O'Malley Introduces FY 2008 State Budget

Record Funding For Education; Only 2.5 % Total Growth; Lower Rate Of Growth Than 9 Of 10 Last Budgets

ANNAPOLIS - Governor Martin O'Malley today released the O'Malley-Brown Administration's FY 2008 budget for the State of Maryland, just one day after taking office, with a total budget increase of only 2.5% over last year's budget and a lower rate of growth than 9 out of the last 10 budgets. The FY 2008 budget includes a record $400 million dollars for school construction, full-funding for the Thornton Education plan, full-funding of Program Open Space, more than a billion dollars for highway and transit projects, increased funding for stem cell research, public health and public safety.

"Maryland's budget is one of the clearest reflections of our values as a State," said Governor Martin O'Malley. "With annual deficits of $1 billion for the foreseeable future, the FY 2008 budget constrains spending of limited tax dollars, but makes critical investments in the priorities we share as a State to make Maryland stronger - investments in education, public health, open space and our environment, transportation, public safety and economic development."

O'Malley's first budget grows less than the Spending Affordability Limit set by the General Assembly and maintains a rainy day fund balance of 5% - more than $670 million. In FY 2008, the State of Maryland faced a deficit of approximately $400 million and the structural deficit is expected to exceed $1 billion in each of the next four years.

K-12 Education:

The FY 2008 budget provides $5.2 billion in K-12 Education funding including a $680 million increase in school aid - the largest ever - and $400 million in school construction. The FY 2008 budget fully-funds the Thornton Education plan and provides funding for teacher pension enhancements. O'Malley will also work with the General Assembly to pass legislation mandating the Geographic Cost of Education Index phased in beginning in FY 2009.

Higher Education:

The budget boosts investment in higher education by $192 million - including an 18% increase for community colleges, makes capital investments in our Historically Black Colleges and Universities and enables the University System of Maryland campuses and Morgan State University to enact an undergraduate in-state tuition freeze.

Public Safety:

The FY 2008 budget provides an additional $2 million to protect Maryland's families from sex offenders. The funds will be used to increase monitoring of sex offenders by Global Positioning Systems and to assist local law enforcement. The budget also provides $7 million to fund 155 new correctional officer positions and $33 million for a new 192-cell housing unit at the Maryland Correctional Training Center in Hagerstown. Funds are also allocated to expand the capacity the State Police Laboratory to analyze DNA samples and to ensure that all Maryland State Troopers have new handguns.

Environment and Agriculture:

In his first budget, O'Malley kept his campaign pledge to fully fund Program Open Space. The budget provides $289 million in land preservation programs and $138 million to improve local water and wastewater systems to help improve the health of the Chesapeake Bay. The budget provides funding for cover crops and triples Maryland's investment in the Maryland Agricultural and Resource-based Industry Development Corporation (MARBIDCO), to sustain agricultural businesses.


The FY 2008 budget provides an additional $10 million for stem cell research, a 66% increase to $25 million, expands drug treatment funding, and provides assistance to seniors through the Senior Prescription Drug Assistance program. The budget also restores healthcare benefits to legal immigrant families - including 3,000 children. In addition, over $100 million is provided to strengthen Maryland's healthcare provider systems, including increasing payments to physicians participating in the State's Medicaid Program.


Governor O'Malley is committed to undertaking a comprehensive review of Maryland's Transportation Trust Fund. The FY 2008 budget provides over $1 billion for highway and road projects across the state to reduce traffic, over $300 million for public transit projects, over $100 million for improvements and dredging projects to make the Port of Baltimore more competitive, and $119 million for state airport projects, including upgrades at Thurgood Marshall BWI Airport.

Jobs and Economic Development:

The FY 2008 budget makes strategic investments to continue Maryland's economic growth - and expand opportunity for our neighbors in every jurisdiction, including $70 million for business development programs (including $20 million to support small or minority business entrepreneurs), $16 million for the Maryland Arts Council, an increase of $1.2 million or 8% over FY 2007, $6 million in capital funding for the Neighborhood Business Redevelopment Program, $4 million for Rural Broadband Assistance funding to extend DSL service to 26 Eastern Shore communities, attracting industry and employment opportunities to the region, $2 million for the Sunny Day Fund to capitalize on extraordinary economic development opportunities for Maryland, $1 million for the new no-interest business loan program for disabled veterans and military reservists, $5 million for technology transfer/development and for incubator programs and $5 million in capital funding for the East Baltimore Biotechnology Park.

Source: Governor O'Malley's Office

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