Maryland Needs a More Comprehensive Approach to Budget Updates

July 1, 2020 by MDCEP in Blog

Like every other state, Maryland is facing the twin challenges sharp declines in state and local revenue and greater demands on all manner of state services, whether that is schools adapting to digital learning or the huge increases in families in need of income supports.  However, rather than taking a comprehensive approach, Governor Larry Hogan is trying to use this crisis to push through hasty cuts to many of the same public services he has been trying to undermine for years.

On June 26, the governor proposed nearly $1.5 billion in cuts to the state budget, including cuts to public schools, colleges and universities, Medicaid, state and local health departments, local government assistance, cultural programs, transit services, state employee pay and benefits, and other public investments. Many of these actions would require legislative approval. While the state is facing unprecedented fiscal challenges, a cuts-only approach would repeat the mistakes of the Great Recession, harming Maryland families and communities while further slowing our economic recovery.

There are still many unknown factors. The state income tax filing deadline was extended to July 15, so it will still be several weeks before the state knows the full picture of state revenue for the fiscal year that just ended June 30. Congress is also still considering essential legislation that could provide additional fiscal relief to state and local governments, and Maryland’s senators asked Governor Hogan to give them more time to move this legislation forward before making cuts.

On July 1, the Board of Public Works – a three-member body including the governor, comptroller, and state treasurer that reviews contracts and can make some adjustments to the state budget – approved $413 million in cuts to the current budget. After a broad range of Marylanders, elected officials, and organizations objected to many of the $670 million in cuts the board was originally considering, some cuts to public education, local governments, and employee compensation were postponed.

The cuts will cost the state nearly $12 million in lost federal funding – meaning that the state’s net savings is $402 million – and will require staff and hours cutbacks equivalent to 92 positions.

Moving forward, Maryland policymakers should pursue a more comprehensive approach that looks at the budget as a whole – including eliminating special interest tax breaks and closing corporate loopholes – and balances both the emergency needs due to the pandemic and recession and maintaining long-term investments in Maryland’s future. And, congressional action on additional economic relief measures remains vital to avoiding more harmful cuts in Maryland and other states.

 

BPW Budget Cuts by Program Area

Higher Education $192 million
Public Safety $46 million
MSDE/K-12 Education $12 million
Health/Medicaid $52 million
Executive/Administrative $43 million
State Reserve Fund $38 million
Housing/Human Services $21 million
Natural Resources/Environment $10 million
Total BPW Budget Cuts – All Funds $413 million

 

Higher Education Highlights

  • $117.3 million cut across the University of Maryland system
  • $36.4 million in state aid to community colleges
  • $10.6 million in state aid to private higher education institutions
  • $9 million cut to Morgan State University
  • $3.2 million reduced for Baltimore City Community College
  • $2 million cut for St. Mary’s College.

Some of these cuts in state support will be at least partially offset by federal funds that were part of COVID-19 relief legislation.

Public Safety Highlights

It is more important now than ever to reduce the number of incarcerated Marylanders to prevent avoidable illness and death. However, hasty budget cuts that aren’t matched by releases and supportive services are likely to worsen conditions facing Marylanders in state custody.

  • $15.4 million is cut from the Department of Juvenile Services, which is 5.6 percent of the agency’s budget
  • $8.9 million is cut from the Department of Public Safety and Correctional Services
  • $5.0 million in reductions for Office of the Public Defender
  • $4.2 million cut from the Office of the Attorney General
  • Funding for the Governor’s Office of Crime Prevention, Youth and Victim Services goes down by $5.4 million, including significant cuts to crime prevention and intervention programs

Housing and Human Services Highlights

Most of the cuts to these areas of the budget reflect administrative reductions, which can make it harder to provide services effectively and even increase costs in the long run. There are cuts to programs as well, including:

  • $5 million in support for community development programs
  • $3 million in reductions to the rates paid to institutional foster care providers
  • Cuts to youth apprenticeship programs

Natural Resources and Agriculture Highlights

  • $10 million in combined reductions to the Departments of Natural Resources, Environment, and Agriculture
  • Reduced grant funding for the Chesapeake Bay Foundation