The Hogan Budget – What It Means For Counties

Today, Governor Hogan unveiled the basics of his FY 2016 spending plan, with more details expected tomorrow as the budget itself is formally introduced. In this item, MACo will try to digest and encapsulate what we know and understand about this year’s spending plan, with a focus on county government funding programs.

-No new Highway User Revenue funding for county roads and bridges
-Reductions in formula growth for several education programs
-Program Open Space repayment canceled, and diversion of state transfer taxes
-Several other local areas flat-funded back to FY2014 levels

We will seek to update this item as new information becomes available. For general coverage of the Hogan Budget, check the Baltimore Sun‘s political blog coverage.

A Sun editorial from late Thursday previews the legislative debate on the budget proposal:

For all his talk of strong medicine and ending a spree of overspending in Annapolis, Gov. Larry Hogan’s first budget, at least as he presented it, did not sound so drastic. At his first news conference since his inauguration, he said he increased funding for K-12 and higher education, maintained investments in school construction funding, avoided state worker furloughs and layoffs and, at least for the moment, left in place funding to continue the Red Line and Purple Line transit projects in the Baltimore and Washington areas.

The Overall Essentials:

-Resolves the FY15 and FY16 shortfalls, and seeks to address the state’s structural budget deficit

-General Fund budget increases by 2.4% (or 0.5% after certain exclusions), many drivers are mandated appropriations

-Largest spending reductions are to medical providers, employee compensation, school funding, and unspecified agency reductions

-Record funding for education, though some programs cut from expected growth levels

-$1.4 billion for highway development, and funding for major transit lines intact while projects are to be reevaluated

The County Effects:

-$35m in local aid reductions (program details not yet available, but flat-funding of several programs cut earlier this month seem likely – police aid, local health departments, disparity grants, and community colleges)

-education reductions include eliminating the cost-of-living adjustment for the main school funding programs, halving the Geographic Cost of Education Index, and

-public school construction totals $250m in bonded projects, plus $30m in pay-as-you-go projects

-Deleting a statutorily scheduled $50m repayment of Program Open Space funds diverted in past years, and redirecting some funding from the state transfer tax to the general fund, instead of POS and related programs statutorily receiving those funds

-No additional funding for local roads and bridges through Highway User Revenues or similar distributions; FY15 grants for potholes ($10m to counties) and municipal roadways ($16m statewide) were discontinued

MACo will continue to provide updates as more details become available.

Michael Sanderson

Executive Director Maryland Association of Counties
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