UPDATED (6:32 p.m.)—Gov. Martin O'Malley Wednesday presented his budget plan for the coming year that he called "a jobs budget."
The budget contains no tax increases though O'Malley declined to discuss the possibility of a tax for transportation projects.
"These have been challenging times to say the least," O'Malley said. He was referencing the seventh budget of his tenure as governor at the same time that the state has weathered one of the most severe economic downturns in history.
O'Malley said Maryland taxpayers "expect their government to do more with less."
The proposed $37.3 billion spending plan is for the 2014 fiscal year, which begins July 1.
The governor's proposed budget contains $325 million in spending cuts even though the budget grows by 4 percent over the current year's nearly $35.8 billion spending.
About $50 million of what O'Malley called cuts come from the delay of a payment to the local government trust fund. Another $30 million comes from the use of special funds to pay for ongoing government operations rather than using general fund dollars.
A 'Jobs Budget'
O'Malley said his proposed capital budget contains funding that supports more than 43,000 jobs including those for schools renovation and construction, rental housing, bay restoration and transportation projects.
"If there is one thing this economic downturn has taught us is there is no recovery without a job," O'Malley said
Larry Hogan, chairman of Change Maryland, said in a statement that O'Malley's budget "does nothing more than continue the spend-and-tax governing that Martin O'Malley feels will further his political objectives.
"Missing is any understanding whatsoever on how to bring jobs and businesses back to Maryland," Hogan continued. "Over 6500 small business have left Maryland during his term and the number of Fortune 500 companies is down to just three - some of the worst declines in this region. Maryland's manufacturing sector has likewise been decimated."
No New Taxes But Gas Tax Lingers
Funding for transportation projects remains a problem.
State aid to local governments for highway projects over the last five years has been cut by as much as 90 percent.
The backlog of projects has led to a discussion of possible increases in the sales or gas tax.
O'Malley said his budget does not contain any proposal for such a tax but the idea is under discussion with legislative leaders.
Overall, transportation funding to local governments proposed in O'Malley's budget increases by $22.5 million or 13.4 percent to a total of $190.1 million.
The lion's share of that, about $134.4 million of highway users funds. goes to Baltimore City. That figure represents about 71 percent of all highway user fund aid to local governments and 80 percent of all transportation funds sent to the 23 counties and Baltimore City.
Spending on transportation projects in the state's 157 incorporated cities and towns is projected to increase by $23 million.
“Cities and towns throughout Maryland have endured five years of almost no state funding for critical municipal transportation projects,” said Maryland Municipal League president and Greenbelt Mayor Judith F. “J” Davis, in an emailed statement. “The Governor’s inclusion today of $23 million in the budget is an important step in the right direction, moving us closer toward full restoration of our share of state highway user revenues to repair and maintain our roads.”
Where The Money Goes
About 83 percent of all state spending in the proposed budget goes to just three areas:
- Education including K-12 and higher education spending accounts for 47 percent of all operation budget spending.
- Healthcare-related spending is about 25 percent of the budget.
- Public safety spending accounts for 11 percent of the budget.
Preparing for 'The Harakiri Congress'
The budget also includes increases in the state's so-called rainy day fund.
The proposed increase would take the fund to $921 million or 6 percent of the total proposed budget. State law requires the fund be maintained at a minimum of 5 percent of the budget.
The proposal also contains nearly $1.2 billion in cash reserves.
The governor called the rainy day fund increase and cash reserves "a safe guard against the harakiri congress down the street and what they might do to our economy because of ideology."
O'Malley and others are concerned that severe cuts to the federal budget in the next two months could result in the loss of thousands of jobs in Maryland.
Hogan said O'Malley is blaming Republicans in congress for wanting to tighten federal spending.
"Martin O'Malley also showed again today in the budget briefing slide show for reporters why he is the most partisan governor in America, lauding the president for wanting to raise the debt ceiling and blaming in advance the U.S. House of Representatives for any largess that may not come Maryland's way," Hogan said.