General Assembly Passes $42 Billion Operating Budget with Little Controversy

ANNAPOLIS (March 29, 2016)—Though the relationship between Republican Gov. Larry Hogan and the Democratic-controlled General Assembly has been contentious this legislative session, the animosity may have subsided for what legislators are calling the easiest budget negotiation process in years.

Both chambers of the General Assembly voted Tuesday to pass a final version of Hogan's operating budget with relatively little fuss, cutting $68 million of the $42.3 billion budget.

The budget unanimously passed in the Senate by a vote of 45-0, and passed in the House by a vote of 130-7.

"It's been the best, easiest in terms of levels of stress and differences," Senate Senate Budget and Taxation Committee Chair, Edward Kasemeyer, D-Baltimore County, said of negotiations. "Everybody was very accommodating."

Hogan's budget fully funded several Democratic legislative priorities—like public K-12 education and higher education—which removed a lot of tension, Kasemeyer said.

The biggest sticking point, which Kasemeyer said wasn't all that contentious, was the issue of proposed aid to nonpublic schools. Hogan proposed $5 million for grants to private schools to match contributions from businesses, but the General Assembly modified that proposal, turning it into a scholarship program for the state's neediest students to attend private schools.

"It is especially exciting to see that both the Senate and House are backing our fight to provide scholarships for students from low-income families to attend nonpublic schools," Hogan said in a statement, despite the fact that that the governor's plan was eschewed for the student aid.

This year's relatively smooth budget process stands in stark contrast to last year's budget battle.

In his first term, Hogan tried to cut spending and taxes while the Democratic legislature fought to secure funding for their legislative priorities, including education spending, state employee pay raises and subsidies for physicians who accept Medicaid.

"A fiscally responsible budget is our number one priority and it is the most important bill that the General Assembly will pass," Hogan said in a statement. "Its completion weeks before the end of the legislative session sends a strong message to Marylanders that the executive and legislative branches work better when they work together."

House Appropriations Committee Chair Maggie McIntosh, D-Baltimore, said the conference negotiations went smoothly, as there were "very few differences" between the House and Senate versions of the budget.

The final budget passed Tuesday is also very similar to the budget Gov. Hogan originally proposed, she said. In Maryland, the governor sets the budget and the legislature can cut money, but it can't add. If legislators want to add money for a program, they can cut that money from the budget and "fence" it off.

"The governor came in with a budget that fully funded education, healthcare and our priorities, and so there was little to argue with there," McIntosh said Tuesday.

After introducing his initial budget proposal on Jan. 20, Gov. Hogan submitted three supplemental budgets to fund the construction of a new Prince George's Regional Medical Center, address blight in Baltimore, and provide additional funding for K-12 education, University System of Maryland construction projects and heroin addiction prevention and treatment programs.

McIntosh said the budgetary conference committee, which met Monday night, was "very pleased" with the budget's fiscal responsibility.

The budget leaves Maryland with a $400 million balance and $1 billion in the rainy day fund.

For education, the budget allocates more than $6.3 billion to public schools, according to a conference committee report.

"The budget also includes $19.4 million for five school systems that have lost enrollment and aid in recent years," the report said. Funding for Maryland colleges and universities increases about 6 percent, while undergraduate tuition rates will increase by 2 percent, according to the report.

Under the budget, total funding for Medicaid approaches $10 billion, and spending on substance abuse disorders increases by $12.1 million, including $5.4 million for new and expanded services and treatments, the report said.

State legislative analyst David Juppe said substantively, the legislature is passing a very similar budget to the one Hogan originally proposed. Hogan originally allocated $53 million for transportation aid funding, which the General Assembly cut to $23 million, with $19 million going to municipalities and $4 million going to local jurisdictions.

"I personally think the local jurisdictions came out on the losing end in this one," said Delegate Wendell Beitzel, R-Garrett and Allegany.

The ease of negotiations may also be due to Maryland's economic standing, which Juppe said has significantly improved since the recession of 2008.

When Hogan took office in 2015, he inherited an $800 million general fund shortfall, which he fixed in part by cancelling pay increases for state employees and cutting 2 percent from state agencies across the board.

"Right now, things are pretty good, and when things are pretty good, there's not a need to make significant cuts," Juppe said.

Though many Republicans were pleased with the smooth process overall, their largest concern—mandated spending—still remains unresolved.

"It's a good compromise," Sen. Adelaide Eckardt, R-Caroline, Dorchester, Talbot and Wicomico, who sits on the Budget and Taxation Committee, said of the budget deal. "The issue now is going to be the package we're talking about on the floor today with the mandates."

CNS Correspondent Connor Glowacki contributed to this report.