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Marylanders for  a Balanced Approach

House Appropriations Committee Crafts Its Version of the Budget

(March 29, 2010) Late Friday night, the House Appropriations Committee completed its final decisions. The committee cut about $126 million beyond the $1 billion in cuts proposed by Governor O’Malley. In total, this is close to the $120 million cut by the Senate.

While Senate and House are close on the total, there are differences to be resolved in conference on individual budget items and on laws governing future budgets. For example:

Teacher retirement: The Senate calls for local school systems (and libraries and community colleges) to begin contributing towards retirement payments for teachers and other employees beginning in 2012. The House rejected the plan and is calling for a panel of experts to study the proposal prior to next year’s legislative session.

Legislative Scholarships: Maryland Senators and Delegates are permitted to award, at their discretion, a total of $11.5 million in college scholarship funds. The House approved budget language which would eliminate these programs in 2011 and allow for the funds to be transferred to scholarship programs administered by the Maryland Higher Education Commission. (The Senate approved the legislative scholarship funding intact)

Multi-year Formulas: Both versions freeze most state funding formulas for fiscal 2012 (such as public schools, local transportation and police, community colleges and private colleges).  In general, the House recommendations provide swifter and larger increases in these formulas beginning in 2013.

Disparity grants: Disparity grants, totalling $120 million, are targeted grants to local governments whose income tax base (per capita) is less that 75% of the state average. Both Senate and House proposals limit the amount f aid in 2011. The House adopted a technical change to the formula which saves Prince George’s County from suffering an $18 million loss of funding.

Tourism: The House restored a $1 million Senate cut to tourism development funding.

Cigarettes, Farmers and Private Schools: The Senate cut $700,000 from tobacco settlement funds for agricultural programs. The House restored the agricultural aid and instead cut $450,000 for aid to private schools for textbook purchases.

Employment and Training: The House cut $117,000 more deeply than the Senate into youth employment programs, and eliminated a program to assist foreign-trained nurses ($100,000).

Arts Education: The House wants to restore $200,000 of a $500,000 Senate cut to Department of Education Fine Arts grants

The House cut $4 million more from private colleges and universities than the Senate recommendation. (The House position would still fund $4.5 million more than the amount proposed by the Governor).

Senior Centers: the House reversed a $50,000 Senate cut to Senior Activity Centers

Next steps

The budget will be considered this week by the full House of Delegates. We’ll have additional details on the Appropriations Committee plan at that time.

Following approval by the full House, a conference committee of 5 Senators and 5 delegates will meet to resolve remaining differences.

The constitutional target for enactment of the budget is April 5. The legislature sometimes misses this deadline, but is expected to complete its work by the scheduled conclusion of the legislative session on April 12. The Budget Bill becomes law upon adoption by the legislature.

The associated “Budget Reconciliation and Financing Act,” (“BRFA”) requires the Governor’s signature. The BRFA contains the provisions related to teachers’ retirement contributions and future-year formula changes, for example.

©2010 Maryland Budget and Tax Policy Institute. All Rights Reserved.

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