemental budgets are not uncommon though the Maryland Constitution technically requires that they be used only to correct errors or omissions. In practice, those proposals are used to fix errors, add or subtract funding — especially in the first year of a new governor’s term when much of the planning was done by the previous governor — and to negotiate with the legislature on differing priorities of the competing branches of government.
Hogan proposes to use money from a number of sources, including the cigarette restitution fund, speed monitoring system, the Maryland Emergency Medical Systems Operations Fund and premiums paid by investors on state bonds.
“These are old tricks that have been sitting in the files of the Department of Budget and Management for quite some time,” Madaleno said.
Del. Kathy Szeliga, R-Baltimore and Harford counties, said the issue of the use of special funds was “a fair question” but she didn’t see a problem. She said the governor’s proposed supplemental budget was not out of line.
“I think this is appropriate to help move his agenda through,” Szeliga said. “What did he put in there? Police, retired military — two of his priorities. He talked about tax relief, tax relief, tax relief and this body has refused to move any of that so he’s getting some tax relief in the supplemental.”
But last year, Hogan said such tactics would not be used, calling them “gimmicks.”
“We don’t want to keep doing the same things that have caused the problem to begin with,” Hogan said in December news conference about the budget when asked if he would use funds such as the Transportation Trust Fund in his first spending plan — a tactic he and other Republicans criticized O’Malley for over the last eight years.
Hogan went on to say that he did not want to be “breaking into the piggy banks and robbing all the trust funds.”
When asked if he wasn’t drawing himself a pretty small box in which to handle a $750 million structural deficit, Hogan said:
“It really is. That why we’ve got our work cut out for us.”
Joseph Getty, Hogan’s chief legislative director, said the special funds used in the supplemental budget plan do not violate Hogan’s promise.
“When the governor made those comments about the use of special funds, what he was saying was that he wasn’t going to use special funds for uses other than what they were dedicated to,” Getty said.
Getty said funds set aside in the speed camera and emergency system funds are used for public safety purposes and using the money to pay for overtime for police and correctional officers is consistent with that goal. The $33.2 million in additional bond revenue was going to be used in part to pay for adding state police and re-opening the Annapolis barracks.
“The only think that someone might be able to be critical of is the use of the cigarette restitution money,” Getty said.
Hogan plans to use that $5 million to pay for the non-public schools scholarship program.
Typically, cigarette restitution funds have been used for health-related programs, including smoking cessation, but in the last five years they have paid for education-related programs, including textbooks. Former Gov. Parris N. Glendening used the money in 2002 to help pay for the first year of the state Bridge to Excellence education program, commonly called as Thornton funding.
“If we were using these for something like the Department of Aging then we’d be violating that policy that the governor laid out in December but we’re not,” Getty said.