From State Sen. J.B. Jennings:
THE 2015 GENERAL ASSEMBLY SESSION & THE FY 2016 BUDGET
The 435th Maryland General Assembly convened on Wednesday, January 14, 2015. And, for the first time in 8 years, I believe there exists a real opportunity for Republicans and Democrats in the state legislature to work together to get state spending under control and improve the business climate in Maryland.
The legislative session is always shaped by the Governor’s agenda, his budget and his policies priorities spelled out in the in the bills he introduces. Governor Hogan was sworn into office on January 21st and therefore, it will be his policies and his budget that will influence the course of the 2015 session.
Needless to say, I am excited to have the privilege to serve as Senate Minority Leader during Governor Hogan’ first year in office. I am optimistic that the Governor’s proposed budget and legislative priorities will help to create a better Maryland for all Marylanders.
It cannot be emphasized too strongly that Governor Hogan inherited a fiscal mess, which he characterized as “much worse than we ever anticipated.” What he faced was a huge structural deficit over the next 18 months. With 80% of state spending legally mandated by formulas, Governor took on the daunting task of balancing the budget with spending cuts instead of borrowing and budget gimmickry. Governor Hogan’s first budget is structurally balanced. For once, the budget does not spend more than we have to spend. And not only that, the budget completely wipes out the $802 million shortfall left by Governor O’Malley.
Last week, I, along with several of my colleagues, had the opportunity to meet with Governor to receive a preview of his budget. Shortly thereafter on January 22nd, Governor Hogan introduced his FY 2015-2016 budget to the General Assembly. Highlights of the budget bill include:
– Aligned general fund spending – $16.4 billion with general fund revenues of $16.4 billion to create a structurally balanced budget.
– No taxes, fees or tolls were increased.
– No agencies were eliminated and no layoffs or furloughs were proposed.
– State agency spending was reduced across-the board by 2% for a savings of $118 million.
– Commits record funding to K-12 education – $6.1 billion with $45.3 million in new support.
– Fully funds school construction at $280 million.
– Raises higher education spending by 1.3% to commit $1.2 billion.
– Commits $1.36 billion to Safety & Correctional Services.
– Commits $390 million in capital funding to environmental and land preservation programs.
– Provides over $1 billion to the Health and Safety Net.
– Expands opportunities for businesses in investments and tax credits.
– Provides $2.9 billion for Department of Transportation projects.
The Governor and his advisors are examining and seeking solutions to one of Maryland’s the most serious problems, a dangerously underfunded State Retirement and Pension System. In 1996, the pension fund was 97% funded. The experts consider 80% funding healthy. Most states today fund their pensions 75%. Maryland’s pension fund is 68% funded. It is underfunded by $18.7 billion – that’s over $2 billion more than the entire $16.4 billion proposed operating budget. It is important to note that to the bond rating houses the extent to which a state funds its pension system is considered an important factor in deciding a state’s credit rating. Currently, Maryland has the highest AAA credit rating. But there is no guarantee it will keep that rating if it continues to underfund its pension system.
Another serious problem plaguing Maryland’s fiscal health is its massive borrowing. In two years, the debt service payment will reach $500 million annually. All too often borrowing provided a quick way to repay funds taken from the Transportation Trust Fund and other pools of money meant for other purposes. Now, that way of doing business has come back to haunt us with annual escalating debt service payments.
After producing a balanced budget that keeps spending safely below revenues, the Governor has to tackle Maryland’s other fiscally debilitating problems: an underfunded pension system and mounting debt service payments.
Other legislative issues I expect to be addressed by Governor Hogan this session include: storm water management and phosphorus management, as well as education, drug and transportation policy.
I will be reporting to you weekly during the session. Please do not hesitate to contact me on these or any other issue of concern to you. As always, I encourage and welcome your input.
