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Hogan wants to squeeze $86.3 million out of this year’s budget

Departments will be asked to cut $67.2 million

Maryland’s budget is about to get a little tighter. 5a-budget-bpw-brinkley-davidrmf11

State departments will be asked to help reduce spending by about $67.2 million, according to state Budget Secretary David R. Brinkley.

Accompanied with balance transfers, Brinkley said, the state will seek $86.3 million in budget actions from the Board of Public Works on Sept. 6.

“It is proactive budget management that we’re dealing with here,” Brinkley said. “We’re trying to get ahead of something that we know is coming forward and, I think, responsibly doing so.”

Brinkley said a projected cash balance of $90 million for the end of the year that was left by the lawmakers isn’t enough to deal with expected budget shortfalls at agencies this year.

“Our whole mission is to be ahead of the curve,” Brinkley said.

And while the General Assembly’s top budget analyst called the list of reductions unsurprising and prudent, some Democratic lawmakers the moves are the result of Hogan’s political rhetoric and a failure to lead on budgetary issues.

State law allows for the governor, through the three-member Board of Public Works he chairs, to reduce the budget by as much as 25 percent while the legislature is out of session. Three governors — two Democrats and one Republican  preceding Hogan — have also used the process.

Brinkley, speaking to reporters during a Thursday conference call, said there was no indication yet that revenues this year will be less than expected.

“The budget itself is still balanced,” Brinkley said. “But what we are trying to do is deal with the known challenge we have in crafting the (fiscal 2019) budget.”

Brinkley said most reductions to state agencies fall within the 1 to 2 percent range.

Included in the actions are:

  • A $22.2 million reduction in the Department of Health, including $10 million from the decreased average stay in hospitals.
  • $5 million in excess balances in the state cigarette restitution fund to offset Medicaid expenses.
  • $8 million from facility renewals, administrative expenditures and 30 vacant positions at the University System of Maryland. Brinkley said similar proportional reductions would be taken at Morgan State University, St. Mary’s College of Maryland, and the Baltimore City Community College.
  • $8.4 million from the Department of Public Safety and Correctional Services Department. It is not clear how much of this funding, if any, will come from vacant correctional officer positions at the understaffed department.
  • $7.1 million from the Department of Human Services, with more than half of the cut coming from the temporary cash assistance program.
  • $1 million to the Forest Department from Program Open Space.
  • More than $6 million in disparity grants to local governments. Typically Baltimore City and Prince George’s counties are some of the larger recipients. Brinkley said the new funding level is identical to what was provided in the previous budget.
  • Nearly $2.1 million in aid to private, non-state colleges and universities under the Sellinger formula. The cut amounts to a 50 percent reduction in increases in the current budget.

Brinkley said making the cuts now allowed agencies to better absorb the reductions and to build a cushion for dealing with a projected fiscal 2019 deficit of three-quarters of a billion dollars. The budget secretary said the deficit is driven in part by mandated spending.

“This is simply unsustainable and frankly is  something the governor has warned about and provided remedies to every year since taking office,” Brinkley said, referencing legislation proposed by Hogan that would allow the governor to override mandated spending under certain budgetary circumstances.

Those bills have died in committee in each year they were proposed.

Hogan, speaking on The C4 Show on WBAL, said he had not reviewed the proposal Brinkley discussed with reporters but said the actions were necessary.

“They’re not drastic cuts but it’s important to keep our budget under control,” Hogan said. “We’re getting to the point where we’re in a difficult spot again, we’re in a hole again.”

Part of that hole includes about $750 million in expected shortfalls in the coming fiscal 2019 budget. An analysis by the Department of Legislative Services projects that spending is expected to grow by more than 5 percent while revenues are projected to grow at 3.5 percent.

A report by the agency highlighted concerns about both spending and a need for additional tax revenue.

“We’ve illustrated that the dynamic of spending and the dynamic of expected revenues are incompatible, said Warren G. Deschenaux, executive director of the department and the legislature’s chief budget analyst.

The Board of Public Works’ actions proposed by the Hogan administration are similar to ones taken by previous governors, he added.

“A list like this isn’t surprising,” Deschenaux said. “I would even say it’s prudent given the realities we’re heading into.”

Part of those realities, Deschenaux said, include concerns of another federal government budget battle and potential shutdown.

Deschenaux said lawmakers and the governor will likely continue the pattern of addressing growing projected deficits — estimated to reach $1.5 billion by fiscal 2022 — on a year-by-year basis rather than hammering out a longer-term solution.

“I’ve yet to get the inkling that there is a grand bargain to be made,” Deschenaux said.

Democratic lawmakers, however, differed from Deschenaux’s assessments.

Sen. Richard S. Madaleno Jr., D-Montgomery County and vice chairman of the Senate Budget and Taxation Committee, said Hogan’s proposed actions “are both prudent and highly political.”

Madaleno, who is also a candidate to challenge Hogan in 2018, said the governor is attempting to blame the legislature for his own failures to develop a budget policy and grow the economy in the state.

“If he wanted to tackle these problems he could do it,” Madaleno said. “He could do things that he finds politically unpalatable. He doesn’t want that.”

One of those things, Madaleno said, would be extending the sales tax to online sales by out-of-state companies. Legislative budget analysts say that and extending the sales tax to services could generate as much as $200 million annually.

“He’s backed himself into a political corner and is blaming the legislature for the problem he is in,” Madaleno said of Hogan, who has pledged to not raise taxes.

Del. Maggie McIntosh, D-Baltimore City and chair of the House Appropriations Committee, criticized the proposal, saying there was no need.

“This is the first time in my memory that a governor has come in and said, ‘Revenues are coming in fine, everything is OK but we’re still going to jump in and make these cuts because we see, and DLS is projecting, there are maybe deficiencies we’re facing,” McIntosh said. “He could wait for January to make these adjustments.”

Hogan’s use of the Board of Public Works to make the cuts, while legal, isn’t transparent and denies the public and government agencies a chance to comment on the moves, she said.

Douglass Mayer, a Hogan spokesman, said the governor is using a process that has been available for more than 150 years.

“It’s a shame the delegate doesn’t appreciate its importance,” Mayer said of McIntosh. “That said, since she is such a big fan of transparency, we look forward to her joining with the governor next session in supporting the (video) live streaming of all floor sessions of the General Assembly, but we aren’t holding our breath.”


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