Senate Advances $13.8 Billion Budget


ANNAPOLIS (April 2, 2009) - The Senate gave preliminary approval to a $13.8 billion operating budget for next fiscal year Wednesday evening, calling for more than $900 million in cuts including reductions to local government, environmental and stem cell research spending.

Last week the House passed its version of the budget, cutting $825 million from Gov. Martin O'Malley's original proposal to settle on a $13.9 billion plan.

The Senate is expected to take a final vote on the budget and an accompanying budget reconciliation bill by Thursday. Representatives from the two chambers will then meet before this legislative session ends on April 13 to hammer out their differences and present a final product to O'Malley for his signature.

Both versions of the budget include $1.7 billion in federal stimulus money for this year and the next, with most of it going toward Medicaid and education spending. They also preserve a tuition freeze for in-state students at Maryland's public universities for a fourth straight year, and the Senate version includes provisions for an in-state tuition freeze for community colleges as well.

Both the Senate and House versions of the budget include deep cuts to local government and environmental spending.

The House budget plan cuts $102 million in state funding for local road maintenance projects, while the Senate version slices $162 million. The House version also has the state keeping $60 million in income tax payments usually sent to the counties.

Funding for the Chesapeake Bay 2010 Trust Fund is slashed from $31.5 million to $10 million in both versions. The fund was originally scheduled to receive $50 million per year when it was approved during the 2007 special session.

The House plan also calls for $118 million in transfers and cuts from a land preservation fund accrued through a tax on real estate transactions. The Senate version cuts an additional $65 million from Program Open Space.

Some of the reductions to the land preservation fund could be restored through funding from state-issued bonds.

Both chambers have targeted a roughly $5 million state public campaign financing fund last used by Republican gubernatorial candidate Ellen Sauerbrey in 1994.

The Senate's budget takes almost $3 million from the fund in order to pay for new optical scan voting machines. Meanwhile, the House is advancing a plan to use $2 million from the fund to pay for early-voting expenses.

Republicans have fought both chambers' proposals, calling them politically motivated since it's highly unlikely O'Malley will use public financing in his expected bid for reelection next year.

Sen. Andrew Harris, R-Baltimore County, voiced concerns over the state's willingness to use tax revenue for purposes other than initially intended and its reliance on bond money to replace cuts to program funding.

"Long term, keeping the spending up, keeping our taxing up and borrowing our way out of the problem is kind of what got us in the problem that we're in," Harris said.

The Senate passed an amendment offered by Harris requiring at least a $2 million balance in the public campaign finance fund.

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

"We've seen record declines in general fund revenues," said Sen. Ulysses Currie, D-Prince George's, and chairman of the Budget and Taxation Committee.

Once the Senate gives final approval to its budget plan, a conference committee will reconcile the numerous differences between the bills.

While the House approved full funding for an education formula that provides additional funding to K-12 schools in high-cost areas, the Senate version diverts $50 million from that fund to public school construction.

The House dedicated $18.4 million to stem cell research while the Senate limited stem cell grant funding to $5.4 million. Senators rejected an amendment that would cut all state funding for stem cell research.

The Senate also differed from the House by voting to pass 50 percent of costs associated with property valuation along to the counties, which would save $20.8 million for the state.

The Senate budget provides for $142 million in cash reserves in case of further revenue decreases, almost three times the $51 million called for in the House version. House leaders earlier in the session called for a $200 million to $250 million fund balance.

Capital News Service contributed to this report.

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