Best regards,
J.B. Jennings
This is going to be interesting, but not at all fun: Marty took a two-billion dollar surplus eight years ago and wordsmithed it into a two-billion dollar “structural deficit” just so he could raise taxes and fees, going so far as to call a special session of the General Assembly — at a significant waste of taxpayer money — to indulge his lust for power and thirst for greed. And he thinks he has a chance of being president!? It’s been said elsewhere before: Commanding a bar band is Marty O’Malley’s first best destiny. Anything else is a waste of material. And after eight years of deficit spending, he turns this mess over to Gov. Hogan. God be with you, Governor; you’ll need divine intervention to straighten this out.
“Governor Hogan inherited a fiscal mess”. Well…you probably don’t recall (because it doesn’t fit your political agenda) that Governor O’Malley inherited a fiscal mess from Governor Ehrlich (Including a large structural deficit), AND that Governor O’Malley had to guide our state through the toughest economy since the great depression. Those are facts, NOT opinions. That being said, there were options on how to steer this ship called Maryland through those stormy years, and Governor O’Malley took the high road (not the politically expedient road) when it came to solving our fiscal issues. Also, his (and the Democrats in the legislature) stance, support and ability to get laws passed regarding a myriad of social issues (whether YOU support them or not) was nothing less than stellar! Congratulations on a job well done Martin O’Malley! 🙂 (Now let the bashing continue!) 🙁
Dude, he taxed the freaking rain…
Enough said.
W.T.F,
I used to think people with your persuasion were morons. They are not. They simply have no moral compass whatsoever. Owe-Malley spent $250 million on a healthcare website that never worked and nobody is going to jail. Nuff said.
Problem with our current gov’ner is that he intends to look good by keeping the same confiscatory taxes, fees and the same number of bloated government employees. I guess that is conservative for MD. If our environment is now unfriendly to business, what in the budget really changes that? A few tax incentives does not make up for what the employees suffer from living here, unless all the employees commute from PA – sound familiar.
Marty needs to go back to the Baltimore City Council
Yes, but Brown said no more taxes. So, I guess we are going to suck up all the increases from the previous regime. Something tells me the 2% decrease was some kind of smoke and mirror gimmick. And, we are keeping the same bloated number of employees.
Sen. Jennings has done a great public service by bringing up these issues. I thank him for that.
As for the $3.9 billion for the Dept. of Transportation, I assume this is for mostly for highways, but there are still some serious issues that need to be addressed in transportation funding. How much money is going to infrastructure improvement such as bridges? If not enough money, are we going to be waiting for bridges to collapse before we do anything? In addition there is the issue of transportation infrastructure such as the Purple and Red Lines: Gov. Hogan doesn’t want to fund these so what is going to become of them? I would appreciate if Sen. Jennings would explain further where the recently hiked gasoline taxes come in for funding them, also how much for these would come out of the general fund. There are other projects such as light rail extensions; also what is the status of the Maglev project which has attracted investors for a high speed rail from Washington to Boston. Are there any public monies allocated for development of this project? I would just make one comment, which is that the drop in gasoline prices does present an opportunity maybe to find some funding that would not otherwise be available. But we should be planning for the future just not treading water, especially as the population grows and transportation needs increase.
As for the environment and land preservation at $390 million, this is not a lot of money considering this would be allocated statewide. Harford County eliminated the storm water management fee (the so-called rain tax) and CE Glassman says the funds will be provided out of the general fund but that is a short term fix. Perhaps this move will give the county a chance to craft a truly fair storm water program for the whole county; as for those who complain about this tax, slightly over $1 per month per home is not a lot of money for us to have the bay get clean water, but the plan should be fairer than it was and I hope this will also be required of other jurisdictions.
Gov. Hogan also rescinded the phosphorous farm runoff program only reluctantly instituted by Gov. O’Malley. So what is Gov. Hogan waiting for, the bay to become even more of a sewer than it is now? What about that, Sen. Jennings?
All political rhetoric aside, legislators have some real work to do and better to do it without rancor and theatrics. What about it, Senator?
Sounds like excuses for the new Gov. already.,
Chrissy,
Ding! Ding!
