BUDGET
Update on bills reported on in previous issues of RSC:
HB 70 Budget Bill (Fiscal Year 2016) (RSC-1&2) passed the House 46-0 on Third Reader and crossed over to the Senate. The House version reduced the on-going structural gap between revenues and spending by about 74%, which is well above the 50% target recommended by the Spending Affordability Committee. The budget, as passed by the House, resulted in a general fund balance of over $50.0 million, and the Rainy Day Fund balance will continue at 5.0% of general fund revenues.
The House budget fully funds education according to the formulas put in place by the Bridge to Excellence, and restores the Geographic Cost of Education Index. It also restores the 2% pay increase for state employees, and increases Medicaid provider payments, funding for services for those with disabilities and restores family planning services for pregnant women. This was achieved by reducing payments to the pension system by about $63 million, which due to better than expected performance in the stock market, is on track to be fully funded seven years early even with this reduction in allocation. Another $140 million worth of reductions to the Governor’s proposal were made by reducing local aid, cutting Medicaid spending (partly by using other funds, partly by delaying certain payments, and partly by cuts). Also included in this $140 million, are cuts to higher education and funding for the judiciary.
The Senate took up the budget that was passed by the House and passed unanimously with only a few minor changes.
The chart below, prepared by the Department of Legislative Services, shows some of the differences between the Governor’s proposed budget and the budgets enacted by the House and Senate.
|
Administration Reductions Rejected or Modified by the House and Senate |
|||
|
|
Admin |
House |
B&T |
|
Level Fund Education Per Pupil Foundation |
$66.0 |
$0.0 |
$0.0 |
|
Reduce VLT Impact Aid and Transfer to Education Trust Fund |
3.9 |
0.0 |
0.0 |
|
Phase-in State Support for Library for Blind and Handicapped |
1.9 |
0.0 |
0.0 |
|
Delay Establishment of Deaf Culture Digital Library |
0.2 |
0.0 |
0.0 |
|
Community College Formula |
13.0 |
9.0 |
9.0 |
|
Aid to Private Colleges and Universities |
6.5 |
5.1 |
5.1 |
|
Level Fund Local Health Grants to Fiscal 2014 |
7.8 |
3.9 |
3.9 |
|
Reduce Academic Health Center CRF Monies to Fund Medicaid |
7.2 |
3.6 |
0.0 |
|
Provider Rates for Developmental Disabilities Administration |
9.2 |
6.5 |
2.6 |
|
Level Fund Juvenile Services Provider Rates to Fiscal 2014 |
0.8 |
0.0 |
0.0 |
|
Park Service Payments in Lieu of Taxes in Fiscal 2016 |
2.5 |
2.3 |
0.0 |
|
Level Fund Maryland Arts Council to Fiscal 2014 |
1.4 |
0.0 |
0.0 |
|
Level Fund Disparity Grant to Fiscal 2014 |
2.1 |
0.0 |
2.1 |
|
Total Reductions |
$122.5 |
$30.5 |
$22.7 |
|
Proposed Restoration of Programs Not Funded by Governor |
|||
|
Fiscal 2015 2% General Salary Increase |
|
$68.7 |
$68.7 |
|
Geographic Cost of Education Index |
|
68.0 |
68.1 |
|
Physician Rates (Primary Care – House/B&T; Specialty – B&T) |
|
14.4 |
15.1 |
|
Psychiatrist Evaluation and Management Rates |
|
1.6 |
1.0 |
|
Community Mental Health Provider Rates |
|
6.5 |
6.5 |
|
Home and Community Based Care Provider Rates |
|
4.8 |
4.8 |
|
Medicaid Coverage for Pregnant Women and Family Planning |
|
4.8 |
4.8 |
|
Developmental Disabilities Purchase of Care Grants |
|
2.2 |
2.2 |
|
Developmental Disabilities Crisis Resolution Services |
|
0.0 |
3.0 |
|
Adult Day Care Center Grants |
|
2.1 |
2.1 |
|
Substance Abuse Treatment – Heroin Addiction |
|
2.0 |
2.0 |
|
Maryland School for the Blind Additional Program Support |
|
1.8 |
1.8 |
|
Nonpublic Special Education Placements Provider Rates |
|
1.7 |
1.7 |
|
Prince Georgeʼs County Hospital Center |
|
0.0 |
15.0 |
|
Nursing Home Rates |
|
0.0 |
5.7 |
|
Childrenʼs Medical Day Care Services |
|
0.0 |
0.1 |
|
Total Funding for Priorities Not Funded by Governor |
|
$178.6 |
$202.6 |
Shortly after the House and Senate finished their work on the budget, it seemed that the Governor was pleased and a good compromise had been reached. However, a report in the Saturday, March 28th Washington Post indicated that the Governor would not agree to the changes made by the legislature unless they enact some of the tax cuts that he wants. Because much of what the legislature recommended must be approved by the Governor, there is still a long way to go to have final budget bill.
SB 660 State Budget (RSC-4). The League submitted testimony in support. No action.
Nancy Soreng