Donald Fry: Differences over budget measures percolating in Annapolis

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By Donald C. Fry

Into the second full week of the Maryland General Assembly session, leading state lawmakers continue to pledge bipartisanship and cooperation with Governor Larry Hogan and with colleagues on both sides of the legislative aisle.

But budget and fiscal issues will clearly dominate this legislative session and political and philosophical differences, particularly relating to education funding and Hogan’s strategy to eliminate the structural deficit, are beginning to percolate to the surface.

“We want to make sure this administration gets off to a good start and that we are cooperating with each other,” Senate Minority Leader Catherine E. Pugh told more than 300 business leaders who attended the Greater Baltimore Committee’s annual legislative forum on January 26.

“I’m looking forward to working with the Republicans, the Democrats, the independent thinkers and those who are interested in moving Maryland forward,” Pugh added.

House Minority Whip Kathy Szeliga, a Republican who represents Harford County, said legislators seek “true bipartisanship.”

“Larry Hogan is bringing in a spirit of bipartisanship,” she said. “I’m happy to report to you that Annapolis is not like Washington. We get along very well. While we might disagree on some policy issues, we can disagree agreeably.”

In Annapolis, “it’s not about you,” said House Speaker Pro Tem Adrienne Jones, a Democrat from Baltimore County. “When you’re here, yes you represent your constituents in your district, but at the same time you’re representing the citizens of the State of Maryland.

The needs of residents in different parts of the state “may not be the same as yours, but you have to realize, those needs are important,” Jones said. “We are One Maryland and you have to look at that and get beyond the ‘Rs’ and the ‘Ds’ and govern in the best interests of the people of the state.”

Most contention that is emerging over Hogan’s budget centers around more than $700 million in proposed constrained spending that is the main element of the governor’s plan to eliminate the state’s structural deficit in one year and to keep state operational spending within available revenues going forward.

Some of the largest spending reductions would come in a few major budget categories, the most notable being a $200 million cut to Medicaid funding. Other reductions include a 2 percent across-the-board reduction to spending in every state agency, the elimination of raises for state employees, and a 50 percent reduction in a geographical formula that provides additional funding for K-12 education to districts where the cost of education is higher.

The budget for FY 2016 includes $6.1 billion in state funding for public schools – a slight overall increase from the current year, but cuts in state aid are proposed for 10 jurisdictions including Baltimore City, where state education aid is slated to be cut by 3.7 percent, according to the state Department of Budget and Management.  Education funding cutbacks are also budgeted for Calvert, Carroll, Cecil, Charles, Frederick, Garrett, Harford and Kent counties.

Fourteen jurisdictions budgeted for education funding increases include Talbot, Prince George’s, Wicomico, Baltimore, Caroline and Howard counties, all of which are budgeted for 2.5 percent overall increases or more. Yet lawmakers in many of these jurisdictions are complaining loudly about proposed cuts to key categories within these allocations.

Members of the Legislative Black Caucus sent a letter to the governor on January 29 voicing concerns that cuts to education funding disproportionately affect poorer jurisdictions harder, according to published reports.

Senator Pugh noted that the cuts to Baltimore City’s education budget puts the city in a fiscal bind. “We certainly can’t raise our property taxes any more to deal with some of the issues as they relate to education,” she said.

Delegate Jones, who chairs the House Appropriations subcommittee that reviews the education budget, told business leaders that lawmakers will closely review Hogan’s budget but that, under Maryland’s strong-governor system, options are limited as to what can do. They can “only cut or suggest some transfers,” she said.

A ray of hope for education advocates could come in the form of a supplemental budget with funding increases that Hogan could potentially submit later in the session if March revenue estimates are favorable.

Some in Annapolis are voicing concerns over Hogan’s action to close the structural deficit in one year – instead of more incremental two-year approach recommended by the General Assembly’s Spending Affordability Committee.

Delegate Szeliga defended Hogan’s approach, however. The definition of a structural deficit is “when your ongoing revenues do not meet your ongoing expenses. In a business you cannot operate like that,” she said. Maryland “has been running a structural deficit knowing full-well that they were spending more than they were taking in.”

Delegate Jones noted that dealing with deficits is nothing new for the General Assembly, which is required by law to have a balanced budget. “Every governor has had a structural deficit,” she said. “And every governor has balanced the budget.”

The FY2016 budget will be the most significant issue of the General Assembly. While legislators may cut spending and negotiate changes, they may not shift money from one priority to another. Over the years I have learned a couple of key points regarding governing:

  • * Budgets drive policy - policy doesn't drive budgets.
  • * A budget document - although not the most sensational or emotional issue presented to the legislature - is more than a set of numbers but serves as a reflection on the philosophical approach of a governor to governing.

As lawmakers debate their disagreements over fiscal issues this year on their way to a balanced budget, one thing is certain.  They must come together on a budget that meets the single overarching fiscal policy articulated by the Hogan administration: Maryland is not going to spend more than the revenue that it brings in.

As many lawmakers are fond of saying, under the State House Dome “the devil is in the details.”

Donald C. Fry is president and CEO of the Greater Baltimore Committee. He is a regular contributor to Center Maryland.

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Donald C. Fry has been the president and CEO of the Greater Baltimore Committee (GBC), the central Maryland region's most prominent organization of business and civic leaders, since November 2002.

Under Don’s leadership, the GBC is recognized as a knowledgeable and highly credible business voice in the Baltimore region, Annapolis and Washington, D.C. on policy issues and competitive challenges facing Maryland. Its mission is to apply private-sector leadership to strengthening the business climate and quality of life in the region and state.

Fry served as GBC executive vice president from 1999 to 2002. From 1980 to 1999 Fry was engaged in a private law practice in Harford County. During this time he also served in the Maryland General Assembly. He is one of only a handful of legislators to have served on each of the major budget committees of the General Assembly.

Serving in the Senate of Maryland from 1997 to 1998, Fry was a member of the Budget and Taxation Committee. As a member of the House of Delegates from 1991 to 1997 Fry served on the Ways and Means Committee and on the Appropriations Committee.

Fry is a 1979 graduate of the University of Baltimore School of Law. He earned a B.S. in political science from Frostburg State College.