“I would just make one comment, which is that the drop in gasoline prices does present an opportunity maybe to find some funding that would not otherwise be available.”
Translation: the average sot on the street has an extra dime in his pocket…. let’s go pick it! You know, one reads this stuff and it just makes you sick.
Senator Jennings:
If you want to help Gov. Hogan in his pursuit of economic sanity, could you please introduce legislation to repeal the Bridge to Excellence in Public Schools Act, aka The Thornton Plan? This plan mandated the state spend billions of dollars in new money on the state public school system without any revenue source. As an educator you would think I would be in favor of as much educational funding as we could get from the state, but the Thornton commission looked at the state of education in 2002 and decided that if you threw enough money at a problem you could fix it. Although they didn’t have the money to throw at the problem this did not stop them from pushing the state legislature from passing a bill requiring the state to spend $1.2 billion in additional education funds without finding a way to pay for it.
Did I read that one reply correct? Fuel prices are cheaper, so people have extra money. What kind of logic is that? Hit reply and tell me its “common sense.”
I really don’t subscribe to the idea we should just pump more money into something because its “there” and hope for “results.”
If you cut funding, can you really suggest the doom and gloom of the bay? Really? Freak.
Hey guys, the Republicans are in charge and they will have their own chance to screw things up big time. Still waiting for Sen. Jennings to reply, I thought I had made my comments very civilly, but don’t plan for transportation needs in the future and see what happens. You think traffic congestion is bad now? Do nothing and wait for it to get worse. And as for the bay, why worry about that–it’s nothing but a big toilet now. You can get infections by swimming in the bay, let farmers run all their sewage into the bay and then what kind of tourist attraction or source of fishing are you going to have? And we Democrats can sit and snipe from the sidelines. So I’m still waiting for Sen. Jennings to provide a reply. As for taxes, the only reason Glassman is able to pay for the storm water fees is that the property taxes were raised in Harford County. . .
Chrissy,
Another putzy post. Everybody with a room temp IQ knows that when a wider road is built it fills with cars. They slap a development here or a Wallyworld there, and just like Bel Air it is a deathtrap with 55MPH speeds punctuated with traffic lights. And, lining the pockets of developers for rail service doesn’t move people, it moves money out of the pockets of all of us that will never use it.
Oh…. the Bay…. the Bay! Confiscate all the Castles along the shore, level the ground and you have a beginning. Add in a limit to boat size and any further development to Bay proximity while closing the chicken farms and you can get things pretty pristine. Stop pretending this is everybody’s problem.
I’m going to say this again, or over and over. He needs to look at what Colorado has to do this year because of too much taxes on marijuana sales. Yes refunds to most or all tax payers. What is so hard about seeing the marijuana legalization will pull the state out of it’s debt and cover many of the things he has listed. Like money for the schools. That would be a nice slice out of that pie. Fixing our roads and bridges and any other thing he wants to put that money/revenue too. Tell him it’s time to open his eyes and have a change of mind on this matter.
I thought legalized gambling was supposed to be doing all of that already?
If you remember (if you can remember) I wrote a reply to Sen. Jennings budget news and I asked some questions which he so far has not answered. I asked him how much of the increased gas tax was being used for the Red and Purple Lines, how much was coming from the general fund. No reply. Gov. Hogan says we cannot afford those projects and threatens to withdraw funding for those. I thought the increased gasoline tax was to fund those, but is this another case of the Transportation Trust Fund being raided for other things? Gov. Hogan needs to be transparent about this. I gather from some of the comments that any more taxes on gasoline are not welcome, and I agree with that too. I enjoy low gas prices like anyone else. So if our legislators need more money they should state where they would like to have it come from. Just remember too that CE Glassman cancelled the storm water management tax (your rain tax) and he’s going to pay for it out of general revenues and the county still has not given raises to teachers or public safety personnel, long promised but not delivered. So all you wise guys, put on your thinking caps and come out with some good answers because apparently your leader Sen. Jennings is ducking the issues. You need to come up with some good answers not just snide and nasty remarks.