Hogan touts ‘too good to be true’ Maryland budget

ANNAPOLIS — Gov. Larry Hogan said his proposed fiscal 2018 budget will do what is seemingly impossible — provide record increases in spending for education and other programs, increases for police and targeted tax cuts while simultaneously spending less.

Hogan made the announcement — without specific details or budget books for the press — during a morning news conference that followed a breakfast meeting at the Governor’s Mansion with Democratic and Republican fiscal leaders.

“It sounds too good to be true, but it really is true,” Hogan said, adding that “almost nothing” was cut.

“There were a couple of little, tiny decreases in some places because fewer people are using some services,” Hogan said.

Hogan’s budget, which is not scheduled to be released publicly until Wednesday, contains $17.1 billion in general fund spending. That figure is lower than the current fiscal 2017  general fund operating budget of $17.205 billion passed by the legislature last year. But, when more than $80 million in budget reductions implemented by the Board of Public Works in November are taken into account, Hogan’s proposed general fund budget is statistically flat.

Details and specific numbers for the budget weren’t immediately available at the news conference. Budget books containing the full spending plan, as well as an expected budget bill that will contain specific cuts and show, at least in part, how the governor is closing $750 million in revenue shortfalls in the fiscal 2017 and proposed fiscal 2018 budgets, won’t be available until Wednesday.

Hogan spent an hour Tuesday morning briefing Republicans and Democrats on the budget though many said they left without a sense of specifics.

Reaction to the legislative budget briefing was mixed. Some of it fell, expectedly, along party lines.

Senate President Thomas V. Mike Miller Jr., speaking with reporters following the breakfast with Hogan, called the spending plan “a good-news budget. It takes some of of the money from the rainy day fund, which is fine. It’s less cuts than we thought it was going to take. Supposedly education is fully funded, which is our priority. So, we’ll see.”

Other lawmakers said they didn’t have enough details.

“Basically they told us, they gave us their — I don’t want to call it spin, it’s real — how good their budget is going to be in terms of education, public safety, so on and so forth,” said Del. Maggie McIntosh, D-Baltimore City and chair of the House Appropriations Committee. “I mean, really, very few details about how they achieve this.”

Sen. Edward J. Kasemeyer, D-Howard and Baltimore Counties and chairman of the Senate Budget and Taxation Committee, said he was also looking for details.

“The governor and his staff have done a good job,” Kasemeyer said. “They seem to be weathering the storm in their mind. They’ve got a plan that works. Obviously we don’t have any details, but I’m saying I’ll credit his staff with doing a good job.”

Kasemeyer said he is concerned about how federal actions, including a potential repeal of the Affordable Care Act, will affect Maryland.

“That’s almost impossible to anticipate so they have planned as if nothing will change from a federal, Medicaid perspective,” Kasemeyer said.

McIntosh and the House of Delegates will get first crack at Hogan’s budget once it is officially introduced in the legislature Wednesday. One key component of the package will be a bill known as the Budget Finance and Reconciliation Act, or BRFA (pronounced Ber-Fah), which will likely include details about cuts to mandated spending, including programs in Baltimore City that were approved last year. The bill may also provide some insight into how Hogan intends to close $750 million in revenue shortfalls over the current and upcoming budget year.

“The BRFA, which they did not get into any great detail, is where it is,” McIntosh said. “I did ask the question about ‘Where did you get the money for all these nice enhancements, all of which are needed?’ Remember the Baltimore package last year, it’s not funded in this budget. The BRFA gets rid of them.”

“They eliminated all of those in the BRFA, all or most,” McIntosh said.

Hogan last year expressed support for the so-called Baltimore “Wow package,” which would have committed nearly $300 million over five years for projects, including the following:

• $5 million to establish a program for middle school students that would fully pay for college.
• $18 million a year for five years for a ramped-up plan to demolish abandoned vacant homes and revitalize neighborhoods similar to a plan announced earlier.
• Nearly $17 million for city parks.
• Funding to expand service at the Enoch Pratt Free Library system to 12 hours per day and seven days per week.
• After-school programming.
• An adult education program that would allow students to work toward a high school diploma rather than an equivalency certification.
• Incentives for businesses to locate around anchor universities including the Johns Hopkins, Morgan State, and University of Maryland, Baltimore.

But Hogan balked when the legislature included language mandating that he spend the money annually.

Hogan, speaking to reporters Tuesday, said there would be $22 million for demolition of vacant properties that he had announced last year.

“After we did that, the legislature wanted to get credit for it, (House Speaker) Mike Busch came in and mandated us to do what we were already planning to do and already announced and already funded. So, we’ll continue to fund that but they asked for a whole lot of other spending that there won’t be money for.”

Hogan said the new mandated spending for those programs was more than $500 million.

The governor declined to say when those programs would be fully funded. Instead, Hogan said his administration “has put more money into Baltimore City than anyone else. They get more of the school funding. They get more of the school construction funding. We put about $2 billion into the city, I think, altogether. We pay for things in the city that we don’t pay for anywhere else.”

One move Hogan will use to cover some of the spending is to take about $180 million from the state’s rainy day fund. Officials said that it will still leave the mandatory 5 percent in the account that is closely watched by bond rating agencies.

“I think it’s interesting that they were very opposed, Republicans were very opposed to, O’Malley ever touching the rainy day fund,” said Sen. Richard S. Madaleno Jr. D-Montgomery and vice chair of the Senate Budget and Taxation Committee. “It was interesting that now that’s the first place (Hogan) has gone.”

Madaleno was also skeptical of the lack of detail provided.

“Obviously in their presentation, which I am sure you’re going to see, they don’t have a chart up that says, ‘Here are the gimmicks,'” said Madaleno. “It all sounds very good in their PowerPoints. It will be interesting to see the details. I think a lot of it is based upon some gimmicks and rescinding everything he didn’t want us to do last year.”

Highlights of Hogan’s budget proposal:

• Total operating budget: $17.1 billion
• Maryland Medicaid program: $11 billion
• K-12 education investment: $6.4 billion
• Transportation infrastructure and economic development investment: $2.8 billion
• Funding for mental health and substance abuse disorder services: $1.3 billion
• University System of Maryland funding: $1.35 billion
• Community college funding: $256 million
• Chesapeake and Atlantic Coastal Bays 2010 Trust Fund: $51.3 million