Hogan gives little ground on spending, renews call for tax cuts

Gov. Larry Hogan submitted a supplement to next year's state budget Thursday that spurns most of the General Assembly's priorities for restored spending and reiterates his call for tax cuts lawmakers have already turned down.

The $45 million supplemental budget sets the stage for what could be tough negotiations between Hogan and lawmakers over budget priorities during the last week and a half of this year's legislative session.


"There's nothing to address the legislature's priorities. It does address some of his priorities," said Warren Deschenaux, the legislature's chief budget analyst. Deschenaux said the supplemental will be taken up in a House-Senate budget conference committee.

Budget Secretary David R. Brinkley said the administration was simply accounting for proposed tax cuts that weren't included in Hogan's initial budget proposal.

"Tax relief, we're looking for tax relief," Brinkley said.

Hogan's budget allocates $5.2 million for tax exemptions for military pensions and first responders' retirement pay. A Senate committee last week turned down Hogan's call for an income tax exemption for retired first responders and severely cut back his proposal to end taxation on military pensions.

The governor also includes $7.4 million in the budget to account for passage of a bill exempting small businesses from the personal property tax as of July 1. The Senate committee has deferred that tax break.

Deschenaux said that item might have been an "oops" because even the governor's original bill contemplated starting that tax break in 2017.

As he announced last week, Hogan proposed more than $8 million in new spending to allow the Maryland State Police to hire 100 additional troopers and to reopen the long-closed Annapolis barracks, but he put no money toward restoration of cuts to local education aid or reimbursements of Medicaid providers. Neither is there money to reverse the cancellation of a 2 percent raise given to state employees in January.

The House and Senate had identified those as areas in which it wanted the governor to restore spending after making additional cuts to his budget plan.

Hogan did accept one legislative suggestion as he allocated $2 million to expand treatment services for heroin addicts. However, he also included $5 million for grants to businesses that make contributions to non-public schools schools.

Del. Maggie McIntosh, chair of the House Appropriations Committee, said she was disappointed Hogan hadn't included the education funding increases and restoration of state workers' pay raises in his supplemental budget. But, she said, "That doesn't mean it's over."

"It'd have been nice," she said, to see the education and worker pay funds in the latest supplemental.  "He indicated . . . he's going to work with us. We've still got a few days."

McIntosh, a Baltimore Democrat, said it's possible Hogan is waiting for lawmakers to work out their own differences over education funding, with the House budget including $178 million additional and the Senate version $206 million.  The budget conferees are still meeting on that.

She said Hogan could still approve more funding for education and state worker pay – even after the legislature's final dayu April 13 -- by releasing a budget amendment to that effect.  Legislative spending committees would have 45 days to approve any budget amendments, but McIntosh said they would quickly approve any amendment with those funds in it.

McIntosh said the House and Senate had "pinched off" funding for schools and pay raises, meaning the money legislators identified to pay for those purposes cannot be used for anything else.


Legislative analysts recommended that lawmakers delete the additional money to expand the state police.