Hogan proposes $68 million cut to this year's Maryland budget

Republican Gov. Larry Hogan will push for about $68 million in budget cuts next week, a move to rein in spending approved by the General Assembly earlier this year.

Although there is no sign Maryland will have less money than anticipated this year, Budget Secretary David R. Brinkley said Thursday that the administration is "trying to get ahead of the curve" on a revenue shortfall projected for next year.


The proposed cuts to the $43.5 billion annual budget include reducing aid to some local governments, to colleges and to the juvenile justice system, as well as cutting 30 vacant higher education jobs. Brinkley said agency reductions range from as little as 0.1 percent up to 2.5 percent.

The largest percentage cut is a 3.6 percent reduction in a form of local aid known as disparity grants, which go to the state's less-wealthy jurisdictions. Hogan is proposing to cut $6 million from that $166 million appropriation. That will result in a nearly $1 million reduction in state aid for Baltimore, while Prince George's County will lose $4 million.


Aid for K-12 schools is not affected by the proposed cuts. However, a scheduled increase in aid to the state's private colleges under the Sellinger Program would be reduced from $4 million to $2 million.

The reductions will be considered at the Sept. 6 meeting of the Board of Public Works, a three-member panel comprising Hogan, Comptroller Peter Franchot and Treasurer Nancy Kopp.

The legislature's chief budget analyst, Warren Deschenaux, said there's nothing unusual about a governor proposing spending cuts to the board between legislative sessions.

"When it's obvious things are going south, that's justification," Deschenaux said. "To me, it's not a big deal."

Del. Maggie McIntosh, who chairs the House Appropriations Committee, was not as nonchalant. The Baltimore Democrat said there was no compelling reason to make the cuts before the legislature reconvenes next year.

"Unless there is a severe shortfall we are experiencing in this fiscal year, all of these changes could be made in January," she said.

Making cuts through the normal budget process would allow more public input, she said.

McIntosh said she was troubled by the cuts to the disparity grants. She noted that the legislature directed local governments to use this year's disparity grants on education.


Deschenaux said that money should already have been included in local school systems' budgets. He said it is unclear whether affected jurisdictions could reclaim those funds from the school systems or would have to absorb the cuts.

Sen. Edward J. Kasemeyer, chairman of the Budget and Taxation Committee, said he regrets some of the cuts Hogan is proposing — particularly to the Sellinger formula — but overall has no quarrel with the governor's plan.

"All in all, it's probably cuts around the fringes ... and nothing that goes to the heart of any programs," the Howard County Democrat said.

Sen. Andrew Serafini said Hogan's cuts are prudent given that spending is growing faster than revenue.

"Most of these are just making government more efficient," the Western Maryland Republican said.

Sen. Richard S. Madaleno Jr., who is running for the Democratic nomination for governor, said much of the $22 million reduction Hogan is proposing in Health Department spending is the result of Maryland's full implementation of the Affordable Care Act.


"Once again, Larry Hogan gets to benefit from the leadership of Barack Obama and Martin O'Malley," the Montgomery County Democrat said. "You never see that in his press releases."

Since taking office, Hogan has unsuccessfully tried to persuade the Democratic-dominated legislature to permanently reduce spending on a wide variety of programs.

Many state laws require spending at a certain level, which often adds up to more money than the state takes in during a given year. But since the Maryland Constitution requires a balanced budget, lawmakers generally resolve that shortfall on a year-by-year basis.

The situation limits how much control Hogan has over state spending. According to the administration, state laws mandate how he spends 82 cents out of every budget dollar.

The spending mandates — which cover such programs as K-12 education, medical assistance and services for the developmentally disabled — also are set to grow faster than the state's economy, setting up a potential shortfall of $742 million for the budget year that begins July 2018.

Brinkley said it's the administration's duty to manage the state's finances midyear, and the proposed cuts now would offset future deficits.


"This is simply unsustainable," Brinkley said. "We're trying to get ahead of something that we know is coming."

He added, "The governor has tried, and he will keep pounding away on the message that these mandates are driving the problem."

Under Maryland's Constitution, the legislature can cut but cannot add to the governor's budget or transfer money between programs. Lawmakers can require him to propose minimum amounts of spending on programs in future years.

The legislature's majority Democrats contend that those mandates give lawmakers the leverage to ensure that their constituents' priority programs are fully funded.

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"They want a strong public school system. They want a strong police force. They want adequate public health services," McIntosh said.

She said the governor can seek relief from mandates any year when revenues fall short of expectations.


Deschenaux said the state is expected to close its books for the fiscal year that ended June 30 with roughly $200 million on hand. He said the next revenue estimate, which sets the stage for the next year's budget decisions, is due Sept. 20.