Md. lawmakers pass $30 billion budget

Warned of serious fiscal challenges next year, lawmakers voted Monday to approve a $30 billion state budget, giving Gov. Martin O'Malley most of what he wanted to fulfill campaign promises and putting off tough financial decisions until next year.

Delegate Norman Conway, the chairman of the House Appropriations Committee, told lawmakers that "the hardest work remains ahead of us" and "time is a luxury that we will not have next year."

"I've spoken to the governor and encouraged him to hold a series of fiscal summits with the fiscal committees throughout this interim, because solving our fiscal problems will require a total team effort from the House, the Senate and the governor," said Conway, D-Wicomico.

Maryland is expected to face an estimated $1.5 billion structural deficit next year, meaning that state spending is projected to be more than tax receipts if current trends continue. The deficit is estimated to be about $5 billion over four years.

The budget that avoided cuts reflects lawmakers' willingness to give O'Malley the time he asked for to examine ways to resolve the structural deficit by finding efficiencies in government before considering raising taxes or legalizing slot machine gambling to boost state coffers. Conway said he hoped to have a plan to fix the structural deficit "once and for all when we return here next January."

"This task is not easy, but I'm confident that by working together we can solve these problems," said Sen. Ulysses Currie, D-Prince George's, chairman of the Budget and Taxation Committee.

O'Malley, a Democrat, touted the session as one of "historic" progress in education funding and the environment. He also said progress in building consensus was crucial after "four years of pent up demand to make progress."

"As people see that we are giving to the state of Maryland a government that actually works, I think they'll be more willing to have those tough conversations about the investments we need to make to continue to make progress," O'Malley said.

But Delegate Pat McDonough, R-Baltimore County, voted against the budget bill, calling it "an anti-taxpayer's budget." He criticized the use of substantial reserves from the state's rainy day fund to pay for increases in areas such as education, which he said has been highly funded for years.

"It's going to make things worse," McDonough said. "We're digging a hole deeper ... We wasted an entire year, and we didn't have the luxury to do that."

Delegate Luiz Simmons, D-Montgomery, bemoaned the lack of spending cuts or new revenue.

"I think this was the year of kicking the can down the road," Simmons said. "We didn't deal with the structural deficit. We didn't start any kind of discussion with the public about the budget, about raising taxes, about cuts."

The budget included about $967 million from the rainy day fund, leaving about $674 million in the fund. The state wants to keep more than 5 percent of revenues in the fund to protect Maryland's AAA bond rating.

The House voted 133-5 to approve the budget; the Senate voted 40-7. Both chambers also approved the state's capital budget, which included a record $400 million for school construction.

The budget includes an increase of about 12 percent for higher education, including money for a one-year tuition freeze at public colleges and universities. It includes more money for health care programs, with Medicaid funding growing $294 million. The budget also sets aside $23 million for stem cell research, an increase of $8 million and $2 million less than O'Malley requested. The budget puts off until next year paying $53 million for the Intercounty Connector, a road to connect the I-270 corridor in Montgomery County to I-95 in Prince George's County.

The budget takes effect July 1.

Senate President Thomas V. Mike Miller, D-Calvert, acknowledged that the budget grew slightly from last year, but said it was to help O'Malley keep his campaign promises.

"Now, we can get to work and do the tough stuff," Miller said.

House Republican Leader Anthony O'Donnell voted for the budget, but expressed regret that more wasn't done to address the coming structural deficit, which he said "sets us up for a potential budgetary train wreck next year."

"Next year, there's no doubt in my mind that this assembly will be going to the taxpayers to increase their taxes," O'Donnell said.

Some lawmakers pointed to recent reports of weak sales tax receipts, which declined 3.1 percent in March, as further cause for concern.

Sen. Lowell Stoltzfus, R-Somerset, said the lack of cuts could create a fiscal problem that "next year is going to be huge."

"We're delinquent in our duty passing this budget this year," Stoltzfus said. "... We make a terrible mistake in passing this budget."