A nearly $71 billion state budget took a key step forward Friday as the Senate Budget and Taxation Committee finalized its version in preparation for a vote before the full Senate next week.
Gov. Wes Moore (D) delivered a $70.8 billion overall budget in January. The spending plan closed a surprise $1.5 billion structural gap with a series of one-time fund transfers including nearly $300 million diverted from the Strategic Energy Investment Fund. The plan also contains some cuts and swapping cash for bonds.
The plan crafted by the Senate Budget and Taxation Committee moves money around but leaves the budget at roughly the same spending level as Moore’s proposal.
“So bottom line is, it’s balanced,” said Senate Budget and Taxation Committee Chair Guy Guzzone (D-Howard). “It’s consistent with a lot of what the governor did, but the changes that we made, I think, are important. The programs that we were able to save were important.”
The Senate plan leaves $2.2 billion — about 8% of general fund revenue — in the rainy day fund. It also leaves $250 million in cash surplus.
“We made a number of cuts, but most of them were pretty small. At the end of the day, as I said, the budget as presented to us initially, was pretty good,” Guzzone said. “What I will say, though, is that because of some of the actions we were able to take through the process, we were able to leave a bigger fund balance for what I would consider a surplus.”
Moore’s budget proposed a $150 million cut to the Developmental Disabilities Administration, the second consecutive year funding for the agency was laid on the chopping block. Moore and others expressed concerns about out-of-control spending growth at the DDA and called for cost containments.
Changes by the Senate lessened but did not eliminate some painful decisions.
“This was the least bad of all the choices,” Guzzone said.
Even so, Guzzone expressed some regret over the decisions.
“It was tough because you never want to be in a position where you’re pulling back some resources in that [DDA] community at all,” Guzzone said. “But with the enormous growth that has occurred over the last several years, and I mean enormous growth in the hundreds of millions of dollars, and because of some very unusual things, it was sort of all the wrong criteria came together to make it difficult to maintain services at the level and ensure that they were being done in an efficient way.”
The committee restored more than $23 million initially cut by Moore. It left in place, however, more than $126 million in cuts.
“I think you could tell how hard this was for them, because they have all clearly cared about developmental disabilities every year,” said Laura Howell, CEO of the Maryland Association of Community Services. “I think that’s true, that it is the least bad, as compared to what was originally proposed by the governor. But having said that, this is absolutely painful, very painful. But again … we were the largest add back into the budget, which shows you how much they still prioritize trying to do something for developmental disabilities during such a bleak budget time.”
Across the board, services in the Developmental Disabilities Administration will see a 2% reduction in funding. That reduction will lower rates for residential services from 87% to 85%. More expensive individual services will take an additional 2% reduction.
Ande Kolp, executive director of The Arc Maryland, said the cut is bad but could have been worse.
“I can’t believe I’m saying this — it’s a relief when we’re taking it … but it’s like the one thing that would have definitely probably resulted in people going back in institutional care,” Kolp said.
Guzzone told reporters Friday afternoon that the plan was crafted in consultation with the House.
The budget committee also adopted the funding mechanisms needed to support a sweeping energy package in the House. Lawmakers said the plan will lower skyrocketing utility bills, limit future rate increases and restore competition.
That plan repurposes money from the Strategic Energy Investment Fund (SEIF) — a pot of money set aside for green energy efforts — for paying down monthly EmPOWER program surcharges.
Ferguson said households could see bills lower by minimum of $150 a year — about $13 per month. Actual energy use and income eligibility could potentially increase that savings.
The Senate plan also added in $20 million for child care subsidies. The House moved a package of bills that week that targets waiting lists for the popular scholarship program.
The plan also calls for restricting money from local governments and some state agencies.
It withholds $124 million in state aid to local law enforcement until each local department can certify that they’re not working with Immigration and Customs Enforcement or immigration efforts, Guzzone said.
Money will also be withheld from some state agencies that had poor audits in the last year. The committee also recommended the withholding of money from the Department of Budget and Management “to ensure that agencies with certain repeat audit findings collaborate with the state chief information security officer to resolve and report on those findings.”
The Department of the Environment, State Highway Administration, and Department of General Services were among those that received stinging fiscal audits. The Department of Human Resources received a particularly scathing report that include multiple examples of repeat findings dating back years.
The Senate plan also made a number of cuts including $10 million from the state judiciary. The committee also saved $3 million in Medicaid expenses by shifting some renal patients into Medicare.
The committee also cut $2 million from a bio tax credit program and another $4.1 million from the information technology budget.
The bill is expected to go to the full Senate next week. From there, it heads to the House. But the two chambers are already in agreement on a number of the thornier issues.
The current pace would allow the legislature to return the budget to Moore early enough that they could override vetoes — if any — that Moore might issue on the spending plan.