House Budget Decisions – Pension Offsets and Other Budget Items

The House Appropriations Committee met this afternoon to finalize action on its budget plan.   Following a lengthy discussion, the Committee voted 16 -9 to shift the costs of the state pension system onto county governments over three years. The proposal would cost county governments over $136 million in FY 2013, and ramps up to $260.7 million by FY 2015. Just as in the Governor’s proposed budget and the Senate plan, a number of offsets have been adopted to help the counties cover the cost of the pension shift as it is being phased-in.  Items being provided as grants or budgetary relief were voted on the House Appropriations Committee, and those items generating revenue were voted on by the House Ways and Means Committee.  These items have been incorporated into SB 152, the Budget Reconciliation and Financing Act, SB 523, State and Local Revenue Act of 2012 (bill as amended by the Committee), or the Governor’s budget as introduced.  The adopted offsets are listed below.  MACo has also prepared a grid comparing the Governor’s proposed budget plan, Senate approved plan, and the House budget plan.

  • Additional Local Income Tax Revenues – $31.5 million
  • Teachers’ Retirement Supplemental Grant (Disparity Grant) – $27.6 million and includes the Miscellaneous Grant for Baltimore City
  • Recordation Tax Indemnity Mortgage – Estimated offset $35.7 million
  • Forgiveness of Local Income Tax Reserve Repayment – $36.7 million
  • Restoration of Local Police Aid – $22.1 million in FY 14 and $22.8 million FY 15
  • Restoration of Inflationary increases for Local Health Departments – $2.2 million in FY 14 and $3 million in FY 15
  • Federally Funded Teachers beginning in third year of shift – $37 million

The Committee took the following actions on other items of interest in the Budget and Financing Reconciliation Act:

  • Rejected language to authorize the Governor to flat fund most programs at the FY 12 level for FY 13 through FY 17
  • Adopted language to require school boards to include funding for court judgments in their budgets

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