Maryland Republican Gov. Larry Hogan unveiled a $42.3 billion spending plan Wednesday, promising an array of small tax cuts and putting a large amount of money into savings, setting the stage for months of debate on what to do with the state's budget surplus.
The proposal would deliver $36 million in fee and tax reductions, partly by speeding up tax breaks already approved by the legislature and partly by creating new breaks for retirees and small businesses.
Tuition at public institutions would go up by 2 percent under the governor's budget proposal. Every mandate for funding K-12 education would get paid, giving every school district in the state more money per pupil than last year. State employees would get as much as 4 percent in raises, though a few workers would lose their jobs.
Budget Secretary David Brinkley said he was confident the state could find private sector jobs for that “handful” of workers, and described the budget as delivering on the governor's promises.
Taxpayers would see “more money in their pockets,” Brinkley said. The governor’s budget reflects Hogan’s belief that his policies are encouraging employers to expand, Brinkley said, which would eventually further put more money in state coffers.
“People in Maryland are having a newfound faith in Maryland, especially job creators,” he said.
Much of the state's budget is controlled by laws that mandate spending, leading one prominent senator to say most of Hogan's budget “is on autopilot.”
The spending plan, however, does not include any of the money Hogan promised to give to Baltimore to demolish buildings.
The $4.5 billion capital budget for construction projects does not include any cash for the city’s demolition project, which Hogan announced with fanfare would be part of a $700 million investment in the city.
Democrats, who dominate the legislature, said they left a 90-minute briefing with Hogan with more questions than answers on how the governor intended to implement his plans.
“We look forward to going through the budget and working through it in some details,” House Speaker Michael E. Busch said after leaving a meeting held over eggs and scrapple at the governor's mansion. Busch said it was difficult to render an opinion on Hogan's spending plan.
“We don't know until we get all the details,” Busch said.
Hogan’s budget secretary promised to put money for demolition in a separate, supplemental budget. The maneuver means that Hogan could use additional spending as a bargaining chip with lawmakers.
Senate President Thomas V. Mike Miller Jr. noted that the proposal left out money for Prince George’s Hospital Center, too.
“I guess what that means is it’s going to be supplemental budgets,” Miller told reporters Wednesday morning.
The operating budget leaves about $450 million unspent, even after the state stashes at least 5 percent of its money in a savings account.
Lawmakers on both sides of the aisle expect to debate whether to spend that money, hold on to it, or return some of it to taxpayers.
Baltimore Del. Maggie McIntosh, a Democrat who chairs the House Appropriations Committee, said she was disappointed Hogan did not include any of the money promised for Baltimore and that he said the supplemental budget would include just $18 million for demolition this year.
“That money was not in the budget,” she said. “The announcement was about $700 million. Where's the other money? Where's it coming from?”
Sen. Andrew A. Serafini, a Washington County Republican on the Budget and Taxation Committee, said the governor’s plan was “prudent” and “fulfills what the governor said he would do.”
“We would love him to go further on tax cuts,” Serafini said, but he believes residents will understand the governor’s more moderate approach. “They want government to stay within its means.”