By Anjali Shastry, Deidre McPhillips and Brian Marron
ANNAPOLIS—Gov. Larry Hogan’s first, $40.4 billion budget, released in detail Friday, boosts overall funding to education—though it cuts discretionary payments to some schools—and maintains planned road construction while paring back funding for Medicaid and state agencies and employees.
Hogan campaigned on a promise to support highway and road construction, and his budget affirms a $125.1 million increase requested by the Maryland Department of Transportation for major projects, a 68 percent increase over this year’s estimated spending of $183 million.
The $308 million capital budget for major projects is not new funding, but a continuation of projects that have already been in the planning phase, a state roads spokesman said. The total 2016 capital budget for state highways increased from about $1.23 billion to nearly $1.4 billion.
“It’s not like there are a ton of new projects. Projects are just coming due for construction this fiscal year,” said Chuck Brown, deputy director in the Maryland Department of Transportation’s Office of Public Affairs.
Funding to higher education increased by 1.3 percent, bringing the state funding for the University System of Maryland to $1.2 billion. The total 2016 fiscal year budget for the university system is $5.1 billion.
The overall spending for public schools increased by $45.3 million to $6.1 billion, but a state formula for additional spending to some jurisdictions, the geographic cost of education index, was cut in half, which means schools in more expensive counties like Prince George’s and Montgomery will see their hoped-for education budgets cut.
“You don’t hurt one jurisdiction for another and say it’s to save money,” said House of Delegates Assistant Majority Leader Tawanna P. Gaines, D-Prince George’s. The index is not a mandate, so the governor could cut it completely, but it is necessary, she said.
State Senator Paul Pinsky, D-Prince George’s, said investing in students will keep them out of jails, which are a much more costly investment.
“I believe that investment up front will pay off in the long run,” Pinsky, who is the vice chair of the Education, Health and Environmental Affairs committee, said.
Senate Minority Leader J.B. Jennings, R-Baltimore and Harford counties, said he did not support the scaled spending index and counties “should be pleased and accept what their governor has done with the GCEI.”
“It’s unfair to some of the other counties. It gives more support to larger counties than to small, it’s about looking for a way to be fair to all the counties in the state,” he said.
Hogan also announced Thursday a 2 percent across-the-board cut to state agencies.
“When you do an across-the-board cut, sometimes you affect the wrong people. You make the easy cuts instead of the right ones,” said state Senator Theodore Sophocleus, D-Anne Arundel.
State employees would also see a rollback in July of 2 percent raises that took effect this month, and subsequent cost-of-living raises will not take effect at all. This is especially tough for state employees who have just been through two or three years of furloughs, Sophocleus said.
“State employees are mad as hell,” said Jeff Pittman, the communications director for AFSCME Maryland Council 3. “Some of them voted for Hogan because he said he wanted to reduce waste, fraud and abuse. He did not campaign on a pay takeaway from their middle class families.”
Jennings said his jurisdiction would face cuts, but he was not overly concerned about the scope of it.
“They’re not facing substantial cuts, just cuts,” Jennings said. “Not big or small. These are cuts the county can work with, and it’s what’s required to balance our state budget.”
Hogan’s proposed budget includes a $50 million reduction in funding to the state’s Medicaid program for the 2016 fiscal year. An increase in enrollment and costs for hepatitis drugs contributed to a $200 million shortfall to this fiscal year’s budget for the health program.
Delegate Clarence Lam, D-Baltimore and Howard, said that he thinks the cuts will make it difficult for individuals on Medicaid to receive the care they need. Physicians who treat Medicaid patients are reimbursed less than they would be otherwise, Lam said, and this cut will reduce the repayments even more, discouraging doctors from treating patients on Medicaid.
House Minority Whip Kathy Szeliga, R-Harford, who was on the budget committee for four years, supported Hogan’s fiscal plan, calling it “structurally sound.”
“Over the last eight years, the previous administration raised taxes to try to fix the budget, but were never successful,” Szeliga said, touting Hogan’s lack of layoffs while still funding education and not raising taxes.
Hogan’s budget is not final. The legislature can cut the budget, but not increase it. This year, it will be introduced in the House of Delegates, who can mark it up with their revisions. It will then go to the Senate, and then a conference committee, which will issue a report. Once both bodies vote to approve the report, the final budget goes to the governor.
The General Assembly is mandated to vote on the final budget by April 6. The legislature is scheduled to adjourn on April 13.