GBC Report - 2010 Session

Democrat and GOP leaders offer contrasting views on budget

1-18-10 -- In the General Assembly’s opening days, top legislative leaders offered contrasting opinions on budget issues.  In addition to federal stimulus funding, the plan to balance the FY2011 budget could include the following elements mentioned by House Speaker Michael Busch and Senate President Mike Miller during several event appearances last week:

• Continue existing budget cuts. Seek to continue the $700 million in cuts to the current fiscal year’s budget;
• Cut Medicaid reimbursements. Reduce reimbursements to Medicaid providers. Medicaid accounts for 35-40 percent of the deficit, but Maryland cannot cut Medicaid programs because stimulus funding will not allow such cuts;
• Use the capital budget for General Fund items. Transfer some special fund money to the General Fund, and use bonds to pay for the budget items that would have been funded by the special funds;
• Continue to impose employee furloughs.
• Create jobs through capital expenditures. Pass an “aggressive” capital budget to create jobs through construction projects;
• Consider using the Rainy Day Fund.  Tap into some of the fund’s $650 million.

 “I believe that the structure we have for our revenues, once the normal economy returns, will help us fund the priorities I believe that every Marylander wants,” said Busch.  Miller predicted an additional round of federal stimulus funding.

During a panel discussion between Democrat and Republican legislative leaders at the Maryland Economic Developers Association’s winter conference in Annapolis on January 14, Senate Minority Leader Allan Kittleman commented that he “didn’t hear much about economic development” from either Miller or Busch.

“The reason I didn’t hear much is because for the last three years we haven’t done much,” Kittleman said. “We have had three years of piling on employers, not helping employers.”  He said that the General Assembly has imposed more regulations and taxes on business while cutting $35 million from the DBED’s annual budget during the last three years.

House Minority Leader Anthony O’Donnell criticized leadership for using billions in one-time federal stimulus funding to prolong a structural deficit that must be addressed.  “I believe that is very, very unwise for the long-term health of this state,” O’Donnell said. “What it does is it forces us into the next budget cycle without having made the systemic reductions and reforms that we need to make.  We will never get there if we keep taking these handouts to cover up our real problems.”

--GBC--