House committee reduces O’Malley $37 billion budget by $420 million

By Len Lazarick
Len@MarylandReporter.com

House of Delegates (file photo)

The House Appropriations Committee finished cutting Gov. Martin O’Malley’s fiscal 2014 budget Friday, and the final tally released Monday night in its report to the House shows the budget is $420 million less than what the governor proposed, bringing it slightly under $37 billion.

The overall budget still increases by $1.26 billion, or 3.5%, but excluding federal funds and the money put in the Rainy Day fund, spending of state taxpayer dollars rises by just 2%. There will be a planned surplus (general fund balance) of $200 million, plus another $921 million in the Rainy Day fund, bringing these reserves up to $1.1 billion.

“Building up these balances will help cushion any negative impacts on the Maryland economy resulting from federal budget actions,” the committee said, referring to the federal sequestration cuts.

The Maryland legislature is only permitted to cut the governor’s budget, not add to it or move funds around, except by changes in law. The full House is scheduled to take up debate on the budget on Wednesday.

Program cuts less than $75 million

The committee actually cut less than $75 million in general fund dollars from programs in the budget. The bulk of that — $45 million — came from Medicaid due to over-budgeting this year.

But Medicaid is still the largest single program in the state budget at more than $7 billion combined in state and federal funds. The fiscal 2014 Medicaid budget includes $349 million more in new federal funds to cover an additional 109,000 people under the Affordable Care Act.

The largest expenditure of state taxpayer dollars supports the public school system with $6 billion next year, up $105 million or 2.1%. State funding for teachers retirement increases by $100 million.

Funding for state colleges and universities goes up by $78 million to $1.3 billion, a 6.5% increase.

The O’Malley budget also provides a 3% cost-of-living adjustment for state employees, who will also see the first merit raises in five years.

Committee vote

Appropriations Committee members approved the budget in 16-5 vote, with five of seven Republican delegates voting against the budget.  Three Democrats who were present to vote for earlier amendments were absent for the final vote.