Maryland governor outlines $1.45 billion in budget cuts to grapple with economic downturn

State forecasters say as much as $1.2 billion of state revenue could evaporate amid the economic crisis triggered by the pandemic. To mitigate that, Hogan outlined $1.45 billion worth of cuts to Maryland's $19.5 billion general fund, part of the $47.9 billion budget that takes effect Wednesday.

He left it up to the Democratic-majority General Assembly to implement most of the cuts when it reconvenes next year. But Hogan, a Republican, asked the Board of Public Works to implement $672 million of his plan immediately. The board, which Hogan chairs, oversees all state contracts and budget cuts when the legislature is not in session.

Among other actions, the cuts would erase pay raises and extra pension contributions for state employees, trim rebates for child care, reduce grants for state universities and community colleges by $186.8 million and pare back spending on the state's opioid-crisis response.

A vote by the three-member panel is scheduled for Wednesday. The office of Comptroller Peter Franchot, a Democrat who sits on the board along with Treasurer Nancy Kopp, also a Democrat, said the $672 million proposal is the largest single-day set of cuts the board has been asked to make during Franchot's 13-year tenure. 

"These are tough times, and tough decisions need to be made," said Hogan spokesman Michael Ricci, adding that the state government could be forced to lay off 25% of its workforce to close the budget gap. 

Maryland union and advocacy group leaders described Hogan's overall $1.45 billion plan as draconian. 

"This is going to be devastating to people's pocketbooks and the communities that they live in and contribute to," said Patrick Moran, president of AFSCME Maryland Council 3, the largest union representing Maryland public employees. 

Moran noted that many union members have continued to work during the pandemic, making the budget cuts akin to "cutting the fire department in the midst of a wildfire."

State and local governments across the country have seen revenue drop from shutdowns designed to slow the spread of the virus, while racking up huge bills responding to the pandemic. Many have implemented furloughs of public workers and suspended infrastructure projects. Some are now seeking tax increases to avoid deeper cuts. 

In Virginia, Democratic Gov. Ralph Northam has said he will call a special session, likely in August, to adjust the state budget to reflect the coronavirus crisis. This week, the District of Columbia Council is poring through a proposal by Mayor Muriel Bowser, a Democrat, to cut $1.5 billion in city spending over two fiscal years. 

In Maryland, employee and issue-advocacy group leaders said Hogan's plan would decrease funding to some agencies that need the most financial help as a result of the pandemic. The cuts that will be voted on Wednesday include $110 million to education, mostly to teacher pensions. But it also includes $12.4 million to poorer school districts and $25 million that covers some child-care subsidies and part of the state's Healthy Schools Facilities Fund, which repairs public school buildings that have problems such as mold and faulty plumbing or heating. 

Cheryl Bost, the president of the Maryland State Education Association, said the proposed reductions were "unconscionable" and could endanger the health of teachers and students.

"Crisis distance learning this spring has deepened inequities and achievement gaps among our students - and the governor's cuts would only make them far worse," she said in a statement.

Meanwhile, Hogan announced Monday that he would spend $210 million of the state's federal Cares Act distribution to help local school systems provide tutoring for at-risk students, plus laptops and other devices to accommodate students during distance learning. Ricci said the Cares Act money can only be used for pandemic-related expenses, not for the expenses the governor suggested cutting.

Hogan, in his role as chair of the National Governor's Association, has lobbied Congress and the White House to include a $500 billion rescue package for states in the next round of federal coronavirus funding. Governors have asked for much of that cash to be unrestricted, enabling them to stave off cuts such as those Maryland is weighing.

As of Monday afternoon, 21 advocacy groups representing education, environment and workers' rights signed a joint statement arguing that Hogan's proposed cuts "would hurt public schools, colleges, programs serving people with disabilities, efforts to mitigate the climate crisis, and behavioral health programs."

"We can't afford to further hurt people during a public health crisis and inhibit our economic recovery," the statement said.

The groups encouraged Hogan to keep lobbying for federal help, as well as "consider additional revenue options" such as taxes.

Hogan's plans include selling a Maryland State Police helicopter and eliminating the entire aviation program within the Natural Resources Police, which Hogan revived in 2016.

The program had been eliminated in 2009, during the administration of then-Gov. Martin O'Malley, a Democrat, amid cost-cutting to grapple with the Great Recession. During that fiscal year, the Board of Public Works cut $956 million in state spending in three tranches spread out over four months, according to data from Franchot's office.