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House panel finds money for education, state employee pay raise

House lawmakers crafted a plan Friday to reverse many of Gov. Larry Hogan's budget cuts and restore spending in areas they thought he shortchanged — education, Medicaid and a pay raise for state employees.

The $40.7 billion budget approved unanimously by the House Appropriations Committee gives K-12 schools almost all the cash local officials had expected, restores a 2 percent pay raise for state employees and pays health care providers more for treating Medicaid patients.

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But the plan does not leave much room for Hogan's long-term goal of cutting taxes.

The Republican governor released a statement saying that while he has concerns about some of the committee actions, "I believe we are headed in the right direction overall." After the committee vote, Budget Secretary David R. Brinkley walked over to the committee's chairwoman, Del. Maggie McIntosh, and said, "Good job."

McIntosh, a Baltimore Democrat, said committee members were bipartisan in their approach toward redirecting spending.

"We worked to achieve many of the goals that the governor intended in his budget," she said. "The legislature took its own stance on this budget and our priorities."

The delegates spent less than three hours trimming hundreds of millions of dollars from Hogan's proposal and directing the money to other programs. Lobbyists and advocates, stuffed into an steamy and packed committee room, flipped through page after page of recommendations, trying to keep up as legislators carved up Hogan's spending plan and went about rebuilding it.

The panel's spending cuts came from a wide variety of programs. The single largest reduction, of $75 million, came from making a smaller payment into the state employees' pension fund than originally planned.

That action, recommended by legislative analysts, was opposed by Hogan. Several Republicans on the committee objected to the change, arguing that the state required workers to pay more into the pension system in a 2011 reform bill that also called for supplemental payments into the fund each year.

"We promised to pay more," said Del. Tony McConkey of Anne Arundel County.

But McIntosh said the proposal had been thoroughly vetted by the Assembly's pension experts.

"If we don't use this $75 million, the end result is that state employees lose pay or lose jobs," she said.

Critics of Hogan's budget plan — Democratic political leaders, education and health care advocates and a union representing state workers —praised the committee's work.

"We cannot allow the governor to balance his budget at the expense of our children's future," Baltimore Mayor Stephanie Rawlings-Blake said in a statement. "I am so pleased that members of the House of Delegates agree with that philosophy."

AFSCME, Maryland's largest state employee union, said the House plan "stops Governor Hogan's pay take-away."

The committee vote on the budget was unanimous for the first time since 2003, McIntosh said.

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The budget proposal will be debated on the House floor next week, but the committee's spending decisions are rarely reversed. After the House votes, the measure will go to the Senate, where further revision is possible.

McIntosh said that where Hogan had proposed to eliminate in one year the state's recurring shortfall, or "structural deficit," the committee decided to cut it by at least 74 percent. The panel also said no to Hogan's proposal to lower state spending formulas in future years — a change that would have made it easier to pay for a tax cut.

Hogan had proposed long-term changes to formulas that pay for community colleges, private colleges and annual increases to K-12 education. The decision to reject those changes means Hogan is required by law to put more money into the budget for them.

The committee budget represents a significant victory for Baltimore.

Hogan's original budget called for a $36 million cut in education aid to the city school system. McIntosh said that by reversing some of the governor's cuts and tapping other sources, the committee's plan would give the city a $4 million increase — enough to keep up with its expected enrollment increase.

As the governor has repeatedly noted, his proposed spending of $6.1 billion on local K-12 education aid is a record. However, the increase he budgeted fell short of what school systems need to keep pace with inflation and enrollment increases. Consequently, per-pupil aid would have dropped by almost $80 statewide and more than $550 in Baltimore.

A big part of the restored education aid comes from the committee's decision to fully fund the Geographical Cost of Education Index which gives an extra portion of state education aid to localities where it costs more to educate children. In all, the committee voted to call on Hogan to put back $130 million of the $143 million in education aid cuts he had called for.

Brinkley said he considered the committee's choices "laudable goals" but added that the governor still had a key priority that hasn't been addressed: "Taxpayers are still looking for some tax relief."

Hogan is not required to agree with about $179 million worth of spending ideas pushed by the committee, but he also can't use the cash for anything else.

"He doesn't have to go along with it," McIntosh said. "If he doesn't, he'll just be sitting on that money. He can't use it for tax relief."

McIntosh said one action that doesn't need the governor's approval is the committee's decision to finance the state employee pay raise next year. Workers received a 2 percent cost-of-living bump Jan. 1, but Hogan had proposed rolling it back after July 1.

One of the areas where the committee wants Hogan to spend more is health care.

McIntosh said there was bipartisan concern in her committee about cuts that would have reduced the pay to Medicaid doctors and mental health workers and scaled back a program that gives free medical care to poor pregnant women.

Advocates for such programs, who had rallied in Annapolis for increased funding, cheered Friday's budget moves.

"We cannot stress enough the importance that these Marylanders have access to the services they need when they need them," said Dan Martin of the Mental Health Association of Maryland.

The committee also suggested Hogan put $2 million of what they cut into a pool of cash to pay for substance abuse treatment to help fight the state's heroin epidemic, which has spread from cities into rural areas of the state.

"There was nothing in the governor's budget to address this," said Del. Craig A. Zucker, a Montgomery County Democrat.

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Highlights of House budget plan

•Restores 2 percent pay raise for state employees. Cost: $69 million

•Restores $130 million of the $140 million Hogan cut from education aid.

•Continues expanded program of Medicaid coverage for pregnant women. Cost: $5 million

•Adds new treatment funding for heroin addicts. Cost: $2 million

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