As reported by many news sources, Governor O’Malley released his proposed $37.3 billion Fiscal Year 2014 budget on January 16, which did not contain any new tax increases or significant spending reductions.  If approved as introduced, State spending would increase by 4% over the current fiscal year. As reported by the Washington Post:

A combination of rebounding economic activity, bounty from last year’s tax increases and greater federal funding flowing to the state under the new health-care law all but polished off a structural deficit that since the emergence of the housing crisis had saddled Maryland, like most states, with record annual shortfalls.

Although the budget includes $325 million in reductions,

It would also begin to restore money for an array of grant programs curtailed during the downturn. State employees would get 3 percent pay raises; police would receive money for training; municipalities would see a bump in road funds; and state agencies would get millions in “innovation” grants to rethink how to deliver services to residents.

As reported by the Baltimore Sun:

The plan would allocate a record $6 billion for education, and the governor emphasized that the companion $3.7 billon capital budget for construction projects would support more than 40,000 jobs. In the wake of the Newtown, Conn. shooting in which 20 schoolchildren and six adults were killed, O’Malley included $25 million to help Maryland schools upgrade security systems with features such as shatterproof glass and automatically locking doors. The money is part of $336 million in the capital budget for school construction projects, including $25 million to upgrade aging air-conditioning systems.

As reported previously on Conduit Street, the proposed budget does not contain,

any newly proposed reductions in aid to county governments or jointly state/county funded programs. Further, previous reductions to formula funding for local police departments and health departments have been restored, consistent with the temporary nature of the statutory reductions. The cost shifting of assessment functions of the State Department of Assessments and Taxation will abate to a 50/50 split, down from a 90% county burden for each of the last two years. The net effect of these incremental changes over the FY 2013 budget should be roughly $40 million.

To assist with cleaning up the Chesapeake Bay,

O’Malley included $31.5 million for the Chesapeake Bay Trust Fund used for bay cleanup — $6.6 million more than last year — plus $36 million to help with environmental projects such as controlling stormwater, which can carry pollutants into the bay.

Of the $36 million included in the capital budget, over $25 million in general obligation bonds is being provided for targeted local watershed implementation plan projects.  This allocation will also make grants available on a competitive basis for additional stormwater projects in watersheds heavily impacted by prior development.

As reported by the Capital Gazette, “The governor also kept two special environmental funds largely intact, the Bay Restoration Fund and Program Open Space.”

MACo will continue to review and digest the emerging details of the proposed FY 2014 budget.