Hogan Budget Includes $400M in Tax Cuts

ANNAPOLIS, MD – With a $750 million budget surplus, Maryland legislators can afford to cut taxes for small businesses, retirees and families, says Gov. Larry Hogan.

On Thursday, Hogan gave a preview of the roughly $17 billion budget he will propose to the Maryland legislature this month.

Elected two years ago on a pledge to cut the tax burden and rein in government spending, Hogan last year didn’t release $68 million lawmakers had earmarked for school districts, says The Baltimore Sun. As a response, the Democratic-majority legislature passed a bill requiring governors to spend education money.

This year, Hogan proposes adopting $400 million in tax and fee cuts, reports NBC Washington, as the state pays down debt he said was left by the Martin O’Malley administration.

“We’re picking up the bar tab they left,” Hogan said at a press conference.

The governor says about 1 million residents and 300,000 businesses would have their fees and taxes cut over the next five years if his budget proposal is enacted.

The Maryland General Assembly begins its session on Jan. 13.

Democrats question how Hogan can pay mandates, fully fund education, spend $700 million to renovate crumbling Baltimore neighborhoods and cut taxes.

Maryland Democratic Party Executive Director Pat Murray criticized the budget proposal in a statement to the Baltimore Business Journal.

“Last year, Governor Hogan made deep cuts to public education, the state workforce, and services for the developmentally disabled, and raised college tuition,” Murray said. “‘Mandate relief’ is Hogan-speak for ‘larger class sizes’ or ‘higher tuition bills.’ In the absence of a real plan that the public can consider, the governor is just making noise.”

Hogan’s office notes these highlights of the proposed budget:

• $17.1 billion operating budget
• $1.1 billion Rainy Day Fund balance
• About $440 million cash balance going into FY 2018
• Fully funds every General Assembly statutory spending obligation
• Delivers about $400 million in tax and fee relief to an estimated 1 million Maryland citizens and to over 300,000 small businesses over the next five years
• Fully funds 100 percent of education spending increases – based on the formulas set by the legislature
• Fully funds the Geographic Cost of Education Index
• $6.3 billion for K-12 education, an increase of $140 million
• $314 million for new school construction projects
• $231 million in highway user revenues – an increase of 18.9%
• $7.3 billion in aid to local governments – an increase of 3.3%
• Sets capital debt limit at $995 million – below the level proposed by the legislature
• $35 million to address the long-standing deficiencies accrued by the previous administration