January 19, 2010

O’Malley budget decreases overall spending, borrows more

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By MarylandReporter.com Staff
News@MarylandReporter.com

For the first time in almost 40 years, the state’s total spending will go down in the coming fiscal year under the budget Gov. Martin O’Malley released Tuesday. He’s asking the General Assembly to approve $32.1 billion in expenses, $249 million less than the state is expected to spend in fiscal 2010.

The state started tracking year-over-year spending growth 39 years ago, O’Malley said, and total spending has increased every time.

At this point, it’s clear that holding local governments without aid increases will be a big part of the budget plan, as will reductions in Medicaid payments to hospitals. Employees will see furloughs again this year for up to 10 days, and won’t get merit-based raises.

O’Malley said about 44 people would be laid off, though the state would be getting rid of other, unfilled jobs.

It remains to be seen exactly what the impact of the spending plan will be. O’Malley’s office did not release the actual budget books, 2,000 pages or more that contain reams of data. Instead, he began his roll-out with about 20 pages of budget highlights.

The reduction would close a $2 billion budget deficit with the General Assembly’s approval. Lawmakers can cut O’Malley’s budget, but aren’t allowed to add to it.

Spending reductions make up about half of the fix, while transfers between other state funds and borrowing come up with another $913 million.

The budget is actually about 3 percent lower than the zero growth lawmakers had proposed last month.

Here are links to nine stories about the budget from other news organizations. O’Malley relies on accounting maneuvers in his proposed budget, reports Annie Linskey of The Baltimore Sun. Heather Harlan Warnack has Baltimore Business Journal’s take on the spending, Hayley Peterson has The Washington Examiner’s story and here’s the version by The Washington Post.

Here’s the Associated Press’s article, Nick Sohr’s look with The Daily Record and Erin Julius’ take for The (Hagerstown) Herald-Mail. The Gazette has its story and there’s an audio report from WYPR’s Joel McCord.

Brian Griffiths with Red Maryland criticizes O’Malley’s budget plan calling it “irresponsible budgeting”.