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Maryland Gov. Hogan proposes cutting state spending by $1.45B, cites economic downturn from coronavirus pandemic

Maryland Gov. Larry Hogan, shown speaking during a State House news conference earlier this month, is proposing $1.45 billion in budget cuts.
Maryland Gov. Larry Hogan, shown speaking during a State House news conference earlier this month, is proposing $1.45 billion in budget cuts. (Pamela Wood/Baltimore Sun)

Maryland Gov. Larry Hogan proposed $1.45 billion in budget cuts across state government Friday, including eliminating employee raises, cutting vacant positions and slashing funding for programs ranging from school security to prosecuting violent crime in Baltimore.

Hogan proposed the changes in advance of a meeting Wednesday of the state Board of Public Works, which has the authority to cut the budget. A total of $672 million of the cuts are scheduled for a vote at the meeting, with action on the remaining proposals possible in the future.

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The need to reduce spending by $1.45 billion was based on “a conservative estimate of our expected revenue losses,” said Nick Pepersack, deputy chief of staff and spokesman for the Department of Budget and Management. State officials didn’t offer details of how the target was reached.

Hogan’s chief spokesman noted that state governments across the nation face dire financial situations. Stay-at-home orders and other restrictions to control the spread of the coronavirus led to lower-than-expected collections of both income and sales taxes, forcing governments to rework their budgets.

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Hogan, the chair of the National Governors Association, and other governors are lobbying Congress to pass a bill that would send billions of financial aid to help states plug their budget holes.

“Sadly, more than 1.5 million government jobs have been lost across the country since March,” said Mike Ricci, the Hogan spokesman, in a statement Friday. “To solve our budget shortfall in Maryland could require reducing up to 25% of our state workforce.”

Layoffs were not part of the Republican governor’s proposed spending reductions Friday, however, and Ricci said he hoped unions for state employees will work with state officials to avoid them.

But the proposals included several actions that would impact state workers, according to the Department of Budget and Management.

Officers at state law enforcement agencies, such as the Maryland State Police, would not receive a 5% raise for which they previously negotiated. It was supposed to start Wednesday, the first day of the state’s new fiscal year.

Other state employees who agreed to a 2% raise starting next January wouldn’t see that extra money.

Hogan also wants to abolish 92 state jobs that aren’t filled, require employees to pay more for health care, and make it more difficult to qualify for overtime pay.

The potential impacts on state employees are not as severe as those that Hogan’s staff suggested to unions earlier this month as ideas to balance the budget. That proposal included eliminating state workers’ planned raises but also suggested laying off an unspecified number of employees and a 5% pay cut.

The Board of Public Works is comprised of the governor, comptroller and treasurer. For the last few months, Republican Lt. Gov Boyd Rutherford has sat in for Hogan while the governor focuses on the coronavirus pandemic.

Treasurer Nancy Kopp and Comptroller Peter Franchot, both Democrats, said Friday they were reviewing the proposals.

Franchot’s spokeswoman, Susan O’Brien, said the comptroller “will act to ensure that any efforts to reconcile Maryland’s budget challenges do not come at the expense of Maryland’s economy.”

State budget Secretary David Brinkley briefed state lawmakers for two hours Friday afternoon on the proposals.

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Del. Maggie McIntosh, a Baltimore Democrat who chairs the House of Delegates Appropriations Committee, came away relieved the proposed reductions weren’t worse. Considering the state’s financial situation, she felt that state employees got “a fairly good treatment.”

“The sky did not fall,” she said. “There were not furloughs, layoffs, massive cuts in salary.”

McIntosh said she’s hopeful the state won’t have to make more cuts. More will be known after a July 15 deadline for filing state income taxes and after the next round of financial forecasts are made in September. The next Board of Public Works meeting after Wednesday is scheduled for July 22.

The union that represent the largest number of state workers, the American Federation of State, County and Municipal Employees Maryland Council 3, called on the board to postpone voting on the proposal at least until the late July meeting.

While state budget officials met with some employee unions before the cuts were proposed, there was no meeting with AFSCME, according to union President Patrick Moran.

Moran said the state could dip into its Rainy Day Fund and make other maneuvers to avoid such a hit to state workers and state services.

“The reality is they did not act, in our opinion, in good faith,” Moran said. “They didn’t take every step they needed in order to make sure that this was the best step forward.”

The Hogan administration, Moran said, is using a “sledgehammer instead of a scalpel” to cut spending.

The state’s teachers union is not on board, either. The Maryland State Education Association’s staff tallied up what it said were $110.8 million of immediate cuts to education programs.

That list includes state grants that go to poorer counties that are often used to help fund schools, smaller contributions toward teacher retirements, and cuts to the Healthy School Facilities Fund, which pays for projects like air conditioning and mold remediation in public schools.

“Educators have stepped up throughout this crisis to do all we can for our students, and the governor’s cuts are a slap in the face,” association President Cheryl Bost said in a statement.

Bost said teachers oppose the cuts “in the strongest possible terms” and urged the board to vote against them.

The governor is proposing to eliminate one of his signature programs, spending millions on hiring state prosecutors to handle violent crime cases in Baltimore City.

Hogan has sparred frequently with Baltimore State’s Attorney Marilyn Mosby, and ordered state Attorney General Brian Frosh to start prosecuting criminal cases in the city last fall. Frosh said he could only do that if he was given a bigger budget and more staff.

Hogan later held a news conference in downtown Baltimore to announce money in his budget for 25 lawyers and other staff for the attorney general’s office. Hogan proposed eliminating those positions Friday; his office declined to explain why.

Hogan also wants to sell two Maryland State Police aircraft — one of the agency’s medical evacuation helicopters and an airplane that isn’t being used.

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State Sen. Guy Guzzone, a Howard County Democrat who chairs the Senate Budget and Taxation Committee, said in a statement after he was briefed by the budget secretary that the state faces tough choices.

“What is clear today is that we are facing very difficult fiscal times ahead, and we need the federal government to pass legislation to help the states,” Guzzone said. “As they go through these recommendations, we hope that the Board of Public Works approaches these cuts with a scalpel, while protecting the most vulnerable among us.”

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