Hundreds of millions of dollars in state aid could be in jeopardy as Gov. Larry Hogan considers whether he will release money set aside by the General Assembly.
The legislature fenced off the money earlier this year — effectively barring Hogan from spending it on anything other than the purposes for which it was reserved. One top Democrat said lawmakers restricted the money as a way of ensuring their priorities received attention.
“I know the governor bristles when we do this, but it’s really the only way for us to set aside some money for the things the legislature thinks are important,” said state Sen. Nancy King, D-Montgomery and chair of the Senate Budget and Taxation Committee.
Michael Ricci, a Hogan spokesman, said in a statement that the governor is reviewing the fenced-off funding in the budget and is expected to make a decision in the coming weeks. The fiscal 2020 budget begins July 1.
“It is unfortunate that the legislature pitted one project against another, particularly with our state facing a $961 million budget deficit,” Ricci said.
In Maryland, the governor is powerful in terms of setting the budget. The legislature can cut but may add to the state spending plan only if it also finds new revenue. The legislature can also work with the governor on supplemental requests or fence off money for specific purposes, but it cannot force the governor to spend the money.
“The legislature has to have some input,” King said.
But Hogan’s spokesman said the legislature did not seek to work out an agreement with Hogan before fencing off a portion of the budget.
“The legislature does not collaborate with, inform, notify, or send carrier pigeon, to alert us to their intent to fence off these dollars,” said Ricci. “We see the full list when you do, and the governor then has to review all of the decisions.”
Added to that are concerns about looming recession as the national economy sets a new record for consecutive months of expansion.
Legislative Democrats in recent weeks have ratcheted up pressure on Hogan on social media.
King said she does not expect Hogan to release any of the money.
“This is the governor saying, ‘Your priorities aren’t important, this is what I say the budget is going to be,'” said King.
Potentially at risk is $127 million for school construction and renovation; nearly $4 million meant to clear a backlog of untested rape kits; and more than $3 million in additional aid to the cash-strapped Baltimore Symphony Orchestra.
“In the grand scheme of things, in a $46 billion budget this amount isn’t going to make or break the state,” said King, who acknowledged that some tough budget decisions could come next year.
Hogan and the legislature have crossed swords on fenced-off funding before.
In 2016, Hogan drew a line in the sand with lawmakers and vowed to not release any funding fenced off by the General Assembly. Lawmakers that year set aside $80 million in state aid for teacher pensions, renovation of aging schools, Medicaid reimbursements and the demolition of the Baltimore City Detention Center.
Hogan opted instead to allow the unspent money to revert to the rainy day fund in anticipation of a flattening economy and concerns about lower than expected revenues.
In return, the legislature held hostage a $20 million economic development proposal for Northrup Grumman. The two sides later cut a deal in which the Hogan would release $20 million for aid to teacher pensions in return for the aid to the aerospace company.
The additional funding this year for the Baltimore Symphony Orchestra has garnered much of the attention.
“We have $240 million that the legislature played political games with and put into a fenced-off area, which we said repeatedly we’re not going to allow them to play those kind of games,” Hogan said last week. “I don’t know why there is such an uproar over the $1.8 million for the orchestra when we have $239 million for other really important projects also that we’re going to have to talk about.”
The orchestra has locked out musicians in a deepening contract dispute. Last month it lopped 12 weeks off its season to save money. Hogan allowed the bill with additional funding, which also creates a work group tasked with making recommendations to improve the orchestra’s financial situation and grow its audience, to become law without his signature.
“We continually pour millions and millions of dollars into the BSO but they’ve got real serious issues and problems with the management with losing the support of their donor base, and the legislature took the money out of the budget and fenced it off,” Hogan told reporters. “I don’t know what the resolution is going to be.”
When asked if he planned on releasing the additional funding for the symphony, Hogan responded: “Probably not.”
King said she hopes Hogan will release some of the overall fenced-off funds, even half.
“If not we go back next year,” said King. “We don’t have any other recourse.”