Committee approves 4% Maryland budget hike for next year

The General Assembly’s Spending Affordability Committee recommended Wednesday that next year’s state budget be allowed to grow by 4% and Maryland’s debt limit be allowed to increase $75 million to $1.16 billion next year.

The recommendations, which are not binding on the governor but are often followed, were approved by the joint committee of legislative and fiscal leaders on straight party-line votes. Republicans backed no increase in spending and no hike in the debt limit.

Sen. Richard Madaleno, a Montgomery County Democrat on the Budget & Taxation Committee, led the charge for higher spending, while Senate Minority Leader David Brinkley, a Frederick County Republican also on the budget committee, advocated for fiscal restraint.

Prudent, conservative

Four percent growth “is a prudent, conservative recommendation,” and lower than the amount of growth seen for the most of the 25 years before the 2008 recession began, said Madaleno.

Sen. Richard Madaleno

“I think 4% is excessive, looking at the numbers,” said Sen. Joseph Getty, R-Carroll, who recently joined the budget committee.

Maryland’s overall budget this year, fiscal 2014, is about $37 billion; 4% growth would bring that to $38.5 billion.

A motion by Brinkley for no increase in the budget failed 17-5, as did a later motion to allow 1.9% growth in the budget, half of what Madaleno’s motion permitted.

Increase in bond funding, debt service

Madaleno also made a motion to add $75 million to the bond funding authority, as the O’Malley administration has requested, but not add another $300 million in debt in the following four years, as the administration had also sought. The motion passed 17-5.

The legislative staff had recommended no increase in debt at last month’s meeting of the spending affordability committee. The staff said this is one way to reduce debt service — payments of principal and interest on the state’s bonds — that will grow by 24% in those five years. It would be the largest increase in any budget category.

“We added $150 million last year,” pointed out Del. Addie Eckardt, R-Talbot, an Appropriations Committee Member.

“We want to protect the future governor from the additional burden of debt service,” said Getty. Gov. Martin O’Malley has a two-term limit, and a new governor will be elected next year.

Warren Deschenaux, the legislature’s fiscal chief, produced a chart showing structural deficits of over $300 million in the next two years.

–Len Lazarick

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