Maryland Needs a Better Way to Determine How to Fund Vital Services
This week’s political sparring between the governor and the legislature over how important decisions are made about the state’s budget is the latest example of the urgent need for a new process that creates a greater incentive for the Governor and legislature to work together to deliver essential services for Marylanders.
The governor holds almost all of the power in Maryland’s annual budget process, something that is unique among the states. In most cases, the General Assembly can’t act on its own to add money to any area of the budget – even if lawmakers find savings in another part of the budget to offset the costs. This rule, part of the state’s constitution, limits collaboration between the General Assembly and the governor in setting the state’s priorities.
As a result, legislators have established funding formulas to ensure that the priorities most important to their constituents receive sufficient funding each year. These are what Gov. Larry Hogan and other officials refer to as “spending mandates.” Maryland must also comply with federal government requirements around spending on programs like Medicaid and housing assistance.
Funding formulas for essential services like education, housing, and health care also help local governments and other providers that are ultimately responsible for delivering services to Marylanders. They can plan better if they have a general idea of how much money they will get from the state annually, rather than having to wait for the governor to determine their level of support year to year.
Gov. Hogan has said he wants to reduce the use of funding formulas in the state budget and has proposed legislation that would shift more power to the governor’s office. The governor didn’t do his cause any favors by politicizing the issue at a press conference on Tuesday, claiming that legislators are only interested in reckless spending and tossing out a host of misleading figures to support his point. Tallying up the estimated costs for a selection of proposed legislation, without any regard to what the proposals are (hint: some of them are duplicates and shouldn’t be counted twice) and if the ideas are even gaining traction in the legislature, is a ridiculous way of evaluating policy ideas. The fact is, the governor has also introduced a slate of proposals that have a significant price tag.
It is true, as the governor points out, that having much of the state budget determined by funding formulas limits flexibility to address new needs as they come up. However, it is also the only way the legislature can exercise any control over public investments.
Reducing the role of funding formulas in Maryland’s budget process only makes sense if it is a part of more comprehensive reforms, such as amending the constitution to give the General Assembly a greater role in the budget process. Taking away the legislature’s already limited ability to address the state’s needs would concentrate too much power in the office of the governor and could lead to negative consequences for public services and the economy.
What really matters in these policy discussions is whether a given proposal will benefit Marylanders and the state’s economy. A system that required the governor and the legislature to negotiate budget proposals would best serve Marylanders.
