Archive for January, 2010

General Assembly Updates – January 22, 2010

Posted by admin on January 22, 2010  |   Comments Off on General Assembly Updates – January 22, 2010

Dear Friends,

On Wednesday, the 13th of January, the 427th session of the Maryland General Assembly convened. This is bound to be a vigorous 90 days, with important legislation addressing same-sex marriage, education funding, electricity re-regulation, foreclosure prevention, healthcare, and public safety to be considered. I will be giving you weekly updates on the work being done in the General Assembly and the Environmental Matters Committee that I chair, but despite the wide range of issues that we will ultimately discuss in these legislative updates, I want to spend this first dispatch talking about the issue that casts the largest shadow over this legislative session: the budget.

As we all know, the overall economic outlook of the nation has created dilemmas on the national, state, and local levels in regard to how we can maintain vital services while attempting to balance budgets. Here in Maryland, where balancing the budget is constitutionally required, this is especially important. And while Maryland has fared better than most other states in terms of weathering the recession, we have had the legacy of previous budget shortfalls to deal with. When Governor O’Malley came into office in 2007, Maryland’s budget had increased over the previous four years by 26%, consistently exceeding the spending guidelines recommended by the Spending Affordability Committee. As a result, Maryland faced a $1.7 billion structural deficit.

From that time until now (including the proposed Fiscal Year 2011 budget that was unveiled on Tuesday), the O’Malley-Brown administration has introduced budgets that come in under the Spending Affordability guidelines. Even more, the FY10 and proposed FY11 budgets come in with negative spending growth – a first for Maryland. FY11 General Fund spending will come in lower than FY07, the first time that there has been a four-year decrease in four decades. Total spending will also come in lower than last year, the first total spending decrease in 39 years. And as a result of the administration’s efforts to craft responsible budgets, Maryland is one of only 7 states to enjoy a AAA bond rating that is certified by all three bond rating agencies.

Acquiring and maintaining this reputation for fiscal responsibility requires careful planning, however, and difficult cuts. The Spending Affordability Committee estimated the FY11 budget gap between revenues and spending at about $2 billion. Approximately half of this is made up in the proposed budget by spending reductions, bringing the total reductions throughout the O’Malley-Brown administration’s tenure to $5.6 billion, with a total of 3,500 state positions cut as well. The remaining gap was filled by transfers (two of the largest being from cash made available by funding capital eligible costs with bonds, and from funds coming out of the Accounting Reserve to support K-12 education), additional Medicaid stimulus, and other revenue adjustments.

Just as importantly, the proposed budget maintains funding for core services:

  • FY11 education funding is increased by $189 million (bring the total increase from FY08-FY11 to $1.2 billion), giving our #1 ranked K-12 schools the resources they need by fully funding the Thornton formula and the Global Cost of Education Index.
  • In higher education, even though the tuition freeze will come to an end, the increase will be a modest 3%, in stark contrast to the 40% increase imposed over the four years prior to the O’Malley-Brown administration.
  • A strong $3.2 billion capital budget will continue to guarantee long-term investments in the state’s infrastructure and transportation, as well as providing for the creation of 20,000 construction jobs.
  • A record $20 million will be allocated for the Chesapeake Bay 2010 Trust Fund in order to protect the state’s largest and most important natural resource. This represents a doubling of the funding provided last year. Further, Program Open Space will be fully funded with $22.7 million for state, and $15.3 million for local projects.
  • Public safety programs will continue to receive funding in order to keep our families safe and crime in check. Local police aid will total $45.4 million, along with local law enforcement grants of $20.1 million.
  • $20 million will allow for the New Jobs Creation and Recovery Tax Credit, which will provide assistance to businesses hiring unemployed Marylanders.
  • $5.9 billion will go to the state’s Medicaid program. Along with the Maryland Children’s Health Program, this will give access to medical care for over 800,000 Marylanders.

It will be our challenge this session to make sure that we maintain these two goals of fiscal responsibility and continued core services. In the coming weeks I will give you both a preview of some of the bills being heard in the Environmental Matters Committee that I chair, and a look at some of the legislation that, though not in my committee, is important to me and about which you have written me to express concern or interest. Please continue to send me your thoughts, either by phone (410-841-3990), by mail (6 Bladen St. Annapolis, MD 21401), or by email (maggie.mcintosh@house.state.md.us).

Sincerely,

Maggie McIntosh