What’s in the First Round of Proposed Budget Cuts

With state revenues declining due to business closures and huge numbers of Marylanders out of work, state policymakers will consider the first round of proposed cuts to state programs on Wednesday. The Board of Public Works will consider $120 million in cuts that would mean less state support for revitalizing neighborhoods, updating community college facilities, fixing the Metro system, and making school buildings safer.

While the list of programs facing potential cuts do reflect a somewhat measured approach – eliminating unspent funds from grant programs and reserve funds – they also reinforce aspects of Governor Hogan’s approach to budgeting that have been problematic throughout his tenure.

The bulk of the reallocated funding, $97 million, represents resources that the Maryland General Assembly identified as priorities for public investment and set aside for those purposes as part of the balanced budget they approved last year. Governor Hogan has historically refused to spend funds the legislature sets aside in this way, which is why they were marked as reserve funds available to be cut.

Some of the proposed cuts would also take away resources that support low-income communities and Marylanders of color, such as neighborhood revitalization in Baltimore and transit in Prince George’s and Montgomery counties.

The proposed cuts include:

• $35 million that was planned to support the Metro transit system that is a vital part of the transportation network in the D.C. region. Access to transit is a key factor for many business location decisions. Cutting state funds at a time when the system is making many needed safety upgrades and is facing a sharp decline in fare income due to the pandemic is shortsighted.
• $44.6 million for updating school facilities. This includes $37 million the legislature set aside while approving this year’s budget, which the governor has so far refused to spend. It also includes $7.6 million in unused school safety grants, which were established in the wake of high-profile mass shootings at schools in Maryland and other parts of the country. These cuts come as the average age of Maryland school buildings remains at a record high, with students of color disproportionately going to school in district with the oldest school buildings.
• $30 million from investments in housing and community development. This includes $5 million in unused funds plus $13 million set aside by the legislature from programs that support revitalization in low-income communities in Baltimore that have vacant buildings and other economic challenges due to decades of under-investment. It also includes $12 million set aside by the legislature for investment in affordable rental housing. While the governor’s proposal states this will not affect any projects already underway, the proposed cuts will take resources away from communities that truly need them—and at a time when half of all Maryland renters must pay unaffordable rent. In addition, supporting things like housing rehabilitation and new construction could help create or sustain jobs
• $3 million for facility improvements at community colleges. After the last recession, community colleges saw a significant increase in enrollment due to the need for job training and the fact that many students and families were facing financial challenges that made it harder to afford a four-year university degree program.
• $7 million designated for heritage structure rehabilitation tax credits.

The proposed cuts would take resources away from public investments that could ultimately create jobs and improve our communities. At the same time, they don’t affect projects already under way and avoid some of the greatest harms that can come from cutting back on public investments during a recession, like laying off state employees or cutting back on emergency food assistance or other income supports.

State and local budget cuts during the last recession harmed Maryland families and communities and slowed our economic recovery. We must not make the same mistake again. Congress should approve the additional state and local funding now under consideration to ensure that Maryland and other states can avoid damaging cuts. State policymakers should exhaust other options, such as using reserve funds and raising additional revenue before resorting to harmful cuts.