O’Malley budget seeks $37.3 billion, up 4.3 percent

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Budget Highlights 2014By Len Lazarick

Gov. Martin O’Malley on Wednesday proposed a total budget for fiscal 2014 of $37.3 billion, a $1.5 billion increase or 4.3% more than this year’s total spending, including money set aside as a surplus and rainy day fund.

None of these total spending figures – which includes federal aid, special funds, tuition payments and fees – can be found in the official press release about the budget nor in the PowerPoint presentation O’Malley used to brief reporters about the spending plan.

Instead, as he has done in previous years, O’Malley emphasized the spending in the “general fund” budget, which includes the bulk of state revenues, but even there the total figure for this general fund budget is given in neither document. The “general fund” budget is sometimes called “the operating budget,” but it does not include transportation spending, much of the university budget, and 27% of the total budget that comes from federal aid, without which huge programs such as Medicaid could not operate.

The governor emphasized “$325 million in spending cuts,” for a grand total of $8.3 billion in “spending cuts” over seven years. A portion of these “cuts” were indeed real reductions in state spending, a good slice of it through reduced aid to county and municipal governments. But much of the “spending cuts” were actually reductions in spending growth, mandated by state law, but no longer affordable.

Budget grows 30% in seven years

The budget O’Malley inherited in 2007 from Republican Gov. Bob Ehrlich — a name he still refuses to utter – totaled $28.7 billion. The fiscal 2014 budget will be $8.5 billion higher than that, a 30% growth. Federal funds to Maryland have grown 55% over that time period to $9.8 billion.

These numbers are not generated by conservative gnomes with green eye-shades, but are found on pages 6 and 7 of Maryland Budget Highlights book the governor submits to the legislature each year. The detailed budget books with personnel and program detail are not yet available online.

The Maryland Association of Counties is reporting that the governor’s budget does not include any new reductions in aid to county governments and that previous reductions to formula funding for local police departments and health departments have been restored. However, about a quarter of the cost of teacher pensions were permanently shifted to county governments last year.

Some fund transfers, moving dedicated “special funds” into the general fund, continue. For instance, $71 million generated by Maryland’s historically high real estate transfer tax for open space and farmland preservation is being converted to operating funds for the Department of Natural Resources. The money to buy land and development rights will instead come from floating new bond debt.

Payments for principal and interest on Maryland’s bond debt have grown from $654 million a year in fiscal 2007 to $984 million in fiscal 2014, a 50% increase.