MD Governor's Budget Proposal, FY2012
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Transcript of MD Governor's Budget Proposal, FY2012
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Governor Martin OMalley
January 21, 2011
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Maint a in ing Fisc a l Responsib i l i t y
Maryland remains 1 of only 8 states with a Triple A bondrating certified by all three rating agencies.
During the first term of the OMalley-Brown Administration,the State adopted $5.6 billion of spending reductions andabolished almost 4,200 positions.
With the proposed FY12 budget, total spending reductionsrise to $6.6 billion and position abolishments exceed4,700.
Despite fiscal pressures, Maryland has preserved itsRainy Day Fund.
Marylands fiscal challenges are the result of the national
recession which dramatically reduced anticipatedrevenues.
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Resolved an Inher i t ed St ruc t ura l Def ic i tDur ing t he 2007 Spec ia l Session
The inherited structural budget deficit approached
$1.7 Billion Special Session Actions
Reduced spending by $550 M in FY09
Increased General Fund revenues by more than$800M in FY09
Approved new recurring revenue source from VideoLottery Terminals (VLTs)
Erased structural deficit by FY12
Projected FY12 Cash Surplus of $290M
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Resolved Inher i t ed Budget Chal lenge
Dur ing 2007 Spec ia l Session
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$310 $236 $280$550 $441
$75
$348
$94
$1,245
$285$494
$232
$954$1,057
$0
$1,000
$2,000
$3,000
$4,000
$5,000
$6,000
$7,000
Jan
07
Apr
07
July
07
BPW
Nov
07
Apr
08
Jun
08
BPW
Oct
08
BPW
Mar
09
BPW
Apr
09
July
09
BPW
Aug
09
BPW
Nov
09
BPW
Apr
10
Jan
11
Budget Actions
$in
Millions
Cumulative Reductions
During O'Malley-Brown
Administration
A St eady Diet o f Cut s
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Balanc ing Budget w i t hou t
Rec overy Dol lars
Temporary federal Recovery dollars fund $1.4B of
Medicaid, public safety, and K-12 education expensesin FY11.
No federal Recovery dollars are available to support
ongoing expenses in FY12. Due to the OMalley-Brown Administrations judicious
financial management, the State has preserved almost
$700M of fund balance to ease the transition away fromRecovery dollars in FY12.
The availability of fund balance and other transfers
allows growth in General Fund spending in FY12 tooffset loss of federal recovery dollars.
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Tough Choic es t o Move
Mary land Forw ard
Balance the budget entirely with cuts
Close a $1.4B General Fund budget shortfall
Cut General Fund spending by nearly $1B
Reduce the structural deficit by $730M (37%)
Make the State pension system moresustainable
Erase almost half the unfunded retiree health
liability
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FY2012 Budget Reduc t ions$ in mi l l ions
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Reduc ing t he Size of Governm ent :
St at e Em ployees Share of Sac r i f ic e More than 4,200 State positions have been eliminated during
the OMalley-Brown Administration.
Over the last three years, employees have absorbed more than$580M of reductions to salaries and benefits
Furloughs & Temporary Salary Reductions in FY09 FY11
No COLAs or Step Increases in FY10 & FY11
No Deferred Compensation Match
Voluntary Separation Program
Almost 1,400 applicants
FY12 budget assumes about 1,000 applications accepted/positions abolished $40 million of recurring savings beginning in FY12
There are fewer executive branch employees today than inFY07
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53,364
51,058
48,000
49,000
50,000
51,000
52,000
53,000
54,000
FY 2007 FY 2012 Allow.
Ex ec ut ive Branc h Em ployees
FY 2007 - FY2012 Com par ison
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Ex ec ut ive Branch Pos i t ions Have Dec l inedUnder OMal ley-Brow n Adm in is t ra t ion
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There are few er government em ployees per
Mary land res ident t han s ince FY1974
Executive Branch Employees per 1,000 residents
1
0.9
11.8
14.1
14.3
14.6
14.7
14.7
14.7
14.6 1
4.2
15.3
14.6
14.5
14.9
14.9
15.0
15.1
15.4
14.7
14.0
13
.5
13.
