From the office of Del. Mary-Dulany James:
Last week Governor O’Malley presented his operating and capital budget proposals. The proposal balances the State’s budget primarily through cuts to State spending and re-formulations of longer term budgets. The Governor’s spending proposal cuts the structural deficit by 37% ($730M), balances the budget for FY12 and does not increase taxes. I think this is a strong budget proposal that accomplishes the difficult feat of being both balanced and not raising taxes on Marylanders during these trying times. Below are some of the highlights of the Governor’s proposal:
Protecting Education – The single largest investment that Maryland has made over the past decade is in the State’s K-12 public schools, university system and community colleges. The FY12 budget invests $5.7B in education for the second straight year, fully funds GCEI, provides $250M in school construction funding and keeps tuition at universities and community colleges affordable. All of these investments are made to provide a high quality workforce for the State’s knowledge-based economy.
Supporting State Workers – After being furloughed for three straight years, Governor O’Malley has ended furloughs for State employees. Over the past three years, State employees have given $580M back to the State as a result of the furlough program.
Promoting Job Creation – The Governor has included several job creating initiatives, including a capital budget that will put nearly 15,000 people to work. The FY12 budget proposal provides $12.4M for stem cell research funding, $8M for the biotech tax credit, and $4M for the Maryland Biotech Center, all of which produce high paying jobs.
Reforming the Pension System – 2010 was the first time in three years that investment returns were positive for the State’s pension fund. However, the plan’s funded status has declined to 64% funded in recent years, due to the 2006 pension enhancement, steady increases in the teacher salary base and declines in the retirement system assets because of the recession. The Governor has proposed to reduce the unfunded retiree health liability by $7 billion and achieve 80% funding of the pension system over the next 10 years.
Streamlining Government – the Governor is proposing to merge the Maryland Higher Education Commission with the State Department of Education to form a single education agency that streamlines the Pre-K through post-graduate education system. The Governor is also proposing to consolidate smaller State police forces under the Department of General Services and consolidate highway maintenance functions within MDOT.
Maintaining Cash Reserves – The Rainy Day Fund is fully funded at $682M and the Governor has included a cash balance of $120M, for a total of over $800M in cash reserves.
This is the first step in a long budget process. The House will move the budget first this year: reviewing the budget, holding briefings and examining options for FY12 starting next week. The House will take a careful look at the Governor’s proposal and likely cut more from the budget in the coming weeks. I hope to protect those programs and projects that matter most to you. Please let my office know if there is anything in the budget that you have a particular interest in.
Very Truly Yours,