General Assembly leaders predict ‘tough’ budget cuts
The Baltimore Sun
— Top state lawmakers predicted tough budget cuts Friday and said the Trump administration creates uncertainty about Maryland’s economic future.
Senate President Thomas V. Mike Miller and House Speaker Michael E. Busch promised that an expected budget gap of roughly $400 million would not be closed through new taxes or fees. But the Democrats warned local officials to prepare for unpopular spending cuts.
“We’re going to have to cut some programs,” Miller said, speaking at the Maryland Association of Counties conference here.
Both Miller and Busch said they fear more financial trouble if Republican President-elect Donald J. Trump follows through on campaign promises to repeal the Affordable Care Act and “drain the swamp” by reducing the federal workforce, which employs thousands of Maryland residents.
The General Assembly’s presiding officers did not suggest cuts to specific programs, saying they will wait to see Gov. Larry Hogan’s budget proposal first. The state budget allocates spending for education, public safety, health, transportation and numerous other needs.
They promised to protect spending on K-12 education as the Democratic-led legislature and Hogan, a Republican, devise ways to pare back the state’s more than $42 billion budget.
They also pledged Friday to open the legislative session that begins in January by attempting to overturn the governor’s veto of a renewable energy law. The law would require the state to obtain a greater share of its power from renewable sources. Hogan said it would cause an unacceptable increase in consumers’ utility bills.
The president and speaker commented on the budget a day after forecasters further reduced revenue estimates, saying more than $820 million in tax money expected over the next two years will not materialize.
In October, the legislature’s top analysts warned lawmakers it was time to “get real” about Maryland’s chronic budget problems, saying they can no longer be blamed on bad economic conditions.
For most of the past decade, lawmakers have seen projected spending outpace revenue, an imbalance caused primarily by the economic downturn but exacerbated by laws that mandate spending increases regardless of the money available. In recent years, revenue estimates have been off dramatically, in large part because state officials overestimated how much wealthy people would earn in capital gains.
Miller and Busch suggested long-term changes to help solve the problem, but stopped short of endorsing Hogan’s plan to dramatically and permanently cut back mandated spending.
Busch said governors have historically looked to save large amounts of money by spending less on public colleges and universities — which would increase tuition — reducing spending on prisons and trimming what the state pays doctors who treat the poor through Medicaid.
“It’s going to be a tough year,” Busch said, adding that if Hogan reduced spending on K-12 education, he would be the first governor in modern history to do so.
Hogan spokesman Doug Mayer said the governor would not reveal details of his spending plan until mid-January.
“The governor really believes that we need to take a hard, good look at how much the state is spending every single year,” Mayer said. “Once again, we’re in a situation with 3-plus percent growth in revenues and we’re in a budget hole.
“This is going to continue happening until we take a serious look at mandated spending.”
Lawmakers left Annapolis in April having approved a budget with a surplus and believing the state could afford roughly $300 million in tax cuts. Revised revenue estimates have changed that outlook.
Both Busch and Miller said the state’s financial troubles would worsen if the federal government sheds jobs under the Trump administration.
“The bad news is that we’re a company town,” Miller said, referring to the thousands of federal workers who live in Maryland. “We’re tied to the federal government. We’re dependent on those jobs.”
Keiffer Mitchell, a senior aide to the governor, said Hogan plans to announce a “robust” package of legislation during the 90-day General Assembly session that begins Jan. 11.
Mitchell said that in addition to a proposal announced Wednesday to require large companies to provide paid sick leave, the governor also plans to revive legislation to offer tax breaks to manufacturing companies that move to three areas of the state with high unemployment — Baltimore, the Eastern Shore and Western Maryland.
That bill died in committee last year over concerns that the generous tax benefits would put manufacturers already in Maryland at a disadvantage.
“We’ve worked out some of the kinks,” Mitchell said Friday.
The governor will once again seek to change how Maryland redraws congressional and legislative districts, Mitchell said, and to push legislation permanently reducing how much Maryland spends.