The Balance Beam of Maryland’s Budget

The State must balance its budget, yes. . . but how does the State budget balance according to county concerns? As this year’s budget acrobatics draw to a close – the General Assembly passed the budget bill today – some items of local interest have solid footing, while others teeter, their fate yet to be determined by the Governor’s actions.

Limited Dollars Landed for Local Roads

In a surprise turn, the budget passed by the General Assembly has far, far less funding for local roads and bridges than either body had initially approved. Despite nearly universal bipartisan support for extra local road funding in both the Senate and House budget plans previously adopted, the conference committee’s final resolution will merely provide funds to continue last year’s meager distributions – including a substantial grant to municipal governments and a fairly trivial share for counties and Baltimore City. Read more in Final Budget Plan “Flatlines” Local Roads and Bridges.

Education Funding Has Two New Turns

The budget provides and some additional funding for two specific education and school construction needs.

The Governor’s budget fully funded education formulas, including the Geographic Cost of Education Index (GCEI). As introduced, the Governor’s budget also included extra funding for three counties, Carroll, Kent and Garrett to ease fiscal issues associated with declining enrollment. Then, the Governor’s Supplemental Budget No. 3 added additional funding for Calvert County and Baltimore City for the same purpose. Read more in Budget Helps Offset Declining School Enrollment.

For school construction, the Governor’s budget included $280 million in funding for the Capital Improvement Program (CIP) and an additional $20 million for the Capital Grant Program for Local School Systems with Significant Enrollment Growth or Relocatable Classrooms. The General Assembly’s budget will increase from $20.0 million to $40.0 million the amount for that special capital grant program, and is passing legislation to expand the program. Read more in $20M More for School Construction Program.

Several County Priorities Left Teetering

A few local priorities have been precariously funded by redirecting part of the appropriated State’s “Rainy Day” Reserve Fund allocation.

The Governor will have discretion whether to fund this portion of the budget, which now totals around $80 million. According to the budget’s language, the Governor may not choose to fund a few projects from this portion of the budget — it is an all-or-none decision. County items of interest in this section include $6.1 million for the Aging Schools Program, $19 million for teacher pension increases, and $9 million for public safety radios.

Aging schools program funding is widely seen as the most flexible and effective to target small-scale maintenance of older school buildings, a topic raised several times this year by the Board of Public Works. County governments provided more than $1 billion towards K-12 capital costs in 2016, and even combined with the State’s commitment, many government struggle to keep pace with renovation and expansion needs. The General Assembly re-directed $6.1 million intended by the Governor for the State Reserve to the 2017 Aging Schools Program. Read more in Aging School Funding Tacked to Budget Reserves.

While the General Assembly shifted more than $200 million in teacher pension costs to county governments through a 2012 law, this year, teacher pension costs of local school boards will increase by more than $25 million, due in part to variables outside their control. The General Assembly’s budget provides $19 million of funding for FY 2017 that would account for increases due to those variables. The funding is provided through the State Reserve Fund allocation, however. Read more in Rainy Day Funding Re-Directed for Teacher Pension Increase.

$15 million is provided in the General Assembly’s budget to build the State’s public safety communications system. This amount matches the Governor’s total appropriation, except that $9 of the $15 million would come from an allocation the Governor had directed towards the State Reserve. The Maryland FiRST radio system is integral to county public safety: Allegany and Garrett counties are in the process of joining and Kent, Caroline, Queen Anne’s, and Talbot counties already use the system as their primary network. Read more in A Portion of Public Safety Radio Budget Comes From Funds Dedicated to State Reserve.

Prior Policies Hold Fast

In other sections of the budget, the General Assembly seems to be holding fast to its positions, such as a requirement that counties must pay for cost-overruns in for attorneys provided at bail review hearings.

For the second year in a row, $10 million has been restricted for the operation of the appointed attorney program with a requirement that counties pay for cost overruns. The requirement to provide representation is consistent with the holding of the Court of Appeals in DeWolfe v. Richmond. There is also legislation pending that would obligate counties to pay for any costs that exceed what has been appropriated and restricted. Read more in Senate Funds Appointed Attorneys, Counties to Pay for Cost Overruns.

Over the past few years, the General Assembly has been reticent to adopt legislation to create a bottle deposit system. This year they played with the idea, inserting budget language on the topic, but have ultimately gone back to square one: no bill and no budget language requiring a study of a bottle deposit and redemption system. MACo has opposed bottle deposit legislation based on concerns that the program would negatively affect broad-based county recycling programs key to overall state recycling goals. Read more in Bottle Deposit Study Language Removed From Budget.

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