Center Maryland: Governor Hogan’s role as chief evaluator and reformer

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Editor’s note: The following commentary appeared on CenterMaryland.org on January 23.

By Donald C. Fry

To say that the first two days of Governor Larry Hogan’s administration were very busy would be an understatement.

On Wednesday, January 21, Hogan was inaugurated, pledging to dedicate himself to creating “an environment of trust and cooperation” with state lawmakers, reject “wedge politics” under the State House dome and to enable businesses in Maryland to compete “without undue burdens.”

The next morning, less than 11 hours after Inauguration Day evening parties closed down, Hogan met with legislative leaders to outline his proposed $16.4 billion FY 2016 operating budget and did the same for reporters at an early afternoon news conference.

The proposed budget “puts Maryland on sound financial footing without raising taxes or fees and without eliminating agencies or introducing furloughs or layoffs,” according to a news release issued by the governor’s press office.

“But this is just a start,” Hogan said in the news release. “We have much more to do in the days and weeks ahead.”

Among other things, it proposes to eliminate the state’s entire $755 million structural operating deficit in one year – accelerating the reduction timetable recommended by the state Spending Affordability Committee – and to match general fund spending with revenues in succeeding years.

Cost-saving measures include a proposed 2 percent reduction in spending by state agencies.

Following are other thumbnail highlights of Hogan’s budget summary:

  • General fund spending. Proposed overall general fund spending would increase 2.4 percent, well under the currently-estimated 3.5 percent growth in revenues to the fund in FY 2016. Excluding appropriations to the reserve fund, pay-as-you-go capital spending and debt service, state general fund spending growth would be limited to 0.5 percent.
  • Expanding opportunities for business. Hogan’s budget proposes $12 million in biotechnology tax credits, $9.4 million to develop stem cell technology and $2.5 million in investments and tax credits toward promoting cyber security research.  It also includes $16.9 million for job centers across the state to provide free assistance to job seekers, including training referrals, career counseling and job listings.
  • Transportation. The proposed FY 2016 capital budget for transportation totals $2.9 billion and includes funding during the next fiscal year for the Red Line and Purple Lines.  The governor, however, indicated that he has not made a decision regarding longer-term funding for these two light rail projects that are strongly supported by business communities in Baltimore and the D.C. suburbs.
  • Education. The proposed budget makes some “contingent reductions” in state aid to public schools, but nevertheless increases overall aid for FY 2016 to $6.1 billion, a record high spending level, and provides $290 million for public school capital projects. It also includes $1.2 billion in state funding for the University System of Maryland – a 1.3 percent increase.
  • Health and safety net. It proposes to allocate $48 million for improvements to the state’s health infrastructure, including $30 million toward the development of a new regional medical center in Prince George’s County. It would also provide $1.02 billion for the Developmental Disabilities Administration, an 8 percent increase.
  • Environment. $390 million is allocated in capital funding for environmental programs and land preservation.
  • Public safety and correctional services. Hogan’s budget proposes$1.36 billion in funding for the state’s Department of Public Safety and Correctional Services.

Specific details on the Hogan administration budget are expected to be distributed in the next few days and will be closely reviewed by lawmakers and public policy advocates.

Release of the budget information followed an Inauguration Day in which Hogan vowed to govern in a spirit of true bipartisanship, to “improve the tone in Annapolis” and to cultivate a legislative process in which all parties act “with mutual respect” and nurture a “middle temperament.”

“It isn’t about politics,” Hogan said. “It’s about citizenship and the ability to understand the difference.”

There are some in Annapolis who feel that the new Governor, once he gets to see Maryland’s government from the inside, will recognize the value of the status quo when it comes to fiscal policies and the breadth of services that they deliver.

But business leaders make a valid point that Maryland’s policies that have accumulated over decades – particularly regarding the impact of the state’s current tax structure and regulatory climate – could benefit from reform.

Meanwhile, voters strongly voiced a preference for a new approach and clearly elected Hogan to be an evaluator and a reformer.  The new governor has emphatically promised them a fresh approach and a “new spirit of bipartisan cooperation.”

In the same week in which Marylanders are being urged to take a weekend Polar Bear Plunge into the Chesapeake Bay for charity, Governor Hogan is calling on state lawmakers to join him and take a plunge of bipartisanship in Annapolis during the next 90 days.

Whether the legislative waters in Annapolis will be warmer for the governor than the Bay will be for Polar Plunge swimmers remains to be seen.  Hogan’s projected intention is to take a sincere, straightforward approach to addressing Maryland’s fiscal challenges and to strengthening our state’s competitiveness for economic growth and job creation.

Given that Marylanders elected Hogan to do just that – and that virtually every member of the General Assembly made a “jobs, jobs, jobs” pledge to voters during their campaigns – it would be in the best interest of their constituents for lawmakers, regardless of party, to at least give the new governor the benefit of the doubt.

Of course, there will be differences of opinion on what constitutes a fresh, beneficial approach to governing in Maryland. But resolutions to those differences need to be worked out in good faith. As Thomas Jefferson once noted: “Every difference of opinion is not a difference of principle.”

The tendency toward partisan hardball in today’s lawmaking venues aside, all Marylanders could benefit if all lawmakers on both sides of the aisle in Annapolis aim for constructive, intellectually provocative dialogue about addressing Maryland’s challenges rather than unproductive gridlock.

Donald C. Fry is president and CEO of the Greater Baltimore Committee. He is a regular contributor to Center Maryland.    

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