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Session goes to wire with budget issues, Hogan agenda in doubt

Legislative session coming down to the wire with no budget deal and Hogan agenda in doubt.

Gov. Larry Hogan's maiden legislative session moves toward its end Monday with scant signs of an agreement in the works on budget issues affecting Marylanders statewide.

The Republican governor and the Democratic leaders of the General Assembly remained far apart — not just on the issues but also in their accounts of negotiations that took place in his office Saturday morning.

"I think they're going pretty well," Hogan said of the discussions. "We made a proposal to them we think is fair, that accomplishes many of the things they're trying to get done and is a little more fiscally responsible."

But House Speaker Michael E. Busch and Senate President Thomas V. Mike Miller said there had been no progress. No further meetings were scheduled as of late Saturday, though Hogan said he was available to talk any time Sunday or Monday. The legislature is scheduled to end its 90-day session at midnight Monday.

Hogan is still trying to win passage of high-profile items on his legislative agenda — all logjammed behind a state budget waiting for final passage. The House and Senate have reached a deal on what they want in a budget package, but the governor is not on board, and the legislature needs his consent for spending it wants restored.

At stake for Marylanders is $68 million in education aid to 13 localities that are home to 80 percent of the state's public school children. Democrats also want to prevent a 2 percent pay cut for state employees and restore money for health care for pregnant women, the mentally ill, the developmentally disabled and others.

The governor, meanwhile, is holding out to deliver some of the tax relief he promised Marylanders during his successful 2014 campaign — as well as an agenda that includes greater flexibility for charter schools, a tax credit for gifts to public and private schools, and an end to the requirement that the state's largest jurisdictions collect stormwater fees he calls "the rain tax."

For Hogan, what unfolds Monday could say a lot about how his four-year term will play out — and whether he gets another one.

"Fighting with the General Assembly doesn't seem like a good idea," said Donald F. Norris, director of the School of Public Policy at the University of Maryland, Baltimore County. "It didn't work out well for Bob Ehrlich. I don't see how it could work out well for Larry Hogan."

Robert L. Ehrlich Jr. was Maryland's last Republican governor, and his contentious single term ended in a re-election loss.

But Hogan said in an interview that there's not much at stake for him if no deal is reached.

"Politically I think it's really bad for them if they can't come up with any kind of fiscally responsible budget," he said.

Richard Vatz, a professor of political communications at Towson University, predicted that Hogan and the Democratic leaders will strike an agreement at the last possible moment.

"This is how legislative-executive negotiations go," Vatz said. "Larry Hogan is a very savvy businessman. He knows how to bargain. He knows how to negotiate."

Hogan and legislative leaders gave far different accounts of their 25-minute meeting Saturday morning.

As the Senate finished its work for the day, Miller told members of his chamber that he was uncertain how the budget issues would play out.

"What happens to the budget, I'm not sure," he said.

Busch said the meeting with Hogan was "a review of the things that he'd like to see." The speaker said he warned Hogan that it was too late to make radical changes to the budget, likening the legislature to an aircraft carrier coming into port. "You just can't turn the thing around at a moment's notice," Busch said.

But Hogan aides said the governor made a substantive compromise offer that includes significant concessions. They said he dropped his demand for a halt to gas tax increases already in law and offered to split the difference on the education aid at the center of the standoff — providing $34 million instead of the $68 million legislative leaders are demanding.

The aides said the offer also included preventing the state employee pay cut and providing $25 million more for Medicaid than his original budget.

The staff members said Hogan was standing firm on some items the legislature was resisting. He was insisting on the full $150 million he has been demanding for a supplemental payment to the state pension fund, rather than a lesser sum agreed to by the House and Senate. And he was continuing to demand a tax credit for corporations that make contributions to schools — both public and private — over Busch's vehement opposition.

Several hours after the reported offer, a Senate committee answered Hogan's proposal on education aid by ratcheting up its pressure for full funding of the geographic cost index that benefits urban jurisdictions such as Baltimore and Montgomery County as well as outer suburbs such as Carroll County. The panel approved a highly confrontational bill that would require the governor to fully fund that index in future budgets — tying his hands as he tries to cut spending and offer tax relief.

Sen. Richard S. Madaleno Jr., the Montgomery County Democrat who is vice chairman of the committee, said the panel decided to act because Hogan "decided to punish the schoolchildren who live in jurisdictions that did not vote for him in the last election."

The presiding officers have a Senate-House budget agreement in hand, ready for certain approval. They held it open Saturday to give Hogan time to negotiate. Under the Maryland Constitution, they must pass a balanced budget by midnight Monday. The budget bill is the only one Hogan can't veto. But the legislature needs Hogan to restore the spending it wants; the General Assembly cannot.

If a budget deal is struck early enough, the Hogan bills making their way through the process can be approved with lightning speed Monday. If that doesn't happen, the governor could end his first session with little to show for it except a budget with cuts to popular programs.

Democrats would leave in place a budget deal that gives Hogan permission to spend money on education and health, while avoiding the pay cut. But Hogan said Saturday that he would not spend that money, which he could bank for future tax cuts.

"If he were to refuse, that would create a very serious political brouhaha," said Norris. "And I think it would poison relations between him and the General Assembly for the rest of his term."

Senate Minority Leader J.B. Jennings, a Baltimore County Republican, said he sees more political danger for the Democrats than for Republicans if a deal isn't struck.

"If it all implodes, it'll make it difficult to move forward the bipartisanship that we've had this session," he said. "They'll be labeled as obstructionists and they'll get the blame for the next nine months."

Vatz said he doubts it will come to that.

"If Hogan caves too early, it'll look as if people voted for him for nothing," Vatz said. "Both sides will say they gave their all and they fought."

Baltimore Sun reporter Pamela Wood contributed to this article.

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