Maryland’s House Republican Budget Rejects Tax Increases, Maintains Services

Earlier this week, Maryland’s House Republican Caucus presented a budget alternative that maintains state services and rejects any tax increases. Their proposal cuts an additional $511 million from the governor’s proposal, while avoiding shifting teacher pension costs to the counties.

In pleading poverty for the state’s coffers and promoting higher taxes, Maryland Democrats ignore that in the current fiscal year, FY 2012, the state’s general-fund spending increased by over 11%. This was the seventh-highest increase nationwide. According to a study by the National Governors Association and National Association of State Budget Officers, the national average increase was just 2.9%. Had Maryland held spending growth just to the national average; our spending would have been a billion dollars less. That number matches Maryland’s so-called “structural deficit.”

Governors in many other states avoided the choices now being faced by Maryland by not locking-in Medicaid spending at higher levels that could not be sustained after the special Federal assistance disappeared. Maryland would be much better served to follow the same practice of not increasing spending when future revenues are unlikely to support it.

At House Republican budget roll- out, Delegate Kathy Szeliga observed: “The FY 2008 budget was $29.6 billion; the Governor’s budget proposal for this year is $35.9 billion. This is a whopping 21% increase in spending since Governor O’Malley took office. Although there is a tremendous amount of rhetoric coming from the Governor’s office about $7.5 billion in spending cuts, the overall picture tells a very different story.”

• Cut 2% in spending for state agencies across-the-board – an action the Republicans said would save $12 million
• Other Adminstration/DLS Proposed reduction – $180.6 million
• Discontinue stem cell research grants, cited as saving $10 million
• Eliminate the Sustainable Communities Tax Credit, cited as saving $7 million
• Eliminate biotechnology tax credits, cited as saving $8 million
• Freeze higher education funding, cited as saving $31 million
• Freeze kindergarten through 12th grade funding, rather than partially shifting the cost of teacher pensions to local jurisdictions, cited as saving $174 million.

Because of the reduced spending, the Republican plan would balance the state budget by avoiding an increase in taxes or fees and by making several cuts.