State approves O'Malley's $84 million in budget cuts

The lackluster economy prompted Gov. Martin O'Malley to propose erasing $84 million in planned spending for next year.

Just a day after the new state budget took effect, O'Malley persuaded the Board of Public Works unanimously to approve a modest set of cuts to Maryland's $16.1 billion general fund.


About $10 million in cuts come from the state's higher-education institutions, although O'Malley aides said it would not affect tuition rates.

The cuts would not cause any layoffs but would trim 61 vacant jobs from the state's workforce of about 80,000 people, aides said. More than half of those jobs will come from higher education, including 36 vacant posts in the University of Maryland system.


Even though the official estimate of how far revenue lags behind state spending will not be ready until September, the administration chose to begin budget cuts now — before agencies started spending this year's cash. Together, the cuts represent less than half a percent of the state's general fund.

O'Malley said that the cuts "build upon a tradition, a culture of fiscal responsibility." He pointed out the belt-tightening was much smaller than cuts the state took during the recession.

Comptroller Peter A. Franchot voted for the cuts, but said that state leaders need to drop the "political spin" about the state's improving economy and "stop pretending that we made it through the thicket."

"Our citizens don't want to hear the spin anymore, and they're not falling for it," Franchot said.

A federal economic report released last week showed that the U.S. economy contracted more during the first quarter of 2014 than in any quarter during the previous five years. That followed another U.S. Department of Commerce report showing that Maryland's economy had stagnated in 2013.

The sluggish growth means state revenues have fallen lower than officials estimated earlier this year.

O'Malley defended the state's financial health by citing its AAA bond rating and comparing Maryland's relatively small budget shortfall to larger looming problems in other states on the Eastern seaboard, some of which have shortfalls in the hundreds of millions.

"We are coming through this recession faster than a lot of other states," O'Malley said. He added, "there's a lot that is going right, and of course, still, a lot of work to do. In that spirit, I agree with the comptroller that we should have an honest conversation."


In January, O'Malley proposed a $39 billion state budget that increased spending by 4.9 percent and took effect Tuesday, the final state spending plan of his eight years in office.

T. Eloise Foster, O'Malley's budget secretary, said Wednesday's cuts are designed to resolve the shortfall for the entire year. "My plan is not having to do this again," she said.

While O'Malley's staff declined to offer a list of all the $84 million in specific cuts, they said they include $56 million to various government agencies, with some asked to eliminate vacant jobs, forgo software upgrades or pare back other expenses.

In addition to the $10 million cut from higher education, another $10 million will be shaved from the state budget by spending federal cash already in state coffers. And budget experts said they expect $7 million of anticipated expenses to not materialize.

The cuts would not affect the struggling Maryland Health Benefit Exchange insurance website or a series of new economic development programs to expand cybersecurity and biotechnology sectors in Maryland.

All cuts must be approved by at least two members on the state's three-person Board of Public Works, on which O'Malley, Franchot and State Treasurer Nancy K. Kopp sit.


The cuts pale in comparison to the big spending reductions the board approved during the recession. In 2010, O'Malley went to the board three times for a total of $614 million in spending cuts from the general fund. In 2009, he asked for a total of $429 million in cuts over three requests. And in 2008, O'Malley requested a single $213 million spending cut.

Maryland Policy & Politics

Maryland Policy & Politics


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O'Malley's proposals

Gov. Martin O'Malley plans to release a full list of proposed cuts Wednesday morning. Here are some highlights already made public:

•No layoffs for state workers


•$84 million in total spending cuts

•$56 million of those cuts to come from government agencies

•$10 million from higher education

•61 vacant jobs will be cut from the state's workforce of about 80,000