April 10, 2010

Legislature approves $32 billion budget GOP predicts it will lead to tax hikes

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By Andy Rosen
Andy@MarylandReporter.com

The state’s $32 billion budget for fiscal 2011 becomes law today, as the House gave final approval to its compromise with the Senate.

The bill is unique in the Maryland General Assembly, in that it does not require Gov. Martin O’Malley’s signature to become law.  The Assembly can only cut money from the governor’s proposal.

But the governor will need to sign separate legislation balancing the budget by changing funding formulas and revenue allocations.

The measure passed after about an hour of debate, which returned to familiar themes in what has been one of the toughest issues of this year’s session.

Republicans accused the majority Democrats of crafting a budget that relies too heavily on one-time transfers, the use of special funds and federal cash. Democrats defended the plan, noting that it is the first modern budget with total spending lower than the previous year.

On the floor, Minority Leader Tony O’Donnell, R-Calvert and St. Mary’s, said the lack of long-term spending cuts in the budget makes it “almost guaranteed” that the state will enact tax increases next year. The state will run out of federal stimulus cash, and also hasn’t dealt with long-term liabilities for pensions and other retiree benefits, O’Donnell said.

“For all of those reasons, and because of the draining of funds, and because of the imminent drying up of federal funds, we believe this [decision] locks in future tax increases,” he said.

Del. John Bohanan, D-St. Mary’s, said the smaller size of this year’s budget — about $300 million less than last year — should appeal to all lawmakers.

“Since you’ve been here, this is probably the leanest budget you’ve ever seen, and you’ll have an opportunity to vote on it,” he said.

Still, the vote was almost entirely along party lines, at 105 to 34. Two Republicans, Del. Page Elmore, Eastern Shore, and Del. Wendell Beitzel, Garrett-Allegany, voted for the budget.

Beitzel , an Appropriations Committee member, said there were a lot of things he would have changed about the spending plan.

Still, he said he appreciated the positions the House took, such as its opposition to the proposed transfer of teacher pension costs to local governments. The Senate had proposed a transition to a 50-50 split of all retirement costs, but backed down in the face of House opposition.

As he spoke, Beitzel was met with fixed glares from Republican leadership.

“We in the House tried to really address this and to things that would minimize the impact on the counties,” he said.