O'Malley Proposes State Budget

Governor Martin O’Malley unveiled what he called a “jobs” budget proposal today, claiming a balanced blend of tight-fisted cuts and 

judicious spending on state priorities.  Critics say he couldn’t have gotten there without tax increases. WYPR’s Karen Hosler reports.

Karen Hosler

At the start of his seventh year in office, Governor Martin  O’Malley submitted a state budget yesterday that nearly closes a long-time gap between income and out-go that he blamed on overspending by his predecessors and revenue lost to the Great Recession.

Governor Martin O'Malley

These have been challenging years to say the least; the biggest economic downturn since the great Depression. And yet the people of our state have continued to move forward.  And they expect just as every family is doing more with less, they expect their state government to do more with less.

Hosler

The proposed budget would reduce the so-called structural deficit—which once totaled nearly $2 billion.  The new gap would be $166 million. Democrats gave the spending plan good reviews, but Senate Republican leader E.J. Pipkin dismissed O’Malley’s claim of careful budget management.  He said the books are coming into balance because the governor has raised nearly $2 billion in sales, income and other taxes.

State Senator E.J. Pipkin

If you’ve got a $2 billion structural budget deficit and you raise taxes by $2 billion and spending goes up, what have you really accomplished? Is it really that hard to close a structural deficit by taxing people to death?

Hosler

O’Malley’s new budget proposal represents a 3.3 percent increase over the current year.  The governor has set some of that money aside in the state’s rainy day fund as a hedge against the disaster that could occur if congressional Republicans fail to resolve their bitter budget dispute with President Obama.

O'Malley

The reason for doing that is to safeguard against, you know, the hari-kari Congress down the street and what they might do to our economy because of ideology. 

Hosler

Thanks to other new spending, O’Malley said his budget would create 43,000 jobs in construction alone, mostly building schools and transportation projects.  Yet he sidestepped the issue of whether he expects to sponsor an increase in the gas or sales tax to finance the additional transportation work, saying he plans to consult with General Assembly leaders. 

O'Malley

There will be discussions about the fact that….we suffer as a state from our chronic under-investment in transportation.

Hosler

Senator Pipkin scoffed at that analysis.

Pipkin

The challenge of it is, it’s not the tax amount. We take in $3.8 billion every year into the Transportation Trust Fund.  It’s that the governor won’t stop spending.

Hosler

On another controversial topic, the governor firmly injected himself:  proposing $1.5 million for a study of standards for hydraulic fracturing—or fracking—in Western Maryland. Some members of the legislature are trying to ban fracking in the state, but O’Malley said the Chesapeake Bay is already hurt by natural gas mining nearby.

O'Malley

So, we can pretend that fracking isn’t happening in Pennsylvania and West Virginia. We could content ourselves by saying that without a standard it won’t happen here.  But I believe the more responsible course is for Maryland to be a leader in protecting the health of the bay. 

Hosler

On that point, Sen. Pipkin contended that the governor wasn’t moving fast enough to secure the economic and environmental benefits he said Maryland could gain from moving from coal to cleaner natural gas.

Pipkin

We don’t need any more study, we need action.

Hosler

Of course, there’s always the chance we may get neither.

I’m Karen Hosler, reporting in Annapolis, for 88.1 WYPR