Gov. Lawrence J. Hogan Jr. (R) will introduce a budget on Friday that includes no new taxes, raises for state employees and spending on public education in excess of state mandates.
Hogan previewed the contents of the $46.6 billion fiscal year 2020 budget proposal, which is expected to increase spending by about 4 percent, to the press on Thursday. He will have a breakfast meeting with legislative fiscal leaders on Friday morning before releasing the full budget in detail.
Hogan said the FY 2020 budget is structurally balanced and will set aside $1.3 billion in reserves, while also including record funding for education. While that feat is made easier by mandated annual increases in education funding, Hogan said his budget also eschews the state funding formula, which would have cut state spending on public education in the city of Baltimore by $11 million because of declining enrollment, an issue faced by other counties as well. The budget will include an education spending increase for every jurisdiction in the state, Hogan said.
The budget will include $6.9 billion in spending for public K-12 education, including $200 million reserved to implement the recommendations of the Kirwan Commission “if and when” they are delivered, Hogan said. Other K-12 education funding includes $438 million for school construction funding, which the governor’s office said was the most ever in one year, $300,000 to establish three new P-TECH schools, $20 million in state funding to expand access to prekindergarten throughout the state, and a $7 million boost that more than doubles funding for the Broadening Options and Opportunities for Students Today (BOOST) Program, which provides funding for low-income students to attend private schools, to $10 million.
The proposed budget includes $1.45 billion in state funds for the University System of Maryland, a 4.2 percent increase over last year. Funding for community colleges, Morgan State University and St. Mary’s College of Maryland will also increase, as will a grant program for independent colleges and universities. Undergraduate tuition for state residents at public universities will be capped at a 2 percent increase.
Hogan said the budget will make room for a tax credit to student loan borrowers, which would allow a tax deduction for student loan interest. Other tax incentives in the Hogan budget will include an expansion of the tax credits available to businesses that locate in state Opportunity Zones, credits for job training programs, and an expansion of tax relief programs for first responders.
Nearly $11.5 billion will be directed to Maryland’s Medicaid program and the budget will also include nearly a quarter billion dollars for substance use disorder services, an increase of 20 percent over the current year, Hogan said.
State employees will receive a raise of at least 3 percent. The governor has also set aside funds to address a hiring shortage in state correctional facilities, which are expected to see the population of prisoners drop below 18,500 for the first time since 1991. The proposed budget will reinvest $3.8 million in correctional savings in programs to decrease crime and reduce recidivism. The budget also includes nearly $13 million to address violent crime in Baltimore City and $3 million to fund additional security measures at houses of worship at risk of hate crimes.
Transportation funding will come in around $3.3 billion, with almost $1.7 billion allocated to state highways, $221 million for the Purple Line, and $167 million in capital improvements for the Washington Metropolitan Area Transit Authority.
The budget also includes a $24 million boost in Highway User Revenue payments to local governments, bringing state spending to $255.9 million. While county leaders will likely be pleased by the increase, there is still a lot of funding to be made up for the program, which was slashed by about 90 percent during the economic downturn, Budget Secretary David R. Brinkley said.
The administration will also continue efforts to restore funding to transfer tax programs, including replacement of funds that had been diverted in the past. More than $267 million will be allocated to programs including state and local land preservation programs, Maryland Park Service operations, and development projects in State Parks.
The Chesapeake and Atlantic Coastal Bays Trust Fund is budgeted to receive $53.6 million.
More than $1.3 billion will be set aside in reserves.
“We must remain vigilant about maintaining savings in order to be better prepared for those times when more flexibility is needed, while also making necessary, targeted one-time investments. That is what our budget has once again accomplished,” Hogan said.