General Assembly completes work on Hogan's $43.5 billion budget

The General Assembly gave final approval Tuesday to a $43.5 billion state budget that closes a $400 million revenue gap while holding the line on taxes and sending new funding to Baltimore and 10 other school systems.

The lawmakers' action came with time to spare — two weeks remain before the legislature will adjourn its annual 90-day session. The legislature's only constitutionally mandated annual duty is to pass a balanced budget.

The final spending plan crafted by a House-Senate conference committee neither increases not decreases taxes while limiting tuition increases at public colleges and universities to 2 percent. A private school voucher program that came under challenge in the House emerged mostly intact. Growth in general fund spending, over which the state has most control, will increase by 0.5 percent.

Sen. Edward J. Kasemeyer, chairman of the Senate Budget & Taxation Committee, called the budget "reasonable." The Howard County Democrat said the governor's office and legislative fiscal leaders worked well together.

"There was a decision to cooperate and build trust with each other," Kasemeyer said.

A spokeswoman said Gov. Larry Hogan looks forward to the conclusion of the budget process, passage of the capital budget expected this week.

The operating budget, which takes effect July 1, fully funds the state's education formulas with $6.4 billion in aid for public schools. Baltimore's school system will get an additional $23.7 million to help close its $130 million budget shortfall. Ten other districts will share an additional $4 million.

There are no new taxes or fees in the budget bill, and it goes more than 90 percent of the way toward closing the state's structural budget shortfall.

The final deal gives both the Republican governor and Democratic legislative leaders something to crow about. Hogan saw his budget priorities slide through almost unscathed. The majority Democrats were able to ensure full funding for some of their top priorities, including a 3.5 percent raise for the workers who take care of the developmentally disabled.

Meanwhile, Hogan can point to the extra $32.7 million he proposed for higher education to hold tuition increases to 2 percent — a proposal lawmakers left intact. He also managed to hold onto most of the money he proposed for a program called BOOST that awards scholarships to lower-income students to attend private schools. The final budget provides $5.5 million for that purpose.

The budget's smooth passage in 2017 contrasts with more contentious years. In 2012, final passage came with only hours to go. The failure of companion legislation prompted then-Gov. Martin O'Malley to call a special session for a do-over. Between 2007 and 2015, no budget passed with more than four days left in the legislature's session.

The final votes reflected the relative absence of rancor. The Senate passed the budget 47-0, while the House vote was 133-7. Its companion bill, in which Democratic leaders fended off Hogan's attempts to repeal many spending mandates, was met by more Republican protest votes. The Senate margin was 42-5; the House's 115-25.

The budget bill itself does not require the governor's signature, although a companion measure that ensures the spending plan is balanced does.

When lawmakers came to Annapolis in January, they were facing a roughly $400 million revenue shortfall — not deep enough to force catastrophic budget-chopping but too tight to allow a free-for-all over how to spend a surplus.

Del. Maggie McIntosh, who chairs the House Appropriations Committee, sent out a message to her Baltimore constituents Tuesday celebrating Hogan's inclusion of $23.7 million in new aid for city schools. She also noted the restoration of more than $10 million in aid to Baltimore the governor had proposed to cut. The money will go toward keeping the Enoch Pratt Free Library open longer and providing after-school and summer programs for students, among other uses.

"I'm proud of the efforts of legislative leaders and our city delegation to deliver for our city, and especially its youth, during a difficult budget year," McIntosh said.

There are no cost-of-living or merit raises for state employees — something McIntosh has called the biggest disappointment in the budget.

Senate Minority Whip Steve Hershey said Hogan had been successful with his budget.

"The governor campaigned on no fees and no new taxes and once again we get a budget that works with no new taxes," the Upper Shore Republican said. "Overall, when you look at it in its entirety, it's good for the state of Maryland."

The budget that emerged almost wiped our the state's long-term revenue shortfall — taking it down to $38 million. "That's a trivial problem to deal with," said Warren Deschenaux, the legislature's chief budget analyst.

The spending plan leaves almost $960 million in reserve. Most of it, $860 million, will rest in the state's Rainy Day Fund, where it protects Maryland's AAA bond rating.

While both sides are upbeat about the budget they passed, there remains a lingering trepidation over Maryland's long-term budget prospects given Republican President Donald Trump's efforts to scale back the federal work force.

"We don't know how well our economy's going to perform given the new administration in Washington," Deschenaux said.

mdresser@baltsun.com

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