House Passes Budget, Cuts $825 Million


ANNAPOLIS (March 27, 2009) - The Maryland Senate is ready to put its own imprint on the state budget after the House late Thursday approved $825 million in cuts to Gov. Martin O'Malley's already lean fiscal 2010 budget.

The House overwhelmingly passed a $13.9 billion operating budget which Democratic leaders said will preserve vital educational and health care services.

"This is a budget that is, in fact, very prudent," said Delegate John Bohanan, D-St. Mary's. "We have made very tough choices but we have protected the priorities that all Marylanders expect us to protect."

The budget now goes to the Senate, which could begin discussions as early as next week.

"I think the Senate wants to go further in making some of the cuts permanent," said Senate President Thomas V. Mike Miller Jr., D-Calvert, on Tuesday. "They recognize this budget is not sustainable in the future."

The Senate has indicated it might differ from the House in terms of replacing some of the state's medevac helicopters and stem-cell spending.

After the Senate passes a budget, representatives from the two chambers will meet to iron out any differences.

A spokeswoman for O'Malley said it's too early to comment on the budget, since it could change dramatically as it works its way through the upper chamber.

"The governor is continuing to work with the General Assembly to protect his priorities," said Christine Hansen.

Lawmakers are required by law to pass a balanced budget before the legislative session ends next month.

During a sometimes spirited debate Thursday evening, House Republicans criticized the budget proposal, calling for greater cuts to combat the state's structural deficit shortfall currently plugged by federal stimulus money.

"You can talk all the stimulus you want, and in two years it's gone," said Delegate Warren Miller, R-Howard. "Much like the drug addict that starts a drug addiction, once you spend this money you won't be able to stop."

The House cuts come in response to the recently-announced $1.2 billion decline in tax and other revenue projections for the next two fiscal years. O'Malley's original budget included provisions for only $600 million in write-down over that time.

State leaders have repeatedly blamed the falling revenue projections on the worldwide economic crisis, but some Republicans Thursday evening fingered the tax hikes passed in 2007 as a reason sales tax revenues have declined.

Responding to Republican criticism, House Democrats pointed out the House plan cuts the state's operating budget by 2.2 percent from this year's spending and is lower than fiscal 2008 and 2007 levels, after adjusting for inflation.

In the House budget, local governments will bear much of the burden despite suffering from budget woes of their own. The House voted to cut $102 million from state funding for local road projects and to keep for the state $60 million from income tax payments usually sent to the counties.

While some local government spending will be cut from the state budget, House Democrats said, many counties will receive stimulus funds directly from the federal government.

The House budget includes $1.7 billion in federal stimulus money for this year and the next, with most of it going toward Medicaid and education spending. It also preserves an in-state tuition freeze for state universities for a fourth straight year, one of O'Malley's biggest legislative priorities.

The House version of the budget includes only $51 million in cash reserves, far short of the $200 million to $250 million targeted by House leadership earlier in the session.

Republicans criticized O'Malley, a Democrat, for leaving much of the cutting responsibility to legislators.

"We need a governor to show vision to address these long-term structural problems," said Minority Whip Christopher Shank, R-Washington. "He submitted a budget that left the burden to the General Assembly."

State revenues are projected to fall hundreds of millions of dollars below spending in coming years, forming a structural deficit.

Democrats also acknowledged the need to fix the state's structural deficit.

"Our work is not finished because the state continues to have a large structural shortfall," said Delegate Norman Conway, D-Wicomico, who is chairman of the Appropriations Committee.

Miller and House Speaker Michael Busch, D-Anne Arundel, recently announced plans to launch a legislative workgroup to examine the sustainability of state spending. The group will start its work following the session.

Capital News Service contributed to this report.

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