Economic policy center finds Hogan's budget misses state's needs

us_money.jpgAn analysis by Benjamin Orr and colleagues at the Maryland Center on Economic Policy (MCEP) finds some thin spots in the rosy picture presented by Gov. Hogan's proposed budget -- education, environment, human needs and a structural deficit top the list.

/PM BlogSpace Report/ Gov. Larry Hogan’s budget, which the Assembly must appropriate into actual being, seems on the surface to track with his claims for bipartisan moderation – which have given him a national profile that not all observers find persuasive.

An analysis by Benjamin Orr and colleagues at the Maryland Center on Economic Policy (MCEP) finds some thin spots in the rosy picture.

“For the first time in years,” the analysis summarizes, “the governor’s proposed state spending plan for the next budget year includes no major cuts, funds raises for state employees and contractors, and supports new investments in key priorities like increasing access to affordable child care and building or renovating schools. However, it still leaves state lawmakers with some significant choices as the General Assembly takes up its task of working through the budget.”

As many know, and the Assembly is painfully aware, the legislators don’t have a lot of room to raise revenue or otherwise add to what comes down from Hogan’s people in Maryland’s constitutionally strong-executive system.

Orr and colleagues point to “three things to keep in mind about the governor’s proposal:  The governor doesn’t propose any new investments in education” to meet Kirwan Commission recommendations, even though the Assembly “set aside $200 million” last year as a down payment.

The Hogan budget also is $62 million in the red from the starting gate, compared to expected revenues, and many expect a recession or downturn to come within a year or two that could make long-term budgeting an anxious realm for all.

Several elements in the budget, though they have the appearance of bipartisan bonhomie, were actually mandated by the AssemblyMD_state_house_sketch.jpg either last year or in previous years: $15 million more for community college scholarships; increases “in the monthly benefit amount for the very low-income families who receive Temporary Cash Assistance and individuals who receive Temporary Disability Assistance” and parallel boosts in “the rates that the state pays to contractors who provide a range of services for people with disabilities, addiction treatment, foster care, child care for low-income parents, and more.” And a significant raise in the pay for correctional officers is hardly compassionate; the state’s pay level for these folks has been so low that staffing levels are near-cratering.

The MCEP roundup finds some bad habits recurring. “The governor is proposing doubling down on business tax breaks that have proven ineffective as well as creating additional tax loopholes, with a total cost of $35 million this year and $138 million per year once fully phased in. … Maryland can’t afford new tax giveaways.”

Too little and too late is another theme. Despite a big increase in federal child care subsidy money thanks to Congress, MCEP notes that “Maryland’s child care subsidy rates will likely still be far below federal standards as of February 2018.” And, as might be expected from a governor who made his money in real estate, there’s a big increase in assistance offered to home buyers but “no meaningful increase in federal housing assistance payments” plus no state chip-in—"which means that thousands of families who rent will continue struggling to keep a roof over their heads with no help at all.”

 

The budget does keep “the state’s promise to invest in the Metro transit system in the Washington, D.C. region” and keeps faith with DC and Virginia in the shaky pact. “Local governments will also see a significant increase in funds for local transportation projects, with more than three times the amount of funding that was available in this year’s budget,” the MCEP account says.

We note however that the Maryland Association of Counties (MACO)’s analysis shows that the state’s share of Highway User Revenues cratered as a result of the Great Recession and has not at all recovered, so …locals are getting about 20 cents on the dollar that they got pre-Recession.

us_money.jpgAnd the whole transportation issue is shadowed by Hogan’s heavily-contested proposal to build new toll lanes on the Beltway in Maryland and on I-270. Moreover, the state has signed a compact with many of the Eastern Seaboard states already in the Regional Greenhouse Gas Initiative (carbon reduction in power generation) that would add decarbonization of transportation to the project. More cars in more lanes are probably not going to get us there.

And there are big pieces missing, MCEP’s account emphasizes. There is no acknowledgement of the major funding demands that the Kirwan Commission for school improvement implies. “The governor has instead chosen to leave inflation-adjusted state school funding per pupil almost exactly where it was five years ago, when only six of Maryland’s 24 school districts were funded at or near state standards.”

Environmental programs, including “local water quality, wastewater treatment, and agricultural runoff management projects [are cut] by more than $150 million” as part of an overall drop in environmental funding of 7 percent. All those diminished efforts are critical to Bay health.

And 2,700 Marylanders with disabilities languish on a waiting list for assistance in getting meaningful work because of insufficient state and federal funding that’s brought a loss of 17 fulltime staff at the Division of Rehabilitation Services.

So the sunny-day Hogan budget puts a heavy load on the General Assembly to adapt it to what Marylanders actually need, according to the analysis of this respected, independent budget and policy center. Where to start?