7
13
.5
1
3.4
13.2
13.6
13.8
14.3
13.8
13.
7 13.3
13.2
1
3.5
13.
7
13.
7 13.1
1
3.4
13.1
13.1
FY2012
13.0
FY1974
12.3
10
11
12
13
14
15
16
1972
1974
1976
1978
1980
1982
1984
1986
1988
1990
1992
1994
1996
1998
2000
2002
2004
2006
2008
2010
2012
employeesper1,0
00residents
Employees per 1,000 residents
Lowest ratio of State employees to state residents since FY1974
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St ream l in ing Governm ent
Maryland House of Correction
Four State Hospitals
Carter Center, Rosewood, Upper Shore, RICA So. MD
Welcome Centers (8)
DBED Foreign Offices (3)
New Actions
Consolidations ($4M) Higher Education Commission with State
Department of Education Consolidate Certain Programs with Department of
Natural Resources Transportation Police Forces Consolidate Policing Most State Facilities with
General Services Police Consolidate Highway Maintenance Facilities
Voluntary Separation Program 1,000 position
abolitions expected ($40M) Close Brandenburg Center ($2.7M)
Discontinue High School Civics Assessment ($1.9M)
Discontinue Tolbert Scholarships ($200,000)
Prior Actions
Consolidated State Print Shops ($500k)
Centralized Classification Unit ($396k)
Applied Stricter Standard for Payment ofEmergency Room Claims & Enhanced Audits ofOut-of-State Hospitals ($5.5 M)
Eliminated DNR Helicopter Unit ($372k)
Consolidated Correctional Pre-Release Facilities($4.7 M)
Eliminated Grant for Wine Promotion &
Destination Imagination Downsized MHEC ($0.7M)
Eliminated 14 DJS management positions ($1M)
Reduced OT at DPSCS ($4M)
Improved Management of Accident Leave ($3M)
Annapolis State Police Barrack
OFarrell Center
Animal Health Laboratories (3)
Dismas House
Upper Shore Planning Office
Facility Closures During OMalley-Brown Administration
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87% of Genera l Fund Dol lars Al loc at ed t o
Educat ion , Hea l th , and Publ ic Safet y
39%Elementary &
SecondaryEducation
13%Other
27%Health
10%Public
Safety
11%Higher
Education
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$0.008 B
$1.017 B
$0.000
$0.200
$0.400
$0.600
$0.800
$1.000
$1.200
Everything Else K-12 Education
$inBillion
General Fund Spending Grow t h
FY 2007 t o FY 2012
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FY 12 Budget Plan Im proves St ruc t ura l
Out look by 37% in FY 12
-$1,979 -$2,001-$1,878 -$1,876
-$1,177 -$1,105-$1,040
-$1,114
-2,500
-2,000
-1,500
-1,000
-500
0
FY 2012 FY 2013 FY 2014 FY 2015
Projected Structural Gap Gap After Proposed FY 12 Actions
$inMillions
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How t he $1.4 B Budget Gap w as Closed
Transfers, $285
Spending
Reductions, $949
Federal Tax
Changes, $97
Previously
Unbudgeted
Revenues/Other,
$143
$0
$200
$400
$600
$800
$1,000
$1,200
$1,400
$1,600
$inMillions
Budget Gap
= $1,354
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FY 2012 Budget Balanc ing Plan
FY 2012 Projected Shortfall (millions) $-1,354
SolutionsBudget Reductions General Funds 949Redirection of Existing Revenues 285 Fund Capital Eligible Costs w/Bonds Rather than Cash ($191M) Divert Revenues from Transportation Trust Fund and Replace with Bonds ($60M) Fund Balance Transfers and Diversions ($34M)
Revenue Additions/Other 143 Federal Retiree Drug Subsidy FY 11 & FY 12 ($47M) Level Fund Payments to Businesses for Collecting Sales Tax ($18M) Tax Compliance No Renewal of Vehicle Registration Until Tax Liabilities
Addressed ($20M)
Assess Bad Driver ($5M) and Parole & Probation Supervision ($4M) Surcharges Recoveries ($10M), Interest Earnings ($11M), Other ($17M) Eliminate Preferential Treatment for Maryland Mined Coal/IWIF ($11M)
Net Impact of Federal Tax Cut & Pay Freeze on Revenue 97
Closing FY 2012 Fund Balance $120
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Budget H igh l igh t s
Maintains record operating funding of $5.7B for K-12 education.
