ANNAPOLIS, Md. (AP) — A Maryland budget plan restoring education funds and state employee pay that had been scaled back in Republican Gov. Larry Hogan’s budget proposal advanced Wednesday in the House of Delegates.
The House, which is controlled by Democrats, gave initial approval to legislation containing the state’s $40.7 billion spending plan and a companion bill needed to balance the budget Wednesday evening.
“We restored our priorities: education, taking care of our state workers and critical, critical social and health needs that our Maryland citizens deserve,” said Del. Maggie McIntosh, a Baltimore Democrat who chairs the House Appropriations Committee. “We did this without raising taxes.”
Changes made by the House mean the legislation won’t eliminate Maryland’s long-running structural deficit, as Hogan’s budget did. Instead, it resolves about 74 percent of the state’s structural imbalance. That means while the budget lawmakers are now working on for the next fiscal year would be balanced, a shortfall will return when lawmakers come back next year, because the state is slated to spend more revenue than it is projected to collect.
Part of the House budget plan includes changing the state’s pension funding system and paying about $70 million less into it.
In 2011, lawmakers approved requiring greater contributions from state employees in an effort to make the pension system 80 percent funded by 2023. As part of the reforms to the system, which is now funded at about 68 percent, the state has been making payments above the required annual amount to move closer to 80 percent pension funding. Also, lawmakers initially planned to move out of the corridor pension system and into a better-regarded actuarial system in 10 years. However, state budget analysts recommended making the switch now, due to strong returns in the market.
By making the switch, supporters say the state can still meet its goal by only paying about half of the planned $150 million pension payment above requirements this year, freeing up about $70 million for other purposes.
“It says that we’re going to get to 80 percent funding by 2023, and it keeps the folks in this pension in the defined benefit plan, so we are asserting that commitment, reasserting it and keeping it with this amendment,” said Del. Ben Barnes, D-Prince George’s.
But opponents said all of the money should still go to shore up the pension system. The state ended up tapping the extra pension payment last year, too, to help balance the budget.
“Everyone else has kept their end of the deal. They’ve had to, and we’re not, and I think that’s been my problem with the budget for the last few years is we keep kicking our promise down the road,” said Del. Susan Krebs, R-Carroll.
The pension change amendment passed 87-52.
Hogan has said he is willing to negotiate with lawmakers on education funding and state employee pay, but he has expressed concern about diverting contributions away from the pension system.
The House also has eliminated 100 vacant state jobs to save money: 50 from corrections and 50 from the state police. A vote on the bills is expected Thursday. Then, the measures will go to the Senate.
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