O’Malley Unveils Budget; Criticizes Tax Proposals

Friday, January 21, 2011 – Robert Lang
Governor Martin O’Malley is releasing  his Fiscal Year 2012 Budget this afternoon.

CLICK HERE to watch the governor’s budget announcement.

CLICK HERE to read the governor’s budget.

The governor began a briefing today saying that the budget proposed $1-billion in spending reductions, and 500 state jobs cut.

The governor says the state will preserve $700-million in its “rainy day” fund.

It does not contain any tax hikes as the governor had promised. Nor does it contain any furloughs.

O’Malley does say 1,400 employees applied for the buyouts offered in the last month.  He expects 1,000 of those applications to be accepted, and that will save taxpayers an additional $40-million.

The governor is proposing consolidating the state’s various transportation police forces, such as the MTA Police, as well consolidating several state highway facilities.

He is also proposing merger the Maryland Higher Education Commission with the Maryland Department of Education.

The governor is also proposing closing the Brandenburg Center near Cumberland, which is a residential facility for people with mental disabilities.

Like previous budgets, Governor O’Malley proposes transferring money from several state funds, including $60-million from the state’s transportation trust fund which is generated by money from the state’s gas tax as well as car and truck license and registration fees. 

O’Malley Criticizes Tax Proposals; Non Committal To Support

In an interview with WTOP Radio in Washington this morning, O’Malley did say that proposals to increase the taxes on alcohol or gasoline would have limits on their effectiveness for the state.

“Even that alcohol tax will not do the sort of heavy lifting  that needs to be done to close a billion dollar gap,” O’Malley told WTOP.

Advocates for the disabled, along with a health care reform advocacy group are pushing a 10-cent increase on the taxes on beer, wine and liquor, with most of the money being used to fund programs for the disabled, and to provide health insurance for the uninsured.  A number of lawmakers support the idea, but say the tax revenue should be used for the state’s general fund.

On the subject of a gasoline tax increase, O’Malley said he proposed tying the tax rate to the rate of inflation, but lawmakers rejected the idea in 2007.  He added that the gas tax is on “a dwindling revenue source,” noting that as there are more fuel efficient cars on the road less gasoline will be used, and there would be less tax revenue to the state.

O’Malley added that the state has to come up with ways to pay for highway improvements and mass transit which are funded by gas tax revenue.

Maryland’s gasoline tax has not been increased since 1992.  The rate stands at 23.5-cents per gallon.

Officials of AFSCME Maryland, the union representing most state workers, say they have negotiated a contract that would end furloughs.  The union says on its website that when the state closes non-emergency facilities for five days workers would be paid.

Workers would get a $750 bonus in 2012, along with a 2% raise in 2013 and a 3% raise in 2014, with additional step increases that year. 

Union members have until January 31 to vote on the deal.

AFSCME Maryland had endorsed O’Malley in last year’s election, even though the O’Malley Administration had imposed furloughs in the last few years.

In the WTOP interview, O’Malley also said his budget would address ways to stabilize the pension fund for state workers and teachers.  He took issue with governors in other states who are cutting worker pensions to save money.

He specifically criticized New Jersey Governor Chris Christie.

“Like Mr. Christie  who just delights in being abusive towards public employees, and acting like all of the world’s problems are caused by people who pick up the trash and work in public employee jobs.  They are trying to take advantage of this time for their own ideological gain I suppose of eliminating pension systems…for public employees,” O’Malley said in the interview.

Once O’Malley introduces the budget, the House of Delegates will consider it first.  Under Maryland’s Constitution, lawmakers can only make further cuts in the budget.  They cannot add spending programs. 

Lawmakers have until April 4 to approve a budget for the fiscal year that starts on July 1.


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