InvestMaryland to grow the states knowledge-based industries by
stimulating up to $100M in venture capital funds, creating thousands of jobs.
$3.1B capital budget State construction spending will support nearly15,000 construction jobs in FY12.
$25M for Bay 2010 Fund; a 25% increase over FY11 funding.
Second consecutive year of a modest 3% increase for in-state tuition atfour-year public colleges and universities after a four-year tuition freeze.
USM tuition rates have declined from 6th highest in nation to an estimated 25th in FY 2012.
$5M Making College Affordable Fund allocation to community colleges thathold tuition growth to 3% or less in FY12.
Fund health care coverage for 916,000 low-income children and adults.
Nearly 310,000 more people than were covered when Governor took office.
No furloughs and a $750 bonus for State employees.
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Education - $488.5M
$250M for Public SchoolConstruction
$151.3M for Public 4-YearCampuses
$63M for 20 CommunityCollege projects
Health & Environment - $493.1M
$247.2M for Bay Restoration projects
$162M for improvements to localwater systems and wastewatertreatment plants
$41.7M for Land PreservationPrograms
$38.2M for Health-Related Projects,including funding for hospitals andcommunity health facilities
$1.4B for St at e Fac i l i t ies and Capi t a l Program s
FY12 Capi t a l Budget
= $3.1 B i l l ion
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FY12 Capi t a l Budget$1.7B for Transport a t ion projec t s
Transit Improvements - $639M
$34.0M for the Red Line Transitwayengineering
$30.0M for the Purple Line Transitwayengineering
$12.4M for engineering the CorridorCities Transitway
$47.4M for various MARCenhancements
$36.1M for improvements at the SilverSpring Transit Center
$10.3M for engineering the Takoma/Langley Park Transit Center
$28.5M for bus replacements
Roadway Improvements - $815.9M
$14.3M for BRAC intersections aroundthe National Naval Medical Center
$25.3M for BRAC intersections near FortMeade
$10.6M for the interchange at US 40 andMD 715 around Aberdeen ProvingGrounds
$11.1M for I-695 at Charles Street
$8.3M to replace the I-695 bridge overMD 26
$16.4M for I-70 (Phase 2D)
$6.4M to upgrade I-81/ I-70 interchange
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A Foc us on J obs & t he
New Ec onom y $3.5B included across operating/capital budget focused on jobs
and job creation.
InvestMaryland to grow the states knowledge-based industries bystimulating up to $100M in venture capital funds, creatingthousands of jobs.
$15M for the Maryland Economic Development Assistance Fund to
help stimulate business growth and economic development a25% increase.
$12.4M for stem cell research, bringing five-year total under theOMalley-Brown Administration to $76.2M.
$10M in Sustainable Communities Tax Credits to promote urbanredevelopment and create jobs.
$8M for tax credits to spur investment in biotechnology companies.
$3.8M for the Maryland Biotechnology Center.
