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Bill aims to put curbs on BPW’s budget-cutting powers

The Board of Public Works at a 2018 meeting. From left, Treasurer Nancy Kopp, Gov. Larry Hogan and Comptroller Peter Franchot. (The Daily Record/File Photo)

The Board of Public Works at a 2018 meeting. From left, Treasurer Nancy Kopp, Gov. Larry Hogan and Comptroller Peter Franchot. (The Daily Record/File Photo)

Democratic lawmakers are seeking additional limits on the sweeping powers to cut the state budget now held by Maryland’s governor and the Board of Public Works.

Del. Marc Korman, D-Montgomery and a member of the House Appropriations Committee, said his legislation aims to bring more public transparency to the state budget process when the legislature is not in session. The bill, however, is seen by the administration of Republican two-term Gov. Larry Hogan as an attempt to micromanage the budget out of session and make it more difficult to balance the budget in times of fiscal instability.

“Nothing we’ve done (previously) has hamstrung their ability to take action despite their claims that it would,” said Korman.

The board, a three-member panel chaired by the governor and which includes the comptroller and the legislature-appointed state treasurer, is a unique body among state governments in the United States. In addition to having the authority to approve contracts, the board has the power to reduce the state budget during times of fiscal crisis when the legislature is not in session.

The panel can reduce budgets of individual agencies by as much as 25%.

The process is frequently noted by the three major bond rating companies as a strength for the state, which is one of a handful to hold a triple-A rating, allowing it to borrow money at very low interest rates.

Five years ago, Korman sponsored a bill — now law — that required the governor and three-member spending panel to publicly provide three business days advanced notice of proposed cuts to a department or other state program.

“Honestly, this bill micromanages how things happen,” said state Budget Secretary David Brinkley, who once as a Republican senator sponsored a bill that would have imposed a required seven-day notice and limited cuts to 10% of an agency’s budget. “Making midyear reductions is already a daunting and challenging task. This bill unnecessarily causes further bureaucratic delay.”

The budget secretary’s arguments are not new and were made five years ago, Korman said.

“They’ve still be able to make numerous budget cuts with the situation called for it just with full transparency and in the light of day,” said Korman.

Since the change, Hogan and the BPW have been able to make cuts totaling more than $683 million over four fiscal years including last summer when the board made cuts of over $400 million to respond to the COVID-19 pandemic.

Korman’s bill would build on previous efforts, expanding the notification period to 10 days.

This summer, Hogan proposed the board approve a cut to funding for security at some Maryland Jewish facilities. The Friday afternoon public notice met the requirements of state law but left the Baltimore Jewish Council scrambling to respond before the start of religious observances from Friday evening through Saturday.

“I don’t know if you’ve ever tried to get several organizations to approve and sign on a letter — and if they’re a nonprofit also getting their boards to approve and sign off on that letter — in a matter of hours,” said Sarah Miicke, deputy director of the Baltimore Jewish Council. “It’s nearly impossible.”

The bill proposed by Korman would also require reductions be taken at the budget line level rather than a lump cut on an agency.

Brinkley called the provision “tremendously cumbersome.”

“Typically, what we’re trying to do is preserve resources for programs that work and do a haircut for something new that is not nearly as effective,” said Brinkley.

The bill would also limit cuts to a maximum of 25%, a figure that Korman said was not as firm under previous administrations as it might seem.

“This has not been a issue with the Hogan administration” but under former Gov. Martin O’Malley, a Democrat,  the Maryland Energy Administration, the Department of Information and Technology, and the Department of Housing and Community Development “all faced multiple cuts at multiple Board of Public Works meetings through the year that amounted to more than 25% of the budget for those agencies,” said Korman.

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