Legislative Budget Plan Wraps, Governor’s Follow Through Unclear

What started with budget plans that were passed unanimously in the Senate and almost unanimously in the House, ended in a standoff with the Administration over budget priorities. The final budget approved by the General Assembly falls short of the Governor’s priorities, but also does not ensure funds will be allocated for initiatives fenced off by the General Assembly.

As reported by the Washington Post,

In the closing hours of the 90-day session, the Senate and the House of Delegates voted along party lines to approve a spending plan that included less funding than Hogan sought to shore up the state pension fund and did not go as far as the governor wanted in trimming the state’s structural budget deficit.

As a result, Hogan said he would refuse to use money the legislature earmarked to preserve state pay raises, full funding for the most expensive school districts and several health-related initiatives. “In all likelihood, we will probably have to use the money [in future years] to fix the problem they created,” Hogan said.

Key sticking points were over funding for education, a cost of living adjustment (COLA) for State employees, and increased Medicaid rates for health care providers.

The budget fight centered on a small fraction of the $40.7 billion state budget — about $202 million. The legislature wanted to spend that money on three things: $68.7 million to pay state employees so they do not lose the 2 percent raise they received in January; $68.1 million to the state’s 13 largest school systems, including Prince George’s and Montgomery counties, where the cost of educating children is more expensive; and the remainder for several health-care initiatives, including the continuation of funding to repay doctors who treat the state’s poorest residents.

The budget approved Monday night protects those funds so that they cannot be allocated for any other purpose. But lawmakers also cannot force Hogan to spend them. In the final moments of the session, lawmakers passed legislation that says if Hogan does not spend the allocated school funding, such spending would be mandated in future years.

For more information on the proposed FY 2016 budget and the House and Senate budget plans, see our previous posts on Conduit Street.

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