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Carroll delegates explain budget dissent

Though the House of Delegates voted overwhelmingly to pass Republican Gov. Larry Hogan's proposed $40 billion budget, the 10 who voted against it were all Republicans — including three Carroll County legislators.

Delegates Susan Krebs, R-District 5, Kathy Afzali, R-District 4, and Warren Miller, R-District 9A, all said their decision to vote against the budget was not an easy one, and all pointed to a lack of promised funding for state pensions as a primary reason for their votes. But proponents say the budget significantly addresses the state's structural deficit without raising taxes and restores state funding to schools, including as much as $2 million to Carroll County.

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Krebs said that while she believes Hogan's budget was the best of those submitted in the past nine years, the House's Appropriations Committee's decision to reallocate $75 million from contributions to state employee and teacher pensions to other areas was disappointing. She said the state had promised those contributions in 2011.

"Three of the last five years, we have not put in the agreed-upon amount," Krebs said. "This year, Hogan put in the right amount and the committee cut out half. As good as the budget is, we are so far behind on our pension payments."

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Krebs is hopeful that the state Senate will make the appropriate changes to restore this lost pension funding.

"Hopefully [the Senate] will get the message and meet our promise to fully fund the pension; otherwise the taxpayers in the future will have to pay for it," she said.

Del. Haven Shoemaker, R-District 5, said 40 out of the 50 Republicans in the House chose to support the amended budget because of its consistency with Hogan's original proposal.

"The increase in spending is the second-lowest level since 1964," Shoemaker said. "It contains no fee or tax increase, and it restores education funding for the folks in Carroll County."

Carroll County Public School Systems may receive as much as $2 million in additional state funding from the budget adjustments, he said.

Shoemaker also said that while half of Hogan's proposed $150 million increase for pensions was reallocated to aid school systems across the state, pension increases will still get $75 million, which is in addition to money already included for those pensions.

"This funds $75 million more than the minimum necessary and gets us to 80 percent funding by 2023," Shoemaker said.

The governor's intent when crafting the budget was to spend within expected revenue and to chip away at the structural deficit created under the previous administration, he said.

"Hogan originally wanted to spend $40 billion, and the budget still spends $40 billion, and it doesn't go beyond expected revenue," Shoemaker said. "We're never going to get a perfect budget, but the governor proposed to solve the structural deficit, and we are 75 percent of the way there."

Miller, representing Howard and Carroll counties, said his vote was in no way a criticism of Hogan or the specific allocations in the budget. It has everything to do with the amount of money the state is spending, he said.

When Miller first took office in 2003, the state's budget was about $22.5 billion, he said, and it has since grown to $40 billion in 12 years. The state's Department of Labor has reported that since 2008, Maryland has lost $1 billion from its taxable wage base, he said.

"It's hard to vote for this budget and then turn around and tell my constituents I'm looking out for their pocketbooks," Miller said. "I think as a state we are spending too much money."

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He said it is the state's overspending that made him vote against all of former Democratic Gov. Martin O'Malley's budgets and two of former Republican Gov. Robert Ehrlich's budgets.

Del. Barrie Ciliberti, R-District 4, a member of the Appropriations Committee, said this is the first budget in the past seven years that does not rely on an immediate tax increase or set up tax increases in the future.

Compared with last year's budget, in which spending grew 8 percent from 2013, this year's budget includes a 1.3 percent increase, Ciliberti said.

Additionally, while Hogan's original budget would've completely eliminated the state's structural deficit in a single year, the adjusted budget rids the state of 75 percent.

"That's pretty damn good," Ciliberti said. "Everyone talks about how half a loaf is better than none; well this is three quarters of a loaf."

While Ciliberti also disagrees with the Appropriations Committee's decision to remove $75 million from the pension fund, he said he wasn't "going to torpedo the budget" because of it.

"The truth is the Republicans didn't have the votes to vote it down," he said.

Kicking the can on pensions

Afzali, who represents parts of both Frederick and Carroll counties, said she struggled in her decision to vote against the budget.

"I wanted to support it in the worst way," she said.

Afzali said while she is pleased school funding will be increased as a result of the Appropriation Committee's budget adjustments, she also "couldn't come to terms with" the lack of pension funding. By not funding pensions during the past few years as the state had agreed to in 2011, it will cost the taxpayers about $1 billion in the next seven to 10 years, she said.

"[The General Assembly makes] promises and then we break them, and I don't like that; [Krebs, Miller and I] had to vote our conscious," Afzali said. "Sadly, the leadership in the legislature deals more with the immediate and less in the future, and we owe it to the entire state to not only think about the present day."

In 2008, state legislators devised an approach to solve the lack of sufficient pension funding in a three-tiered manner that went into effect in 2011: Contributions to state employees' pensions increased from 5 percent to 7 percent; a portion of the pension obligation was allocated to the counties; and the General Assembly agreed to fund $300 million a year, Ciliberti said.

So far, everyone has lived up to this agreement except the state, he said.

"There's $475 million the state should've put in that we didn't," Ciliberti said.

The state's goal is to get to 80 percent pension funding by 2023, and currently the state is at 67 percent, according Ciliberti.

"How are we going to do that?" he said. "We are $475 million short."

The state also has about $20 billion in unfunded pension liability, Ciliberti said.

The state's failure to properly fund pensions for state employees and teachers will lead to unnecessary headaches for legislators in the future, Miller said.

"Somewhere down the road, a legislator is going to have to find a large amount of money," Miller said. "We should be setting aside the money now."

Onto the Senate

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Shortly after the House voted on the budget Thursday afternoon, the Senate's Budget and Taxation Committee passed the budget with a few minor changes, but nothing significant that will affect pensions, said Sen. Justin Ready, R-District 5.

Ready said the Senate could vote on the budget as early as the end of next week or perhaps the beginning of April.

He also said the Senate will have a chance on Monday to review the specifics of the budget, and he would not be able to determine whether he will vote for or against the budget until that happens.

If the Senate passes the budget with amendments, the House will have to take another vote on whether to accept those changes.

Reach staff writer Wiley Hayes at 410-857-3315 or wiley.hayes@carrollcountytimes.com.

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