Budget Restores Cumulative Budget Growth for Local Health Departments

Governor O’Malley’s proposed fiscal 2015 budget provides an additional $5.1 million for local health departments (LHD), an increase of 12.3% over the prior year.  This funding level restores cumulative growth in the funding formula, an approach that was abandoned during the years of cost containment.

The formula, otherwise known as Core Funding, established the minimum funding level for the program at $41 million in fiscal 1997, with subsequent increases based on inflation and population growth. These inflationary factors, which were applied to the prior year appropriation, increased funding to a high of almost $70 million in FY 2008.  However, to address State revenue challenges and close the structural deficit, funding for local health departments was reduced to $37.3 million and hovered at that level through FY 2013. At the same time, a new statutory interpretation determined that inflationary increases would only be applied to the base funding level instead of the prior year appropriation, permanently reducing and restructuring LHD funding.

MACo has raised concerns with this new interpretation and has advocated that it be revisited with the Administration and the budget committees of the General Assembly. Below is an excerpt from a letter MACo sent to the budget committee during prior budget negotiations.

Of grave concern for LHDs is the significant reduction in the base funding level to $37.3 million in FY 2010, which has been carried through to the FY 13 proposed budget, and the new interpretation with respect to inflationary adjustments which provide for only one year’s growth in inflation and population, instead of cumulative growth.

Inflationary increases for LHDs were restored in fiscal 2014 and MACo is pleased that the proposed FY 2015 budget applies the inflationary increase to the FY 2014 funding level, instead of the base level of $37.3 million.  Also included in the proposed LHD appropriation are funds for state employee cost of living adjustments (COLAs) and salary increments.  Health department employees in all counties, except Baltimore, Montgomery, Prince George’s, and Baltimore City, are considered State employees.