Hogan budget would cut aid to Baltimore, freeze state worker pay, downsize prison, delay hospital

Erin Cox
Contact ReporterThe Baltimore Sun
Hogan's 'too good to be true' budget downsizes a prison, cuts aid to Baltimore.

Faced with a half-billion-dollar budget gap, Gov. Larry Hogan is proposing to roll back several programs enacted to help Baltimore recover from the riots of 2015 and to freeze pay for state workers.

The Republican governor would also downsize a major state prison in Hagerstown, delay money for a long-desired hospital in Prince George's County and reduce extra payments into the state's pension system.

New details in Hogan's $43.5 billion spending plan emerged Wednesday, a day after he said the proposal "sounds too good to be true, but it is true." He said it avoided "serious cuts."

Democrats questioned whether Hogan's choices spread the burden of closing the budget gap fairly.

"It is too good to be true," said Del. Maggie McIntosh, the Baltimore Democrat who chairs the House Appropriations Committee. That panel will begin scrutinizing the proposal next week.

The Hogan administration blames the $544 million deficit on lackluster wage growth, larger tax refunds for corporations than expected, and unpredictable capital gains income for the wealthy.

To balance the budget, Hogan proposes eliminating 400 open positions in the Department of Public Safety and Correctional Services as the agency shrinks the size of the Maryland Correctional Institute, the 85-year-old medium-security facility in Hagerstown. State officials say the inmate population there is declining.

Lawmakers from Baltimore bristled at the loss of $32 million in new programs to extend hours at branches of the Enoch Pratt Free Library, bolster neighborhood association construction projects, help retain city teachers, attract new development and send underprivileged students to college.

Lawmakers created the programs last year to help the city in the aftermath of the riots that followed the death of Freddie Gray.

The 25-year-old Baltimore man died in April 2015 after suffering a severe spinal cord injury in police custody. On the day he was buried, the city erupted in riots, arson and looting.

A spokesman for Hogan said the governor eliminated funding for new spending mandates, which included measures enacted last year. He said the legislature was welcome to find another way to pay for existing state services.

"The governor had a budget reality he had to face: you can't spend money you don't have," spokesman Doug Mayer said.

Hogan proposed more funding for several economic development initiatives he has championed.

The economic investment fund known by its acronym, MEDAAF, would receive a record $24 million, $10.2 million more than last year. The Enterprise Zone Tax Credit would get $22.4 million, a 13.7 percent boost. And Hogan designated $20 million for the corporate-retention package negotiated with hotelier Marriott International.

Hogan also proposed borrowing $25.6 million to pay for one of his own initiatives: accelerating the demolition of Baltimore's vacant housing.

"Baltimore wasn't singled out," Mayer said. "The governor supports those efforts. However, we've repeatedly warned about increasing spending mandates. The governor was faced with budget realities and had to make hard decisions."

Another of those decisions rankled Senate President Thomas V. Mike Miller.

The Southern Maryland Democrat has been pushing the state for years to help pay for a new regional hospital in Prince George's County.

It seemed last year that a deal was at hand. But Hogan's budget proposal would delay construction and delete $22 million expected in the next fiscal year.

"We had an agreement," Miller told reporters Wednesday. "The governor is reneging on his pledge to Prince George's hospital.

"He can say, 'The budget is doing real well. I've done this miracle.' The miracle is that he takes money from Prince George's hospital."

Budget Secretary David Brinkley said the state is keeping its pledge, but the money has been spread out to match a new construction timeline.

A different element of Hogan's budget-cutting plan irked another powerful Senate Democrat. Sen. Thomas "Mac" Middleton chairs the Finance Committee, which will consider Hogan's paid sick leave proposal.

In 2014, Middleton held up passage of then-Gov. Martin O'Malley's minimum wage increase until lawmakers agreed to aggressively increase pay for caregivers to the developmentally disabled, a cause Middleton has championed for decades.

Hogan's budget curbs an anticipated pay raise for those workers. Middleton convened a press conference to say that would exacerbate understaffing among caregivers who help some of the state's most vulnerable people.

Baltimore lawmakers said the city's financially strapped schools would again lose funding under a state formula that reduces state aid when enrollment dips and a jurisdiction's wealth increases.

City schools would see $42 million less than they are receiving in the current fiscal year, a blow when they're struggling with a $129 million budget gap.

Hogan and lawmakers have agreed in past years to give the city extra money to make up for some of the money lost.

Schools CEO Sonja B. Santelises said it will be several days before her administration can calculate the impacts of such a loss. She called on the members of the school community Wednesday to be "strong advocates for adequate funding,"

"Our students have some of the greatest needs in the state, and they deserve nothing less than the fully funded education that will keep them on the path to success," she said in a statement.

Mayer, Hogan's spokesman, said Baltimore schools already receive the second-highest amount of aid per student in the state.

Officials with the largest union of state employees said the pay freeze "adds insult to injury" to employees already frustrated by a payroll software snafu.

Lawmakers are scheduled to begin hearings into that problem next week. The Hogan administration says union officials have overstated it for political gain.

"The governor is being consistent with this budget because he has never seen fit to have a priority on state employees in his budget," said Sue Esty, legislative director for AFSCME Council 3.

Esty said the Division of Correction — as well as some other agencies — is already perilously short-handed and can't afford to lose the 400 vacant positions Hogan's budget would eliminate.

The broader public safety and corrections department currently has 1,000 vacancies, Hogan officials said.

Eric Shirk, spokesman for the Department of Budget and Management, said downsizing the Hagerstown prison allows for efficiency and for the administration to improve staff levels at several other facilities.

Sgt. Kyle Shanholtz, a correctional officer at the Maryland Correctional Institute, said officers are forced to work overtime because 13 percent of positions there are vacant. Often, he said, correctional officers are held over at the end of their eight-hour shift, which he said is dangerous.

"When you have people who are in there 14, 15, 16 hours, they're obviously not going to be at 100 percent," said Shanholtz, who is secretary of his AFSCME local.

Add to that the paycheck problems and the lack of pay increases, he said, and morale is "below rock bottom."

"It's a hard time to be a Maryland correctional officer," he said.

Baltimore Sun reporters Pamela Wood and Erica L. Green contributed to this article.

ecox@baltsun.com

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Hogan's budget

Gov. Larry Hogan has proposed a $43.5 billion spending plan to close a $544 million budget gap.

•$127 million would be saved by freezing state employee pay

•$42 million in state aid to Baltimore schools would be cut

•$32 million in new programs for Baltimore would not be funded

•400 open positions in the Department of Public Safety and Correctional Services would be eliminated

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