Maryland House, Senate negotiators strike budget deal

House and Senate negotiators resolve differences, OK state budget bill.

General Assembly negotiators have agreed on the final details of the $42.3 billion state budget that includes extra aid for Baltimore's schools and no new taxes.

A conference committee approved a budget Monday that largely follows the outlines of the spending plan submitted by Gov. Larry Hogan in January. The agreement will go to the full Senate Tuesday, then to the House of Delegates later in the day. Both chambers, controlled by Democrats, are expected to approve — delivering the Republican governor what he sees as a political victory.

The budget provides enough money for public colleges and universities to hold tuition increases to no more than about 2 percent. Baltimore schools will receive an extra $12.7 million lump sum to offset a loss in state aid caused by declining enrollment and rising property values. And Baltimore will get an additional $18 million to demolish vacant houses, the first installment of a four-year program.

The budget leaves $400 million unspent as a surplus for next year, and it stashes another $1 billion in a rainy-day fund. It provides about $346 million to pay more to doctors who treat people on Medicaid. State police officers will receive automatic raises and other state employees will receive pay increases for good performance.

The agreement completes budget negotiations with two weeks to go in the General Assembly session — much earlier than in recent years.

Warren Deschenaux, the legislature's chief analyst, said it had been a "record-setting, quick conference."

The deal was struck after conferees agreed on how to pay for a proposed $5 million program that would encourage businesses to donate to private schools that serve low-income students in exchange for tax credits. The program would be run by the Maryland State Department of Education. It would be overseen by an advisory board appointed by the governor and legislative leaders. The negotiators also agreed to changes to the program under which the state provides textbooks for children attending private schools.

Del. Maggie McIntosh, the Baltimore Democrat who led the House negotiating team, said lawmakers found that the current program provides a disproportionate amount of benefits to schools serving relatively affluent students. The changes would redirect more of the funds to schools where 40 percent to 100 percent of students are considered low-income.

Despite the committee's swift agreement, some aspects of the budget are controversial.

Lawmakers cordoned off nearly $80 million that Hogan can spend only on priorities designated by the legislature.

Hogan promised before the 90-day session began in January that he would not yield to such tactics, and said last week he didn't like that lawmakers took the money out of the state's savings account.

The legislature put cash in the budget for several popular programs, including nearly $19 million to help local governments pay for teacher pensions, plus more money for drug treatment, lead paint remediation and demolishing the Baltimore City Detention Center.

There's also money restricted for arts programs — among the top interests of Hogan and first lady Yumi Hogan, an artist and adjunct professor at the Maryland Institute College of Art.

The budget plan also fences off $1.2 million to save the jobs of more than 50 workers at the Springfield Hospital Center, where some employees had been targeted for layoffs as a result of the Hogan administration's plan to privatize food service. There is another $900,000 to avert layoffs at two other facilities.

Saving those jobs has been a top priority of AFSCME, the largest state employees union and one of the most powerful interests aligned with assembly Democrats.

Like the other fenced-off funds, the governor is not required by law to spend the money and could let it sit unused. Last year, he agreed to spend some of the money the legislature set aside for pension payments, employee raises and some of the state's costliest school systems. But he also let some of the school system money go unspent.

While lawmakers have agreed on the operating budget, they have not agreed on whether to grant income tax cuts.

Last week, the Senate voted to cut the income tax rate by 2 percentage points for families earning more than $150,000, grant middle-income earners in a family of four a tax cut of about $64 a year, and expand a refundable tax credit for the state's poorest workers.

A House panel is scheduled to hold a hearing on the legislation Tuesday, but its members have drafted a different tax cut proposal.

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