As Maryland lawmakers near budget vote, trepidation about future looms

The House's revision of Gov. Larry Hogan's budget restores some funding for Democrats' priorities.

As the House of Delegates nears an up-or-down vote on Gov. Larry Hogan's $43.5 billion spending plan Thursday, House budget chief Maggie McIntosh sees a lot of good news from her perspective — a revenue shortfall erased, critical programs preserved and a healthy reserve fund.

Del. McIntosh, the Baltimore Democrat who chairs the House Appropriations Committee, said legislators crafted a plan that seeks to avoid past wrangling with the Republican governor while giving him the fiscal wiggle room to contribute state money to help the Baltimore school system make up a $130 million shortfall.

"It's a good budget," McIntosh said. "From a fiscal perspective, it's very sound."

Looming, however, are Republican President Donald J. Trump's expected cutbacks to the federal workforce. McIntosh said she will be sweating the results of the state's September revenue estimate, when state fiscal leaders get a glimpse of the budget challenges they'll face in 2018.

But this year's spending plan has so far made its way through the Democratic-led General Assembly on schedule and with a low level of disagreement between the House and the Senate. The budget package cuts $270 million of the governor's proposed spending and restores $81 million for the legislature's priorities.

In a news conference Wednesday, Hogan criticized several of the trims made by the House — to the Maryland State Police, economic development programs, help for minority businesses and new technical schools he had proposed.

He had especially harsh words for a $5 million cut to a program known as BOOST that provides scholarships to low-income students attending private schools, calling the reduction "hypocritical and frankly disingenuous."

"They're now simply playing politics by attempting to cut this important funding, limiting opportunities to deserving kids," Hogan said.

When the House opened its budget debate Wednesday, uncertainty at the federal level was part of the conversation.

Republican Del. Christopher West warned during debate that the state was about to feel the full effect of its reliance on the federal government for its employment, and therefore objected to a $5 million cut to Hogan's proposed spending on luring companies to Maryland.

"Never has our private sector employment been more important. Never has it been more important that Maryland step to the plate to help companies who are considering moving to Maryland," said West, who represents Baltimore County. The House voted, 90-50, to not restore the funds.

Democrats turned away other Republican amendments to the budget package in similarly lopsided votes.

After a final vote Thursday, the House bill will go to the Senate next week for a week of consideration.

After that, it will go to a conference committee where the two chambers will work out the remaining differences. McIntosh and her Senate counterpart, Budget & Taxation Committee Chairman Edward J. Kasemeyer, say they've been consulting closely throughout the process and expect a smooth resolution.

"On all the major issues, we're pretty much in alignment," said Kasemeyer, who represents Howard and Baltimore counties.

McIntosh said the legislature has an advantage this year it didn't last year. A revenue shortfall required Hogan to submit a reconciliation bill — known in Annapolis as the BRFA, for Budget Reconciliation and Financing Act.

In the operating budget bill, the Assembly can only make cuts. It can't add money or move it around.

The BRFA is largely a bill in which the governor asks the legislature's permission to deviate from spending mandates lawmakers previously put in place. This year Hogan, who detests spending mandates, came in with a wish list of spending requirements he wanted to see repealed.

The House BRFA crafted under McIntosh's leadership makes liberal use of the Assembly's prerogative to say no. It preserves many of the spending mandates the legislature adopted last year to help Baltimore recover after the 2015 riots. It also turns down Hogan's request to cut a planned 3.5 percent compensation increase to providers of services to the developmentally disabled — a legislative initiative to retain such workers — to 2 percent.

In a victory for Hogan, the House's revised budget bill drops the tactic lawmakers employed last year of "fencing off" certain spending and only allowing it to be spent as a package deal. Last year, the Assembly took $80 million — a mix of its priorities and the governor's — and told him to take it all or leave it. Hogan left it, and lawmakers got the message that they can't make him spend those funds.

"He doesn't release them," McIntosh said. "You don't want to set up false hopes."

McIntosh and other lawmakers are pinning their hopes on $137 million in surplus funds left over in the House version of the budget — more than the roughly $66 million in the original plan. They hope Hogan will use that pot of money to match the money the city is putting up to help the school system avoid painful layoffs.

It's an approach that relies more on persuasion — and negotiation between Hogan and Mayor Catherine Pugh — than legislative muscle.

Hanging over the relatively harmonious progress in Annapolis is uncertainty over whether actions in Washington could blow a hole in the state budget while the ink is barely dry.

"I call it a 'hold-your-breath' budget," said Sen. Richard S. Madaleno Jr., vice chairman of the Budget & Taxation Committee. The Montgomery County Democrat warned that if the Trump administration plans lead to a grim revenue forecast in September, Hogan and lawmakers may need a special session to shore up state finances.

Baltimore Sun reporter Erin Cox contributed to this article.

mdresser@baltsun.com

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