April 13, 2012
What now, after an awkward sine die?
Governor Martin O’Malley on April 10 chided legislative leaders for allowing the “Doomsday” budget cuts to take effect, reducing state spending levels for public schools and higher education on the last day of the 2012 General Assembly session.
More than $500 million in cuts were enacted by lawmakers the night of April 9 after the House and the Senate could not agree on a package of revenue increases and levels of local contributions to teacher pensions required to balance the state’s operating budget.
The cuts to education are “really a damn shame,” O’Malley said as he, Senate President Mike Miller and House Speaker Michael Busch participated in bill signings the day after the session’s awkward finish. Enactment of the Doomsday budget is “pretty much the low point in my experience here,” the governor said.
"We proposed a budget to protect our shared priorities of public safety, quality ed and affordable college,” Governor O’Malley tweeted to constituents. “This does not,” he said, linking recipients to the page of the budget conference committee report that outlines cuts to education and to local governments.
In addition to the disappointment voiced by Governor O’Malley, the “day after” was punctuated with calls by the presiding officers that a special session is needed to correct fiscal problems with the budget that was passed. However, the timing of a special session, should one be called, remains in doubt.
What happened? “We both came up with our own plans,” Miller said in a Tuesday morning interview on WAMU. The budget ultimately proved to be “a complex package that didn’t happen,” Miller said.
He had the votes in the Senate for an 11th-hour budget plan that leaders from both houses had agreed upon, Miller said. “I had the votes in the Senate on each and every thing,” he said. But “in the House, they couldn’t get the votes.”
Hopefully, lawmakers can be called back to Annapolis and “give the governor an opportunity, along with the House members, to get their votes together,” Miller said.
Busch’s account differed. He complained to reporters that the Senate did not send needed tax legislation over to the House before midnight.
Busch said he agrees that the budget needs to be fixed, reported the Baltimore Sun’s Michael Dresser, “but you can’t until you have a plan.”
One lawmaker, Baltimore City Senator Bill Ferguson, expressed surprise that the Doomsday budget was enacted. “We were told it would never come about - the votes for the revenue package were counted, the Senate and House had agreed, the bills were prepared, we just needed to vote,” Ferguson emailed constituents.
“And by midnight at Sine Die last night, we were never given the opportunity to vote,” he wrote. “As a result, at midnight last night the ‘Doomsday’ budget - the unrealistic budget that would never come about - became Maryland's reality.”
As of the transmittal of this State House Update, the governor had not indicated whether or when he might call a special session.
The Doomsday cuts: what are they?
The so-called “Doomsday” budget makes $512.2 million in cuts to proposed state operating expenses, more than half of which comes from reductions in public school funding and other aid to local jurisdictions.
State agency operating funds are cut by $128.8 million, and health and human services absorb another $21.7 million in cuts. Another $25.4 million in cuts would come from eliminating stem cell research funding, and biotech and sustainable community tax credits.
Following is a more detailed summary of “Doomsday” budget cuts:
Convention Center expansion funding stays in capital budget
The capital budget passed by the General Assembly hours before they adjourned on April 9 includes $2.5 million in preliminary design funding for the expansion of the Baltimore Convention Center.
The budget item grants the funding to the Maryland Stadium Authority, but prohibits its use until a memorandum of understanding is executed between the state Department of Budget and Management, the City of Baltimore and the private developer of the proposed new arena and hotel that is to be connected to the expanded convention center.
The memo of understanding must be submitted to the General Assembly’s budget committees for review. The memo must include preliminary agreements between the parties regarding management and ownership structure of the combined project, preliminary financial commitments and cost-sharing expectations between the state and Baltimore City.
The combined project is a top priority of the Greater Baltimore Committee. This funding is a significant signal of support from the state for this project. The funding requirements provide a reasonable framework for next steps to proceed with the project.
What passed that impacts business?
Following are a few examples of bills passed by the General Assembly that would positively impact the state’s climate for business competitiveness:
What didn’t happen?
As I noted above, bioscience tax credits and sustainable communities tax credits, both proven highly-effective incentives that have produced significant business development over the years, were eliminated by the Doomsday budget.
Three other key legislative initiatives did not survive the General Assembly session:
More evaluation and commentary will follow in another post-session edition of the GBC State House Update soon as we continue to review session outcomes and watch for developments that will determine whether a special session will be convened.
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