ANNAPOLIS – The Maryland House of Delegates on Wednesday began grappling with a state budget that would close a $1.6 billion shortfall through a series of cuts and fee increases more extensive than proposed by Gov. Martin O’Malley. The House took the first crack at a funding plan that supporters say would make a dent in runaway pension liabilities and get the state’s fiscal house in order — without raising taxes.
The budget plan includes roughly $97 million in additional cuts to O’Malley’s budget, as well as a series of fee increases and reductions in employee benefits to pay for $58 million in education spending above what the governor proposed.
Del. Norman Conway, D-Wicomico, chairman of the House Appropriations Committee, called the budget both “fiscally prudent and socially responsible.”
“We protected educational programs and jobs, maintained a defined benefit pensions systems,” he said. “Safeguards have been put into place to protect the transportation trust fund.”
But Republicans countered that the funding blueprint makes only cosmetic changes, pointing to cash-strapped statehouses across the country adopting more extensive cuts.
A major area of contention in final weeks of the General Assembly will be how to tackle the state’s massive unfunded pension liability. Many House lawmakers are pushing a plan that would require employees to pay 7 percent into their pension plans — mirroring a proposal by O’Malley — and at least one major public employee union endorsed much of the blueprint Wednesday.
The Maryland State Education Association said it would accept the contribution rate but wanted a more generous pension multiplier than proposed by the governor and lawmakers.
Maryland is facing about $35 billion in unfunded pension and health benefit liabilities.
To help close the gap, Democratic lawmakers are pushing for a series of fee increases. For example, the car title fee for new vehicles would double from $50 to $100 and the cost of vanity license plates would double to $50.
O’Malley submitted a budget to lawmakers without any tax increases, a move that even some in his own party dismissed as a failure of leadership in light of plummeting revenue. The governor said he would be willing to sign off on tax increases passed by the legislature.
The House is expected to vote on the budget by the end of the week, then send the bill to the Senate.
