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O'Malley Rolls Out $37.7B Budget Proposal

The governor touts $325 million in cuts even as proposed spending increases by 4 percent over the current levels.

UPDATED (6:32 p.m.)—Gov. Martin O'Malley Wednesday presented his budget plan for the coming year that he called "a jobs budget."

The budget contains no tax increases though O'Malley declined to discuss the possibility of a tax for transportation projects.

"These have been challenging times to say the least," O'Malley said. He was referencing the seventh budget of his tenure as governor at the same time that the state has weathered one of the most severe economic downturns in history.

O'Malley said Maryland taxpayers "expect their government to do more with less."

The proposed $37.3 billion spending plan is for the 2014 fiscal year, which begins July 1.

The governor's proposed budget contains $325 million in spending cuts even though the budget grows by 4 percent over the current year's nearly $35.8 billion spending.

About $50 million of what O'Malley called cuts come from the delay of a payment to the local government trust fund. Another $30 million comes from the use of special funds to pay for ongoing government operations rather than using general fund dollars.

A 'Jobs Budget'

O'Malley said his proposed capital budget contains funding that supports more than 43,000 jobs including those for schools renovation and construction, rental housing, bay restoration and transportation projects.

"If there is one thing this economic downturn has taught us is there is no recovery without a job," O'Malley said

Larry Hogan, chairman of Change Maryland, said in a statement that O'Malley's budget "does nothing more than continue the spend-and-tax governing that Martin O'Malley feels will further his political objectives.

"Missing is any understanding whatsoever on how to bring jobs and businesses back to Maryland," Hogan continued. "Over 6500 small business have left Maryland during his term and the number of Fortune 500 companies is down to just three - some of the worst declines in this region. Maryland's manufacturing sector has likewise been decimated."

No New Taxes But Gas Tax Lingers

Funding for transportation projects remains a problem.

State aid to local governments for highway projects over the last five years has been cut by as much as 90 percent.

The backlog of projects has led to a discussion of possible increases in the sales or gas tax.

O'Malley said his budget does not contain any proposal for such a tax but the idea is under discussion with legislative leaders.

Overall, transportation funding to local governments proposed in O'Malley's budget increases by $22.5 million or 13.4 percent to a total of $190.1 million.

The lion's share of that, about $134.4 million of highway users funds. goes to Baltimore City. That figure represents about 71 percent of all highway user fund aid to local governments and 80 percent of all transportation funds sent to the 23 counties and Baltimore City.

Spending on transportation projects in the state's 157 incorporated cities and towns is projected to increase by $23 million.

“Cities and towns throughout Maryland have endured five years of almost no state funding for critical municipal transportation projects,” said Maryland Municipal League president and Greenbelt Mayor Judith F. “J” Davis, in an emailed statement. “The Governor’s inclusion today of $23 million in the budget is an important step in the right direction, moving us closer toward full restoration of our share of state highway user revenues to repair and maintain our roads.”

Where The Money Goes

About 83 percent of all state spending in the proposed budget goes to just three areas:

  • Education including K-12 and higher education spending accounts for 47 percent of all operation budget spending.
  • Healthcare-related spending is about 25 percent of the budget.
  • Public safety spending accounts for 11 percent of the budget.

Preparing for 'The Harakiri Congress'

The budget also includes increases in the state's so-called rainy day fund.

The proposed increase would take the fund to $921 million or 6 percent of the total proposed budget. State law requires the fund be maintained at a minimum of 5 percent of the budget.

The proposal also contains nearly $1.2 billion in cash reserves.

The governor called the rainy day fund increase and cash reserves "a safe guard against the harakiri congress down the street and what they might do to our economy because of ideology."

O'Malley and others are concerned that severe cuts to the federal budget in the next two months could result in the loss of thousands of jobs in Maryland.

Hogan said O'Malley is blaming Republicans in congress for wanting to tighten federal spending.

"Martin O'Malley also showed again today in the budget briefing slide show for reporters why he is the most partisan governor in America, lauding the president for wanting to raise the debt ceiling and blaming in advance the U.S. House of Representatives for any largess that may not come Maryland's way," Hogan said.

Chris W January 18, 2013 at 11:12 AM
Mike said "The clue that you shouldn't even try to present an argument, and instead should stick to insults and eye-rolling?" That's all you will get from these clowns like Frank, Steve, FIFA, etc. i wish you could cue background music when you clicked on a comment. I would assign circus music for Frank. The real joke is he thinks he mainstream. Then again he is on the Bethesda Patch. I'm sure that many far left folks there think they are mainstream.
1ke January 18, 2013 at 04:24 PM
You are really out of touch with America. More significantly, you are out of touch with the post-industrial Western world and out of touch with the emerging countries. You need to see that there is a homeostasis being worked out here. We have over-consumed and turned over-consumption into a habit. It cannot go on forever. Your dichotomy of "producers" and "takers" is a false dichotomy. The existence of one is a precondition of the other. Incidentally, smart as you are and sophisticated (viz. sophistry) as you are, we have one thing in common: we are both mere dots--pixels--in the big picture.
1ke January 18, 2013 at 05:45 PM
Again, Chris, posting here does not take all of anyone's time. It is a time-filler for really busy people who are wired into the 21st century and just trying to get through a post-industrial day. A lot of folks here do not understand it. Many of the postings you read and Youtube videos you could watch are just part of a larger truth-seeking repartee. Don't be so boringly literal. Dag!
Mike January 18, 2013 at 07:05 PM
1ke said: "Your dichotomy of "producers" and "takers" is a false dichotomy." How so? ALL financial transactions are either WILLING agreement by both parties or they are not, meaning, there is FORCE involved. The latter category is a TAKING, pure and simple. There is no false dichotomy there whatsoever. That said, where things are far muddier (part of the reason for the stubborness of the mess we have) is that plenty of people are real free-market producers, properly at the mercy of the market and their own performance, BUT whose customer base exists largely because of FORCIBLE TAKiNG from others. For instance, consider a lot of restaurants/builders/whatever who serve the greater DC area. They are restaurants/builders/etc like any others, except the demand for their services only exists because there is a large collection of government TAKERS in their area. A similar phenomenon exists in NYC, a hub of much sneakier taking based on debasement of the dollar. Most people understand the DC example but very few understand the NYC case, which is FAR better hidden. This is why DC and NYC barely slowed their growth (DC even more so) as the rest of the country suffers badly. It's not sustainable, of course, because eventually the parasitic forces become so large relative to the host that the host dies. Which is where we are heading. Soon, there must be a big swing, or much greater force will be required to sustain the taking a while longer.
Brian January 21, 2013 at 02:31 PM
"Hate gays and immigrants as much as you want," Hmmm. I don't see this in my statement above jag. Actually, I hate people like yourself. Smug, arrogant people like you who are oblivious to what the government's role should be. Smacking sense into your head , all be it futile, would bring to me a great "sense" of satisfaction. I've learned by now that intelligent debate among conservatives like myself and liberal morons like you is impossible. Eventually, the debate boils down to you calling me names and labeling me as a racist. Therefore, I've "cut to the chase" if you will, and brought my comments regarding you down to your level and even a step further by implying I would like to physically wollup you across the side of your head solely for my satisfaction. Does that mean I've won the debate on liberal terms? I think yes.

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