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A Foc us on Sk i l ls and Educ at ion
Second year of record operating funding forMarylands top ranked Public Schools - $5.7B;
bringing five-year total to $27.4B
$4.9B direct aid to local school systems for FY12 including$128.4M for GCEI 3rd consecutive year of full funding
$88M from four-year $250M Race to Top Grant to reformschools and close achievement gap
$250M for School Construction, bringing five-year
total to more than $1.5B Five consecutive years meeting or exceeding Kopp Commission
recommendations
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Preserv ing Rec ord K -12 Educ at ion Funding
K-12 Operating Education Aid
$3.1
$5.7
$2.0
$3.0
$4.0
$5.0
$6.0
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
Billions
$4.5
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FY 2007
$4.5 Billion
FY 2012
$5.7 Billion
3
3.5
4
4.5
5
5.5
6
$
in
Billions
Preserv ing Our Rec ord Level Invest m ent in
Mary land s Top Rank ed Publ ic Sc hools
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$246
$117 $128
$252
$323
$402
$340
$267 $264$250
0
50
100
150
200
250
300
350
400
450
FY03 FY04 FY05 FY06 FY07 FY08 FY09 FY10 FY11Proposed
FY12
$in
Millions
$250M Kopp
Commission
RecommendedThreshold
OMal ley-Brow n 5-Year Tot al fo r Publ i c
Sc hool Const ruc t ion Ex c eeds $1.5 B i l l ion
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A Foc us on Higher Educ at ion
$5.3B for public higher education
$9M to keep tuition growth at 3% at USM and Morgan State
University, only the second increase in six years.
Enrollment at State colleges and universities estimated at 130,255 inFY12 13% increase since FY07.
$263.1M for the local community colleges Enrollment at local community colleges estimated at 109,237 in FY12
26% increase since FY07.
$94.2M for Baltimore City Community College
$5M to promote tuition affordability at the community colleges.
$1M to establish Complete College Maryland, a competitive
grant program to support best practices that increase degreecompletion.
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Mak ing Col lege Af fordable for Mary landers
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A St ronger Healt h ier Fut ure
$7B to provide comprehensive health care coverage to
more than 900,000 low-income, disabled, and chronicallyill children and adults.
$17M to expand placements for people withdevelopmental disabilities.
$8M for to raise payment rates for providers of services
to developmentally disabled.
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Ex panding Ac c ess t o Healt h Care by More
t han 300 ,000 Mary landers Over Five Years
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Medic aid Spending Has More t han Doubled
Sinc e FY 2003
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Sm art , Green , and Grow ing
$25M for the Chesapeake Bay 2010 Trust Fund, an increase of25% over FY 2011.
Maintain full funding for Program Open Space (POS).
$16.2M for the cover crop program, which experienced recordlevels of participation in FY11.
$7M from Strategic Energy Investment Funds for cleanrenewable energy grants and $1M to support Climate Changeprograms
$6.1M for weatherization grants to improve the energyperformance of nearly 4,300 low income homes.
$4.7M for energy efficiency programs, primarily to assist lowand moderate income Maryland residents.
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A Safer , More Sec ure Maryland
Total public safety budget of nearly $2.18B.
$108M for Violence Prevention Initiatives targeting more than 2,000 of
the States most violent offenders.
Funding for a trooper class of 80 new recruits.
$45.4M in police aid to local governments and municipalities.
$20.3M in local law enforcement grants to target domestic violence,substance abuse, and gun trafficking.
$10M for public safety wireless communication system
$1.7M for continued implementation of the Computer Aided Dispatchand Records Management System to assist law enforcement agenciesand emergency responders with real-time information. Brings totalinvestment to $11.6M.
$562,000 for the Offender Case Management System, bringing the total
allocated to $14.8M. System tracks inmates from initial bookingthrough community release.
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Tough Dec is ions t o Ba lanc e
t he Budget$949 Million of General Fund Reductions
Medicaid Payments to Hospitals ($264M)
Federal Fund Maximization ($139M) Fund K-12 Costs w/FY 11 savings from Education Jobs Grant
Medicaid Revenue Maximization Contract Retirement Reform Savings ($104M)
Level Fund K-12 Education Aid ($94M)
Public Higher Education Costs ($55M)
Other Local Aid Reductions ($52M)
Voluntary Separation Program ($40M)
Employee/Retiree Rx Costs ($28M)