ANNAPOLIS — The House of Delegates today begins debate on a state budget proposal that reforms pensions for state employees, restores a large chunk of cuts to K-12 education funding and raises several fees to generate tens of millions in new revenue to help shore up a dedicated transportation fund.
The House Appropriations Committee last week approved a series of budget cuts and fee increases to Gov. Martin O’Malley’s budget proposal.
Lawmakers will debate a series of amendments to the budget today before giving the bill preliminary approval. A final vote on the budget is expected Friday.
The budget approved by the Appropriations Committee would increase several fees to generate more than $60 million in new revenue. The bulk –about $50 million — will come from a proposed increase to the titling fee for vehicle purchases, which would double from $50 to $100. Another $2 million to $3 million in new revenue would come from doubling the fee for vanity license plates from $25 to $50.
The money generated from those two fees will go toward the state’s Transportation Trust Fund, which O’Malley is planning to tap to the tune of $100 million this session to plug budget holes.
“This is designed to provide some help and relief for transportation instead of doing some sort of gasoline tax,” said Delegate John Bohanan, a St. Mary’s Democrat and key member of the Appropriations Committee. “We’ve got to come up with some funds for transportation.”
The budget approved by the committee also increases a fee Marylanders pay to file property tax records from $20 to $40. That change is estimated to raise about $10 million, Bohanan said.
House Republicans fired back at the House spending plan Wednesday, saying the budget does little to address long-term debt and spending. The proposed fees, said House Minority Leader Anthony O’Donnell, amount to the government “taking money out of the private sector.”
“We don’t have a revenue problem. These are revenue mechanisms,” said O’Donnell, R-Calvert. “We have a spending problem and this budget doesn’t address our over-spending.”
House Republicans are readying amendments to present today. O’Donnell did not elaborate on specifics but said the amendments will “highlight greater opportunities to reduce spending in Maryland.”
House GOP leaders presented a proposal earlier this month that outlined $621 million in additional spending cuts on top of the nearly $1 billion in reductions O’Malley proposed in his budget.
O’Malley’s budget proposal would cut the state’s structural deficit, which is estimated between $1.7 billion and $1.9 billion, by $730 million. The House budget goes a bit further and seeks to slash the structural deficit by $803 million.
That’s not enough, Republicans say, and the GOP proposal presented last month would eliminate about two-thirds of the deficit in fiscal 2012 and the rest by fiscal 2013.
“The Democrat plan is silent with regard to when the structural deficit will be completely fixed,” O’Donnell said. This budget “doesn’t solve our problem and it kicks the can down the road.”
Bohanan, the chair of the Education and Economic Development Subcommittee, said Democrats refused to cut deeper because any further reductions could “decimate” education funding. The committee voted last week to restore about $58 million of the $94 million O’Malley cut in funding for K-12.
“That’s the one priority we continue to hold and maintain,” Bohanan said.
The House gets the first shot at the budget this year. Bohanan said the Senate is “in sync” with the majority of the House plan, but the two chambers will likely have to reconcile differences on pension reform.
The House is proposing to change O’Malley’s pension reform plan by requiring state employees to pay 7 percent of their salaries instead of 5 percent into their pension plans. O’Malley’s proposal would have given state employees the option to choose between 7 percent and 5 percent contributions.
The Senate on the other hand could move toward a shift to have local governments help pay for pensions. The House last year rejected a “wholesale shift,” Bohanan said.
“The main thing is going to be pensions,” he said. “We’ll be in sync on education funding, but pension reform will be different.”
By Capital News Service’s David Saleh Rauf.