Governor O’Malley Releases $39.3 Billion Budget for Fiscal 2015

Governor O’Malley released his proposed fiscal year 2015 budget on January 15.  The budget, which totals $39.3 billion, closes the budget gap with no new taxes or fees and provides increased funding for education, public safety, and health care.

As reported in the Maryland’s Money Matters blog:

To close Maryland’s $584 million revenue shortfall, Governor O’Malley’s budget seeks to close the deficit without raising taxes. Instead, 74 percent ($457 million) of the revenue is made up through spending cuts while 26 percent (163 million) comes from the sale of old helicopters and other transfers and payments. The budget also leaves $800 million (5 percent of the General Fund balance) in Maryland’s Rainy Day fund and leaves $37 million unallocated.

Over the longer term, the O’Malley administration projects that with this budget, the state will close its structural deficit by FY 2017 with a $31 million surplus.

However, the budget has been met with mixed reviews. As reported by the Annapolis Capital:

But, as the budget was distributed Wednesday afternoon, House Minority Leader Nic Kipke, R-Pasadena, said there still “aren’t enough jobs to go around.”

Kipke accused O’Malley of “setting up this budget to put pressure on the next governor to raise taxes” and said the governor is still expanding the budget by nearly $2 billion.

The Department of Legislative Services, the General Assembly’s policy arm, will also be scrutinizing the budget. As reported in the Washington Post:

Warren Deschenaux, director of the Maryland General Assembly’s Department of Legislative Services, said the budget proposal was a good starting point but was built on several assumptions and budgetary maneuvers worthy of more scrutiny.

Among other things, the governor’s budget relies heavily on savings at the expense of the state’s contribution to employee health insurance and retirement benefits, Deschenaux said. He said the budget also engages in one-time fixes and questionable practices. For example, he said the state was using a preservation fund intended to buy open space in Maryland for current spending and borrowing money for land purchases, thereby driving up the program’s overall cost.

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