In his "State of the State" address Wednesday, Gov. Larry Hogan said he has improved Maryland's financial picture. Here's how what the governor said stacks up against the facts.
TAXES AND FEES
What Hogan said: "Marylanders are demanding relief from years of crippling tax and fee hikes. We are already delivering $600 million back into the pockets of Maryland's taxpayers."
Analysis: The governor's office got to the $600 million figure by counting $270 million from toll reductions, $51 million in reductions of various fees, $3 million in tax relief for veterans that passed last year, $42 million annually in reductions to the unemployment insurance tax and up to $240 million in refunds to some taxpayers as a result of a court decision.
Not all of these reductions are of Hogan's doing. For example, the court case was brought by a Howard County couple who alleged they were unfairly double-taxed on income earned outside the state. After the couple was successful, county governments must now pay refunds to thousands of taxpayers.
And the unemployment tax rate is reset by law each year based on how much money is in the state trust fund to pay unemployment claims.
As for the savings on tolls, the $270 million estimate actually represents five years of lowered tolls. Drivers will pay $54 million less per year under the toll reductions that were approved last year.
What Hogan said: "We have seen a jump in tax revenues, not because we raised taxes, but because we are growing our economy. Revenues are now $150 million higher, and we have already eliminated nearly 90 percent of the $5.1 billion structural deficit that we were faced with at this time last year."
Analysis: Hogan's assertion about eliminating most of the structural deficit exaggerates an undeniable improvement in the state's fiscal picture. Warren Deschenaux, the General Assembly's chief analyst, said the $5.1 billion figure comes from a dismal 2014 estimate that showed what the deficits would total over five years if nothing was done. Because the budget has to be balanced each year, such projections are more theoretical than real, Deschenaux noted.
Also, while the long-term shortfalls have been helped by the spending cuts enacted since Hogan took office, the deficit has also been helped by budget trims that Gov. Martin O'Malley proposed before leaving office. But the biggest contributions toward reducing the long-term deficit are the additional revenue coming into the state and a decrease in costs, primarily in Medicaid
MONEY FOR ENVIRONMENT
What Hogan said: "This year, we are investing $53 million for the Chesapeake and Atlantic Coastal Bays Trust Fund — the highest level of funding ever, since it was established. This marks the first time in state history that funding dedicated specifically for restoration of the Chesapeake Bay is not being diverted to the General Fund."
Analysis: Hogan is indeed putting $53 million into the fund and pays for environmental restoration projects — a part of his budget that was cheered by the Chesapeake Bay Foundation. The foundation's Alison Prost noted that "shifting some of these funds to other purposes has become an Annapolis tradition," though she said environmentalists will watch closely to make sure next year's money is spent on worthy projects. The fund was created in 2007 and was envisioned to be at least a $50-million-per-year fund.
What Hogan said: "In Maryland, we have the unfortunate distinction of being the most gerrymandered state in the entire nation."
Analysis: There's no doubt that Maryland's congressional districts make little sense to most Marylanders. They've been challenged multiple times, and one federal judge memorably compared the 3rd Congressional District to a "broken-winged pterodactyl." An analysis from Azavea, a geographic data firm, rated Maryland as the worst state when it comes to having districts that are not compact — and it's only gotten worse over the years. Hogan is promoting a plan that would have an independent commission of three Democrats, three Republicans and three members who are not from either of those parties redraw district lines.
What Hogan said: "On education, we increased spending to historic, record-high levels, adding a total increased investment of $830 million more in K-12 education. Last year, I became the first Maryland governor ever to add any money into GCEI in his first year ... I have become the first governor in Maryland history to ever fully fund GCEI in his second year."
Analysis: "GCEI" is government lingo for the Geographic Cost of Education Index, which was created in 2002 to direct extra money to places where it's more expensive to educate children. While Hogan's claim to be the first governor to fund the index in his first year is true, he leaves out the fact that he only put in 50 percent of the money.
Republican Gov. Robert L. Ehrlich Jr. was the first governor to deal with the index and he declined to fund the index in his first budget. Democratic Gov. Martin O'Malley also did not fund the index in his first year. O'Malley didn’t fully fund the index until later. And Hogan's claim that he was the first governor to fully fund the index in his second year is also true, although he did not mention that he was compelled to do so after lawmakers passed a bill last year.