- The Enterprise
- The Recorder
Gov. Martin O’Malley (D) unveiled his $37.3 billion fiscal 2014 budget Wednesday, a spending plan that he says will create jobs and insulate the state from possible federal spending cuts.
”This budget is a jobs budget,” O’Malley told reporters in Annapolis, explaining that the $3.7 billion set aside for capital projects would support more than 43,000 jobs.
The governor’s fiscal 2014 proposal represents a 4 percent increase over the fiscal 2013 budget, and, as submitted, contains no changes to the state’s tax rates.
But that doesn’t mean new revenues are off the table.
O’Malley said he and Senate President Thomas V. Mike Miller Jr. (D-Calvert, Prince George’s) still were discussing options for funding transportation projects, which many see as a top priority for lawmakers this session.
”I think he has some ideas. I offered my ideas last term,” O’Malley said, alluding to proposals to phase in a 6 percent sales tax on gasoline and to raise the overall sales tax by one penny. Neither option moved forward in 2012.
O’Malley’s spending plan includes $6 billion in K-12 education aid, an increase of $206 million from fiscal 2013, and reduces the state’s structural deficit — which stood at $2 billion three years ago — to $166 million.
The remaining gap was left in place because “I don’t know what’s going to happen on Capitol Hill,” said Secretary of Budget and Management T. Eloise Foster.
Last month’s last-minute agreement in Congress to avoid the so-called “fiscal cliff” left the lingering threat of federal spending constrictions known as sequestration, which could take effect in February.
O’Malley’s proposal increases the state’s Rainy Day Fund to 6 percent of revenues, or about $921 million, and projects a fund balance of $236 million, which would bring cash reserves to about $1.16 billion.
O’Malley said those funds would safeguard the state against “the hari-kiri Congress down the street,” comparing the fiscal brinkmanship in Washington to the ritual suicide practiced by Japanese samurai.
Republican leadership took issues with O’Malley’s claims about a “jobs budget,” arguing that the proposed capital spending plan supported roughly the same number of jobs as last year’s proposal.
The governor wasn’t creating 43,000 new jobs, but “43,000 different jobs,” said Sen. Minority Leader E.J. Pipkin (R-Upper Shore). “There’s really nothing in this budget that does anything for private-sector job growth,” he said.
Pipkin also criticized O’Malley’s plan to attract Hollywood productions to the state by raising the film tax credit to $25 million — an increase of $17.5 million over fiscal 2013 — while the governor has supported efforts to repeal the state’s tax credit for mined coal.
The state’s ability to increase the Rainy Day fund was likely a sign that Marylanders were being taxed too much to begin with.
The conservative group Change Maryland also took aim at the spending plan, warning that the transporation funding issue would soon resurface.
”Nowhere in this budget document is any mention made to helping Maryland’s blue collar workers or other working people,” group Chairman Larry Hogan said in a statement Wednesdsay. “However, we’re all told to wait some undefined sale and gas tax increase later on that will hit poor people the hardest.
”Maryland’s state employees are slated to receive a 3 percent cost-of-living adjustment and will face no service reduction, or furlough, days, according to O’Malley’s proposal.
The proposed capital budget also includes $210 million over five years for building new regional medical center in Prince George’s County.
”We’re delighted that [the governor] came through with this promised funding,” said Del. Doyle L. Niemann (D-Prince George’s).
In all, O’Malley’s budget showed how well the state has managed given the recent economic downturn, said House Speaker Michael E. Busch (D-Anne Arundel).
Busch said he was very happy after being briefed on the proposal.
“He wasn’t asking us to raise any revenues, and we were fully funding all of our programs,” he said.
The proposed budget was good news for Maryland’s 157 municipailities, which will benefit from an increase in Highway User Revenues — funds allocated for local road repair projects — to $23 million.